The Federal Government has announced the unbundling of the Transmission Company of Nigeria (TCN) and the establishment of a new company, the Nigerian Independent System Operator of Nigeria Limited (NISO), to oversee the national grid and related market contracts. This development follows a recent order by the Nigerian Electricity Regulatory Commission (NERC) directing the TCN to conclude the identification and mapping of its assets and liabilities within 30 days. According to the order, the TCN will transfer its market and system operation assets and liabilities to NISO, which will be responsible for managing the national grid and related contracts controlled from Osogbo.
Then, the company will be responsible for negotiating and entering into contracts for the procurement of ancillary services with independent power producers and successor generation licensees. The establishment is in line with the Electricity Act (EA) 2023, which stipulates the incorporation of a private company limited by shares to carry out market and system operation functions. The company’s object clause will be to hold and manage all assets and liabilities pertaining to market and system operation on behalf of market participants and consumer groups or such stakeholders as the Commission may specify.
New development to bring changes to the national grid.
This development marks a key change in the management of Nigeria’s power sector, as NISO will be responsible for ensuring the stability and efficiency of the national grid, as well as promoting competition and transparency in the market. The TCN will continue to operate as a Transmission Service Provider, but will no longer function as an Independent System Operator. The unbundling of TCN and the establishment of a new overseeing company is aimed at promoting efficiency and competitiveness in the power sector, and to address the challenges facing the sector.
Further, the new arrangement is expected to lead to improved management and operation of the national grid, and to enhance the overall performance of the power sector. Under the new arrangement, NISO will be responsible for the day-to-day operation of the national grid, including the management of transmission lines, substations, and other related infrastructure. The company will also be responsible for the procurement of ancillary services, such as spinning reserve, regulation, and voltage support, to ensure the stability and reliability of the grid.
There are plans to privatize the TCN by the govt.
Also, the company will be responsible for the management of the transmission network, including the scheduling of transmission outages, and the coordination of maintenance activities. The company will also be responsible for the administration of the transmission tariff, and the collection of transmission charges from market participants. The establishment of NISO is a milestone in the reform of the power sector, and is expected to lead to improved efficiency and competitiveness in the sector. The new arrangement is also expected to attract Private Sector investment, and to promote Economic Growth and development.
Meanwhile, the Federal Government has also announced plans to privatize the TCN, and to sell off its remaining stake in the company. This move is expected to further promote private sector participation in the power sector, and to enhance the overall performance of the sector. The establishment of NISO is a positive development for the power sector, and is expected to lead to improved management and operation of the national grid. The company’s responsibility for the procurement of ancillary services, and the management of the transmission network, will help to ensure the stability and reliability of the grid, and to promote competition and transparency in the market.
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It is also expected that the new arrangement will attract private sector investment, and to promote economic growth and development. The Federal Government’s plans to privatize the TCN and to sell off its remaining stake in the company are also expected to further promote private sector participation in the sector, and to enhance the overall performance of the sector. Overall, the unbundling of TCN and the establishment of NISO is a step forward in the reform of the power sector, and is expected to lead to improved efficiency and competitiveness in the sector.