Nigeria’s Electricity Commission to unbundle TCN into two firms for greater efficiency

electricity linkage to 250MW by 2021

NIGERIA – The Nigerian Electricity Regulatory Commission (NERC) has revealed that it is committed to the the unbundling of the Transmission Company of Nigeria into two entities so has to achieve greater efficiency in the electricity sector.

In the document, titled, “Towards greater independence for the electricity System Operator,” NERC explained that the move to unbundle TCN was in line with the Electric Power Sector Reform Act which provided for the licensing of the successor transmission company.

Since inception the transmission company has been charged with the responsibility for building and maintaining the physical national transmission network and the system operations function.

After the power sector was privatised in 2013 and the successor generation and distribution companies handed over to private investors, the TCN mandate left unchanged and it was left under ownership and management of the Federal Government.

The Nigerian Electricity Commission however notes that it was envisioned in the Electric Power Sector Reform Act that a time would come when the mandate of TCN would be uncoupled and the system operation function be transferred to an Independent System Operator.

The Nigerian Electricity Commission however notes that there had been a gradual transition to a contract-based electricity market where participants were expected to be held accountable for their obligations under the industry contracts.

NERC further noted that based on the recent tariff orders issued by the commission and performance standards contained therein, it was therefore imperative to consider granting greater independence for the system’s operator.

The Nigerian Electricity Commission said it has already invited stakeholder inputs to inform the commission on the readiness of the electricity industry for the unbundling of the SO function to an independent system operator.

The NERC noted that this would be done by taking into consideration the stage of market development and the key technical prerequisites for an efficient ISO.

The commission requested stakeholders to recommend the degree of independence that could be granted to the system’s operator without causing disruptions in market stability.

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