The Connection Between Generated Power and Electricity Consumers

The worsening state of the power sector in Nigeria has led to electricity customers in the country enduring five grid collapses this year. The country’s peak generation capacity has been hovering around 3,000 MW, drastically inadequate to meet the demand. However, if the generation capacity improves, what assurances are there that the Transmission Company of Nigeria (TCN) can be the connection between generated power and electricity consumers.

Recently, the Generation Companies (GenCos) pushed against the activation of a Power Purchase Agreement (PPA) by the Nigeria Electricity Regulatory Commission (NERC). The PPA required the minimum generation capacity to be 5,000 MW. The GenCos gave reasons why this would not be possible, including gas supply challenges and existing debt owed to them.

The GenCos stated that for a minimum of 5,000 MW generation capacity to be achievable, gas supply must first be guaranteed. Also, the generation companies mentioned payment shortfalls to them as another factor inhibiting the success of the PPA. For example, in 2019, data from NERC showed that the market shortfall was ₦496.65 billion. While GenCos invoiced ₦675 billion to the Nigeria Bulk Electricity Trading Plc (NBET), only ₦174.3 billion was paid.

However, if the GenCos do begin to produce 5,000 MW, what challenges would hinder the connection between generated power and electricity consumers?

The TCN’s responsibilities include developing a transmission grid to evacuate all generated power among its many activities. However, even with the current generation capacity, the TCN responsible for channelling electricity to Distribution Companies (DisCos) faces many challenges. These challenges include inadequate infrastructure, the vandalisation of available infrastructure, and the lack of operation management and data sharing systems.

The lack of adequate infrastructure and the vandalisation of existing infrastructure is the most pressing of the TCN’s problems. A major factor in unelectrified areas in the country is the lack of infrastructure such as transmission lines. And often, when transmission infrastructure is vandalised, the TCN cannot apprehend the criminals due to a lack of surveillance technology. This vandalism disrupts the electricity supply to consumers.

The lack of investment in transmission infrastructure interrupts the connection between generated power and electricity consumers. In April, the Federal Executive Council (FEC) approved ₦1.4 billion to support the development and purchase of TCN infrastructure and equipment to improve power supply to customers. According to the Minister of Power, the funding will help the TCN build KV lines in substations and provide handling equipment and operational vehicles.

It is important that while efforts are being made to increase the country’s generation capacity, investments should be put towards improving the transmission link. Proper investment in the TCN, among other benefits, would prevent electricity wastage and strengthen the connection chain between power generated and electricity consumers.