June 8, 2021

National grid collapses thrice in 5 months, 130 times in 8 yrs — Investigation

There are indications that the power sector may have experienced three system collapses in five months (between January and May, 2021), against two recorded in the corresponding period of 2020.

Outages/grid collapses occur when there are system disturbances along the transmission grid. Such disturbances could include a massive drop of load from a sub-station that would cause the grid to become unstable.

Accordingly, the grid collapses recorded within the period occurred on February 17, March 15 and May 12, 2021. This is against the corresponding year’s system collapses which occurred on January 16 and April 29, 2020 respectively.

However, investigation carried out by Energy Vanguard, indicated that the country may not have seen the end to power sector system collapses as many problems, including aging transmission network, obsolete substation equipment persist.

130 system collapses in eight years and counting

Energy Vanguard also gathered that the country’s power sector (from 2013 when the electricity privatisation process was completed) has witnessed about 130 grid collapses; a challenge which experts and operators said would linger for a long time.

However, a breakdown of the development shows that the sector recorded a total of 45 partial grid collapses and 82 total collapses between 2013 and 2020.

The nation witnessed the highest system collapse in 2016 and the least in 2020.

However, three cases of system failure have taken place between February and May, 2021.

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The above development shows that an average of 9 grid failures occurred in Nigeria, annually.

However, following the May 12, 2021 incidence, TCN had revealed that it is waiting for the National Electricity Regulatory Commission, NERC, to approve the 260megawatts, MW, spinning reserve it recently procured, being part of 400MW reserve needed to contain the grid’s frequent failures.

Experts envisage more collapses, except….

Commenting on the development, Professor Wumi Iledare, Ghana National Petroleum Corporation, GNPC, Professor and Chair in Petroleum Economics and Management, Institute for Oil and Gas Studies, Cape Coast, Ghana, said adequate measures have not been put in place to prevent collapses in the country’s power sector.

According to him: “I don’t see what Nigeria is doing to prevent system collapse. The sector is too overtly centralised.

“The major issue affecting the transmission network is the ineffective governance and regulatory framework of the National Electricity Regulatory Commission (NERC). Second issue is lack of understanding of the basic electricity market structure.

“The allocated captive market to Transmission Company of Nigeria, TCN and Distribution Company of Nigeria, DISCOs are too big to manage effectively.

“Finally, the over-centralisation, the transmission network, with a one keep all, for a heterogeneous market such as Nigeria, makes the system operationally ineffective, economically inefficient and inequitable to the society.

“The way out is decentralisation of the market control and regulation. Secondly regionalism of the market with a more homogeneous market elements. Finally invest in energy infrastructure for better energy planning.”

He lamented that the power sector if flooded with “Epileptic power supply, transmission losses, vandalism of pipelines, DISCOs inefficiency will limit the potential for economic growth.

“Energy consumption grows an economy faster than energy production, especially, if the latter is mostly for export. Governance and pricing framework is key along the value chain.

“Another challenge is the market structure and conduct. The electric power sector with respect to power generation is more of oligopolistic in structure but the distribution is more of hybrid market structure tending towards a captive monopoly.

“Unfortunately, there seems to be a lack of understanding of this structure in terms of performance. Here lies then the issue that needs to be resolved! The power of Nigeria Electricity Regulatory Commission (NERC) is frequently undermined by economic populism of the National Assembly.”

He noted that it will be a positive development for NERC to be operating under the Ministry of Science and Technology instead of the Presidency.

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Also, a source from PriceWaterHouseCoopers (PwC), noted that the issue around system collapse has to do with TCN’s lack of wheeling capacity, and there is need to expand transmission lines, procure more spinning reserves for generating power stations and refusal to fast-track construction of digital control centers

He said, “At this period TCN should have minimal GENCO capacity required to always deploy available electricity at short notice when other system collapses. The system would serve as a protection schemes for critical transmission-distribution interfaces.

“There is need for available capacity that can be deployed anytime hiccup occurs within the transmission system.

“In actual fact, collapses will occur but how you deal with it is what is of utmost importance. TCN often doesn’t have sufficient funds to procure this equipment or pay GENCOs that could also have this spinning reserve as a backup in case of collapse.

“Most government policy statements and initiatives are always not well thought out, and even when initiated they are often implemented haphazardly.

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“One of such cases is the structure of the energy market, power deal with Siemens Energy Nigeria to deliver 25,000MW by the end of 2025 and to fix the archaic transmission and distribution infrastructure in the sector.”

This project signed in July 2019, by Presidential Power Initiative with the German firm, is being truncated with policy flip-flops.

The PwC Power Partner, however, recommended that for Nigeria to avoid another power collapse, the TCN must develop a sustainable remediation plan. This must follow a process and not the usual fire brigade approach.

He also urged the Federal Government to collaborate with the Discos and GENCOs when formulating policies that would help improve performance in the sector.

Nigeria needs 400 MW of spinning reserve to be stable —GENCOs

In a report – Assessing the Challenges in Operating a GENCO, Given Current Market Consideration – obtained by Energy Vanguard, the GENCOs noted that the actual reasons which trigger the incessant grid collapse are unknown and can only be established if a thorough technical investigation is conducted and made public to ascertain if it was human error, negligence or other factors.

According to the report, “Undoubtedly, the transmission network constitutes the vital channels of the entire power value chain.

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“It goes without saying that the ‘growth of the power sector is contingent to development of a robust and a non-collapsible transmission network’.”

“The current transmission network is characterised by factors such as aging network, obsolete substation equipment, overloading of certain transmission corridors, poor operations and maintenance etc. which clearly portends a network plagued with huge infrastructural challenges.”

“Such disturbances could include a massive drop of load from a sub-station that would cause the grid to become unstable.

“This could be solved in most cases with adequate spinning reserve in place. Experts have advised that the Nigerian grid requires up to 400 MW of spinning reserve to be stable.

“The reality is, there is no spinning reserve procured currently in the market notwithstanding TCN’s constant reminders to the regulator (NERC) to procure about 260MW which though below the estimated figure, could be a starting point.

“One of the main causes of grid instability is frequency roaming engendered by either load rejection or uninstructed generation/overload.

“While the solution is compulsory for all Gencos, i.e. operating on “Free Governor Mode (FGM) in accordance with the cation” to enable effective control of the frequency accordingly, the second Stage solution is calling up of “Spinning Reserve” from the incentivized providers.”

Regulatory lacuna

The report further fingers the regulatory arm of the power sector on negligence to its duty, saying “The non-responsiveness of the regulator to this critical issue is worth exploring by Nigerians given the technical, commercial and economic effects of the frequent grid collapses in a regulated market such as the Nigerian Electricity Supply Industry (NESI).

“Most of these service interruptions and high frequency allegations are attributed by TCN to the inability of DISCOs to take load in that they cause system imbalance which hurt power generators/producers to a grave extent, by depriving them of the ability to sell the output of their plants.

“From Gencos point of view, investing to increase the capacity of their power plants in the Nigerian Electricity Market (NEM), translates to more risks in terms of machine breakdown, maintenance and repair costs.”

Vanguard News Nigeria