Engr. Nafisatu Ali is the Executive Director, Independent System Operator, ISO, Transmission Company of Nigeria (TCN). In this interview, she speaks on energy sector reforms in Nigeria, opportunities and challenges

Can you provide an overview of the evolution and role of the Independent System Operator (ISO) in the electricity market and its implication for the Nigerian Electricity Supply Industry?

The journey of ISO began with the restructuring of electricity markets worldwide, particularly in the 1980s and 1990s. Initially, electricity systems were vertically integrated, with a single utility managing generation, transmission, and distribution. However, as deregulation and liberalization took hold, there was a move to unbundle these functions to promote competition, leading to the establishment of ISO.

The unbundling of the vertically integrated NEPA by the signing into law of the Electric Power Sector Reform Act (EPSR Act) 2005 led to the formation of the Power Holding Company of Nigeria (PHCN). 

By this act, NEPA was unbundled into 18 companies: Six Generation Companies, One Transmission Company and Eleven Distribution Companies. All were issued Operations Licences.

The SO licence was issued on  May 31, 2012. It has two major roles. 

System Operations and Market Operations, which makes an ISO.

The ISO is tasked with grid management, balancing supply and demand, and ensuring efficient market operations. Rule 9.1 of the market rules clearly states the role of both the system operator and Market operator to include planning, dispatch and operation of the Power System, and the implementation/operation of the Market in a manner designed to  guarantee an efficient, transparent and non-discriminatory market administration service to all participants.

Since then, the ISO has remarkably evolved within the TCN from those times when the grid operation is devoid of contractual obligations to what obtains now, where the market is driven by rules and contracts, with obligations to be met and penalties for default. Grid operations has also evolved from manual operation to semi-automatic operations and, very soon, full automated operations.

All along, the ISO has been leading the log in terms of application of industry documents in its operations.

What specific strategies is the ISO implementing to assist TCN achieve its vision of becoming one of the leading electricity transmission companies in the world?

Effective grid operation is fundamental to enhancing power transmission, ensuring that electricity is delivered reliably and efficiently from generation sources to end-users. The key strategies for effective and efficient grid operation being implemented by the ISO include, developing a highly skilled workforce through Human Capital Development. Use of technology in grid operations, such as Deployment of IoT and SCADA for Advanced Monitoring and Control of the Grid. Implement demand forecasting and automated demand response to balance supply and demand. Leading the drive for regional electricity market integration (WAPP).

Ensure real-time information sharing and stakeholder engagement to align targets.

Outage management, Contingency Planning and Emergency Response.

How do you view the current regulatory framework governing Nigeria’s energy sector, and what specific reforms do you believe are critical to enhancing TCN’s operations and the overall energy landscape?

The current regulatory framework in Nigeria’s energy sector, guided by the Nigerian Electricity Regulatory Commission (NERC), has made some progress but still faces significant challenges. The enactment of the Electricity Act 2023 and the incorporation of the ISO, is a major step forward, aiming to improve efficiency and reliability in the sector. However, further reforms are essential to enhance the operations of the Transmission Company of Nigeria (TCN) and the overall energy landscape.

Some of the reforms needed include, implementation of cost-reflective tariffs and provision of investment incentives to ensure financial viability and attract private investment.

Further liberalization of the market to encourage competition, and allow more private sector participation. A key reform is to have all regulatory agencies under one supervising ministry (eg NERC & NUPRC), possibly a ministry for Energy. This will go a long way in streamlining the application of regulatory orders or directives. It will also reduce bureaucratic bottlenecks in decision- making. 

The Nigerian grid is said to be majorly operated manually. How will the ISO leverage on modern technologies to improve the efficiency and reliability of the national grid? Are there any recent technological initiatives or upgrade that you would like to highlight including seamless synergies and real-time data sharing with Generating Companies (GENCOs) and Distribution Companies (DISCOs)?

I would prefer to say the grid is semi-automated. This is because a lot has been done in adopting modern technologies for the improvement of grid efficiency and reliability. These initiatives include, deployment of SCADA and IoT for improved grid visibility. Use of specially developed applications in grid operations (NSONG – GDT, DDT, Generation scheduling, among others.

Use of google forms for outage management (requests/reports) to NCC.

Generation Dip/Loss Detection System (GLDS) to detect and respond to sudden drops in power generation across its network.

Generation Loss Detection Use of social media platforms (e.g. WhatsApp) for information sharing.

Planned deployment of operational intelligence tool for system performance.

With the global shift towards renewable energy, what plans and strategies are being put in place by TCN-ISO to integrate renewable energy sources like solar and wind into the national grid? What challenges and opportunities do you foresee in this integration?

The SO is on top of this with system studies underway to establish how much of VRE the grid can effectively accommodate. 

A major challenge is the expected increase in the average weighted tariff that may come with solar integration, solar power is very expensive, currently Nigerian government is trying to remove all subsidy payments on electricity. Another challenge is zero inertia associated with VRE, especially when the fragility of our grid is put under consideration. 

The grid code will also need to be reviewed to ensure minimum standards required to the integration.

Opportunities, however, exist in off grid utilization, where its easy scalability provides an option for adoption more than any other form of power supply. 

What initiatives are in place to enhance the skills and capabilities of TCN staff? How does TCN ensure that its workforce remains competitive and well-equipped to handle the evolving demands of the energy sector?

The Transmission Company of Nigeria (TCN) recognizes the importance of continuously enhancing the skills and capabilities of its workforce to meet the evolving demands of the energy sector. Several initiatives are in place to ensure that TCN staff remain competitive and well-equipped among others.

Looking ahead, what do you see as the major challenges and opportunities for TCN and Nigeria’s energy sector over the next decade? How is TCN preparing to navigate these challenges and capitalize on potential opportunities?

Challenges are envisaged in the untested waters of having state regulatory Commissions and markets, with clear indications of lack of capacity and resources required to run an efficient electricity market across the states.

TCN can leverage its wealth of experience to diversify and become a solutions provider for those greenfield markets, especially in areas like regulations, SO, MO and equipment maintenance.