The Nigerian Electricity Regulatory Commission (NERC), has said that the Nigerian Electricity Supply Industry (NESI), is still in its “infancy”, hence, close monitoring and supervision must be improved, to ensure compliance with the grid code, market rules, and other relevant industry standards.
The Commission disclosed this in the ‘Final Report On Operations and Technical Audit of Market and System Operations of TCN’ report on Tuesday.
This is as the labour unions on Monday, began a nationwide picketing of electricity distribution companies over an increase in electricity tariff.
The NERC announced the hike in the electricity tariff for Band A customers at a press briefing in Abuja on April 3, revealing that those affected would pay ₦225 per kilowatt-hour, up from the previous rate of ₦68/kWh. The hike represented a 240 per cent increase.
The tariff hike had caused a nationwide uproar, with NLC demanding a reversal.
Amidst the protests which saw operations of the DisCos disrupted nationwide, NERC said the current electricity supply is not economically driven.
“It is very difficult to call the arrangement we have today as an economically driven market, as it is not efficient, and prices are not determined on the dynamic behaviour of the network, competitive pricing and consideration of the other operating parameters like congestion,” the report stated.
It added that there was a need for developing the network planning documents, so that the expansion projects are selected and implemented based on engineering principles.
“The National Control Centre must be upgraded to serve as the nerve centre of NESI,” NERC added.
Although the country’s generation installed capacity is 12, 954 megawatts, according to NERC’s data, only 5,755MW is available to the grid.
The Commission said the installed capacity is not utilised due to: Transmission and distribution bottlenecks, frequency management coupled with DisCos low demand, and transmission lines congestion.
“The National Control Centre is not fit for purpose in a privatised electricity market. A comprehensive plan must be developed and implemented to equip the NCC control room with a functioning SCADA system, that will enable the operators to oversee the grid performance at all nodes in real-time,” the report added.
The NERC’s recommendations come to the fore, as labour unions said the nationwide picketing of utility firms, followed a joint directive from the leadership of both the NLC and the Trade Union Congress (TUC) at the weekend to their members, in protest of the tariff hike.
“We write to inform you of the picketing action scheduled to take place in the offices of the NERC and Electricity Distribution companies (DISCOS) in all states, including the FCT,” the unions said in a joint statement by NLC’s Ag General Secretary Chris Uyot and his TUC counterpart Anka Hassan
“The action will jointly take place on Monday, 13th of May, 2024 nationwide simultaneously. Therefore, the two Labour centres are directed to work together to carry out this important action. While counting on your usual cooperation, kindly accept the assurances of our goodwill and highest regards.”
Leading members of the labour unions in the protest at the headquarters of NERC in Abuja was the NLC President, Joe Ajaero, with the workers asking for an immediate reversal in the hike of the electricity tariff.
The chairman of the NLC, Saheed Olayinka, said the hike in tariff has been having negative effects on the populace, and asked the Federal Government to reverse it.
The picketing, he added, will continue until the demands for the reversal are met.
Although Nigeria currently has more than 26 power plants, they have not been able to generate more than 5000MW of electricity for the country’s over 200 million population.
Experts say the country needs at least 30, 000MW to reach sufficiency.
While the electricity generation companies blame low production on inadequate gas supply and debts by the DisCos, the utility firms on their part, say liquidity from lack of market reflective tariffs, and low transmission of power from the Transmission Company of Nigeria (TCN) causes low power supply to consumers.
Just last week, the NERC acting under the provisions of the Nigeria Electricity Act, ordered the establishment of an Independent System Operator (ISO) to take over the market and system operations functions of the TCN.
According to the order, TCN will retain its transmission service provider licence and continue to maintain power transmission infrastructure across the country.
It further stated that the Bureau of Public Enterprise (BPE) will incorporate the new company no later than 31st May, 2024 which would be called Nigerian Independent System Operator of Nigeria Limited (“NISO”).