Addressing The Confusion In The Nigerian Electricity Supply Industry (NESI)

By idowu oyebanjo

 There is no doubt that the challenges facing the electricity industry is huge even as all but the Transmission Network have become private concerns. There are fundamental changes now taking place which will define the general outlook of the Nigerian Power System in the future as the power grid becomes unbundled and privatised such that the traditionally integrated and centrally dispatched energy system becomes a largely distributed and more complex architecture.

It is fair to say that today's technical and regulatory governance framework is grossly inadequate to manage the seamless integration of the different stakeholders and functions within NESI which are largely under differing ownerships. This has the potential to lead to disaster and chaos in the future if not addressed now. One of the first things required to be done is to establish an independent expert group to ensure an holistic approach to the phased development of NESI as it is becoming more than obvious to the blind that a "whole System" approach is what is needed to address the challenges facing the industry.

The recommended steering group to address the mechanisms for whole-system integration should be made up of a panel of technical experts from the Transmission and Distribution Network companies, consultants, academia, NERC, BPE, NBET, IPPs, Nigerian Gas Company, NNPC, NEMSA, MAN, data and ICT companies, the Nigerian Electricity Consumers' forum, SON and so on who have practical experience of electricity supply business. The aim of the expert group is to assist in the building of an integrated perspective for the planning and operation of the future electricity network, ensuring not only technical performance but also the opportunities for jobs and exports (technical and materials), identifying issues, defining the questions to be answered, clarifying the parties accountable, obtaining synergies and highlighting areas of relevance to national policy-making.

For most complex systems (which electrical power system is one), there is often a gap between those who specify what the whole system is required to achieve and the plethora of contractors, design authorities, operators, and other technical specialists who provide the hardware, software and other technical skills to construct and run the many sub-systems that together form the whole. It must be mentioned heretofore that neither the transition electricity market nor the free electricity market alone will be able to shape the structure, supply chain and system architecture for the provision of goods and services within the NESI. Hence, it has to be stated that this expert group will provide the co-ordination and the glue between established parties and new entrants, including generators, network users and operators, to facilitate the technical operation and the market mechanisms in a multi-party complex system like the NESI.

The new architecture required to meet the challenges of the NESI would need to develop a "Power System Framework" to address whole-system issues plaguing the NESI and this can only be provided by what we will term a "System Architect". The system architect gives a purposeful direction in the immediate and future development of the power network infrastructure based on defined codes, standards, and processes that enable seamless movement of information and operational instructions. The system architect thus takes responsibility for the correct functioning of the architecture of the whole system.

The pertinent question therefore is "Who or what is the System Architect?"

*NERC Chair, Sam Amadi 

The system architect is a separately defined entity that would take a whole-system and long-term responsibility for developing and agreeing the framework of architectures, standards, protocols, and guidelines needed to ensure seamless technical integration of the sub-systems of the industry players and parties, enabling a seamless response to the challenges arising from policy imperatives as they emerge over the coming decades. This single entity will be responsible for the management of the complexity of the evolving power system architecture in the public interest on behalf of government. Solutions for system integration challenges should be developed in consultation with key industry stakeholders while considering whole-system cost-benefit across the supply chain. The system architect would also have advisory role in providing assurance that the whole system can meet the policy-driven technical challenges of the next two decades. The role would involve developing functional specifications, policies, interfaces and best practices, overseeing system integration, interpretation of the direction of established policies by government to enable the organisations responsible for implementation and operation to do so in a coherent manner. Acting as a risk manager, the system architect will provide early warning of emerging risks to system stability and advise on the feasibility and timescales for the implementation of policies. To this end, the system architect is limited in function to technical matters that will make the Nigerian Power System function effectively to meet government's policy objectives while accommodating the requirements of the markets. Of course there will be times when effective technical integration requires attention to commercial and regulatory frameworks, and in such times, the system architect would be expected to identify these and work with government and other parties to resolve them.

The system architect in general will operate as an integration model that combines the existing segmented functions into a single function with the overall responsibility and ultimate accountability to the Minister of Power. For example, the architect can extend the scope of two key existing entities- the Grid code and Distribution code panels whose scope at the minute is limited to operational and technical matters rather than the integration of technical, operational and commercial aspects across the whole system. To succeed, the panels must be constituted to address structural and technical constraints jeopardising the successful development of the NESI with a clear focus spanning the whole system - generation, transmission, distribution, consumer, and related information flows.

NERC too should ensure the integrity of the underlying systems engineering while keeping its focus on commercial and economic levels. The activities of the Association of Nigerian Electricity Distributors (ANED) and Nigerian Electricity Consumers Advocacy Network (NECAN) forum need to be strengthened to realise the objectives of the power system. It is believed that the integration and management of data and ICT will present further challenges despite the goodwill or commitment of stakeholders and expertise of individuals involved if there is no adequate legal personality or party that will be accountable for ensuring the functionality of the increasingly complex system. Overall, there is a highly fragmented institutional landscape today that maintains and develop the codes which govern the operation of different aspects of the system, but none of which takes a whole-system view. This needs to be addressed urgently.