By Linus Aleke, Abuja
Federal Government (FG) on Tuesday, announced plans to unbundle the Transmission Company of Nigeria (TCN) into two entities – the Independent System Operator (ISO) and the Transmission Service Provider (TSP),
to enhance the desired efficiency in the transmission of power in the country.
It also tasked critical stakeholders in the electricity value chain to massively increase their investments in electricity provision across the federalisation, to increase the country’s GDP to a trillion dollars by 2030 as projected by President Bola Ahmed Tinubu.
Minister of Power, Chief Adebayo Adelabu, said this at the official opening of the ministerial retreat on the Integrated National Electricity Policy and Strategic Implementation Plan, (INEP-SIP), in Abuja.
Chief Adelabu said: “The Nigerian Electricity Supply Industry (NESI), transmission sub-sector has been identified as a critical weak point in the value chain lately, a view widely shared. To align with the Electricity Act 2023 and the industry’s demands, it’s time to restructure the Transmission Company of Nigeria (TCN) into two entities: the Independent System Operator (ISO) and the Transmission Service Provider (TSP)”.
This restructuring, Chief Adelabu, said, must synchronize with the evolving landscape of State Electricity Markets, addressing calls for the decentralization of the national grid into regional grids interconnected by a new higher voltage, national or super-grid.
Citizens, he said, must ask whether the government should directly provide electricity nationwide or rather facilitate its provision.
The Minister said that China’s centralized model and the US’s diverse access models—like rural cooperatives and State-based utilities with regulatory oversight—present various considerations.
This is as the Minister, revealed that a major issue in the sector is the pricing of gas utilized by GenCos in US Dollars, a hugely volatile variable that significantly affects the pricing of electricity to end-users.
He added that a more preferable option is to ensure that the gas utilized by the GenCos is traded in Niara to better manage the foreign currency-related inflationary trends that challenge the faithful application of the Multi-Year Tariff Order (MYTO) methodology.
“While we appreciate the interplay of contractual obligations, economics and the application of the Petroleum Industry Act, it must also be said that, as a matter of urgent national interest and economic survival, we must find ways and means to pursue domestic gas policies and incentivize stakeholders for the supply of gas for inland use in electricity supply, other industrial activities, and conversion to CNG and LPG for transportation and domestic uses respectively.
“Therefore, I would suggest that one of the major deliverables from this policy-making process is a viable method for establishing a sustainable capital investment programme around gas processing and transportation infrastructure with its associated fiscal incentives and policies that will attract/unlock investments into the production of Naira-denominated gas from inland gas basins, and in Non-Associated Gas fields from Nigeria’s various prolific hydrocarbon basins,” he concluded.
