FG Mulls Contractor-financing Model for Transmission Grid ExpansionFG Mulls Contractor-financing Model for Transmission Grid Expansion

• Power generation plunges to 2,662MW as fire guts TCN’s substation

Chineme Okafor in Abuja

The Federal Government has said it is considering a contractor-financing model for the expansion of Nigeria’s electricity transmission network currently operated by the Transmission Company of Nigeria (TCN).

Minister of Power, Works and Housing, Mr. Babatunde Fashola, who dropped this hint at a power dialogue organised by Nextier Advisory, said the government was currently deliberating on the option and decision was yet to be reached on it. “Again, it is not conclusive but we are considering contractor financing for the transmission network,” Fashola indicated.

“You hear us announcing that we commissioned one transmission project or the other, you see me going round for these commissioning; that is the grid evolving. “Today, at its most frugal, it would support 6,500MW. Pushed to its limit it would carry 7,200MW. So, it is not true when you hear that the grid capacity is not more than 5,000MW. It is growing every day and more projects are coming up. We have completed some and more are still coming up. So, that is where we are,” he added.

Fashola’s assertions were in line with a March 2016 proposal the Bureau of Public Enterprise (BPE) made to the government on how to manage the TCN ahead of the expiration of its management contract with Canadian firm, Manitoba.
The BPE had suggested that the TCN be concessioned to a private operator, who will be responsible for operating and investing in the network, with utmost responsibility for effective operation and recovery of investments.

It also proposed in the alternative that a private investor be handed over the network to operate, maintain and complete existing projects at the point of entry but that subsequent projects for system expansion should be batched and subjected to competitive bidding on a build-operate-maintain-transfe r basis.

The latter proposal would however lead to the Transmission Service Provider (TSP) arm of the TCN evolving to regional units under different operators.
In another development, reported increases in vandalism of gas pipelines and shortage of gas to power generation plants have resulted to national power generation dipping further to 2,662.20 megawatts (MW).

According to data from the System Operations Department of the TCN, the new generation profile was reported on Friday. Data from the sector’s statistics website also stated that up to 1.,371MW of electricity was constrained as a result of gas shortages.

The development also followed a reported fire incident that occurred at the Afam V Power Station last Wednesday, which led to the shut-in of about 450MW of guaranteed power supply from the Afam power plant.
The General Manager, Public Affairs of the TCN, Seun Olagunju, said yesterday in Abuja that the inferno completely destroyed TCN’s protection and control equipment in its relay and control room, thus constraining the evacuation of 450MW of electricity from the power plant.

Olagunju, however, stated that repairs had been effected on the substation and the plant reconnected, but did not disclose if the entire 450MW constrained power was now supplied back into the grid.
According to Olagunju, “The Transmission Company of Nigeria (TCN) wishes to inform the general public that a fire incident at the Afam V power station on Wednesday, 18th January, 2017, which completely destroyed TCN’s protection and control equipment in its relay and control room has constrained the evacuation of guaranteed 450MW generation by the station.

“The fire incident, which occurred at about 6:58am wholly destroyed TCNs equipment at the power station. However, the cause of the fire is yet to be ascertained.”
She disclosed that immediately after the fire was put off, an emergency team from TCN were mobilised to promptly isolate the faulty section of the substation and made alternative arrangement for evacuation of power generated by Afam VI generation into the grid.

“Presently, the job has been successfully completed and the power station reconnected to the national grid,” she added.
Olagunju, however, pointed out that major cause of the current low power generation was not particularly the fire incident but the vandalism of gas pipelines that resulted in short supply of gas to thermal power generating stations.