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Load Rejection: The Siemens deal may not tame this monster

Friday, 27 September 2019

Load Rejection: The Siemens deal may not tame this monster


Load rejection is the phenomenon whereby available electricity infrastructure is unable to deliver available generation to load points within the electricity network. There are many reasons this phenomenon occurs; it could be as a result of a fault in the network; it could be due to inadequate or dilapidated infrastructure; or it could be due to commercial reasons. Electricity infrastructure under these scenarios refers to both transmission and distribution infrastructure respectively. When transmission infrastructure is unable to effectively or adequately off-take and wheel power from generating companies (GenCos) to the distribution companies (DisCos), load rejection occurs, and some portions of available generation will be stranded as a result. Conversely, even when the transmission segment can off-take and wheel power from the GenCos to the DisCos and the DisCos lack adequate infrastructure to effectively and efficiently distribute power to load points within the network, load rejection still occurs, and some portions of available generation remains stranded. Commercial considerations are yet another set of sinister and ubiquitous reasons load rejection occurs. Commercial considerations may lead operators to direct power to areas they find easy to collect revenue and areas where the tariff is at a premium. Sadly, most commentaries on load rejection seem to focus on the technical aspect only; maybe because the commercial angle is difficult to establish, measure, or even to comprehend.

The Nigerian scenario is such that both the transmission and distribution segments within the Nigerian power delivery value chain are both inadequate to off-take, wheel, and distribute the available generation in the country efficiently and effectively. It is unimaginable that the very reasons for the privatization of the power are still with us six years after; in fact, it has gotten worse with distributed load averaging at 2,800MW, levels considered abysmal even during the pre-privatisation era. With both transmission and distribution technical incapacitated, there is a need to demarcate and measure the extent to which either the transmission or distribution segment contribute to load rejection. We are all witnesses to the constant bickering between the transmission and distribution companies regarding who is responsible for the lingering load rejection in the network.

The issue of load rejection has been with us for a while, even during the pre-privatisation era. It was under the auspices of the presidential task force on power that the very first stress test was carried out to determine the load-bearing capacity of both the transmission and distribution segments of the Nigerian electricity supply industry (NESI). The results of the exercise indicated that the distribution segment had a maximum load distribution capacity of about 4,400 MW, while the transmission segment could only achieve 5,200 MW, and the maximum generation capacity stood at close to 7,000MW. It was after the first Nigeria power sector stress test that it was determined, for the first time, that we have more generation than we could manage, completely reversing the narrative and reinforcing the load rejection reality in the NESI. We have grappled with this phenomenon since then and hoped that through privatization, we would be able to solve the problem finally. Therefore, there is an urgent need, at this time, to conduct another stress test to delineate the load bearing capacities of the DisCos and TCN.

It is worrisome that all efforts to resolve the load rejection phenomenon seem to be centered on the technical aspects of the problem without giving due consideration to the ubiquitous and intractable nature of the commercial angle to this issue. The recent push for Siemens to support in improving the transmission and distribution infrastructure will/may no solve this problem. The effectiveness of the Siemens initiative is a discussion for another day; there are more questions than answers. The big question in the load rejection debate is ‘where is the regulator in all these’ Does the regulator fully understand this phenomenon? An examination of the efforts of the regulator at resolving this problem reveals that there has been no attempt to recognize and address the commercial aspect of the load rejection phenomenon. While very little of the Siemens initiative has been made public, little snippets of available information reveal a total focus on the technical aspects of the phenomenon, which is infrastructure support. So, like the regulator and indeed all major stakeholders in the electricity industry, the lack of focus on the commercial angle to the multi-headed monster, means that all prospects of growing generation will remain slim. With all GenCos having about half their available generating capacity idle, it is impossible to conceive of any well-meaning prospective investor to invest in power generation in Nigeria.

About IWIN

The Independent Energy Watch Initiative (I-WIN), an enterprise of Energy ConServ and the Roundtable for the Growth and Development of Power (RODEP), is an online/web based power sector portal that strives to engage stakeholders and the Nigerian public on topical issues in the power sector.

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