NERC to curb international bilateral contractual breaches
• Power supply pegged at 6% to neighbouring countries
The Nigeria Electricity Regulatory Commission (NERC) has said it is renewing efforts aimed at eliminating contractual breaches within the electricity industry especially in the international and bilateral contracts.
The Commission, which said it observed exploitation and practices that are not healthy within the contracts execution, has therefore directed the System Operator (SO) to cap power supply to cross-border customers in Benin Republic, Niger Republic and Togo. Nigeria currently supplies electricity to these neighbouring countries.
The directive is contained in a document on the Commission’s website, entitled: “Interim Order on Transmission System Dispatch Operations, Cross-border Supply, and Related Matters.” It will be in effect for an initial six months and subject to review afterwards. The order, dated April 29, 2024, which took effect from May 1, 2024, was jointly signed by the commission’s Chairman, Sanusi Garba, and Vice Chairman, Musiliu Oseni.
As part of measures to curtail any exploitation, the NERC order stipulates that power delivery to Nigeria’s neighbours must not exceed six per cent of the total grid electricity at any given time. The electricity sector regulator expressed concern about sub-optimal grid dispatch practices, which have impacted the ability of Distribution Companies (Discos) to meet their Service Tariff commitments to end-user customers.
“The reliance on limiting Discos’ load off-take while prioritising international off-takers and Eligible Customers has proven neither efficient nor equitable,” the statement said.
NERC emphasised that the current international and bilateral contracts with Generation Companies (Gencos) often fall short of industry standards. It stated that many off-takers contracted bilaterally by Gencos exploit this prioritisation, exceeding their contracted levels during peak operations without penalties.
As an interim measure, NERC aims to guide the system operator and the Transmission Company of Nigeria (TCN) in implementing Standard Operating Procedures to enhance transparency and fairness in grid operations.
According to the NERC document, the order also mandates the system operator to place interim caps on capacities supplied to international customers for the next six months, minimising the impact on domestic supply obligations by Gencos.
The document stated that the system operator must develop and present a pro-rata load-shedding scheme to ensure equitable load allocation to all off-takers (Discos, international customers, and eligible customers) during generation drops or grid imbalances. It added that bilateral transactions between generators and off-takers require express approval from the Commission.
“The system operator will log and publish hourly readings, enforcing penalties for violations of grid instructions and contracted nominations. Maximum load allocation to international off-takers in each trading hour shall not exceed six per cent of the total available grid generation.
“The system operator and TCN must install integrated Internet of Things meters at off-take and delivery points to provide real-time visibility of aggregate offtake by grid customers,” NERC said.
The Order further stated the following: “ The system operator shall develop and present to the Commission for approval within seven days from the issuance of this order a pro-rata load-shedding scheme that ensures equitable adjustment to load allocation to all off-takers — Discos, international customers, and eligible customers — in the event of a drop in generation and other under-frequency related grid imbalances necessitating critical grid management.
“The system operator shall implement a framework to log and publish hourly readings and enforce necessary sanctions for violation of grid instructions and contracted nominations by off-takers in line with the grid code and market.
“The aggregate capacity that can be nominated by a generating plant to service international off-takers shall not be more than 10 per cent of its available generation capacity unless in exceptional circumstances a derogation is granted by the commission.
“The system operator shall henceforth cease to recognise any capacity addition in bilateral transactions between a generator and an off-taker without the express approval of the commission,” it added.
NERC also ordered that “the system operator and TCN should immediately initiate and install integrated Internet of Things (IoT) meters at all off-take and delivery points of eligible customers, bilateral supplies, cross-border trades, and outgoing 33kV feeders of the Discos to provide real-time visibility of aggregate offtake by grid customers.
“The installation of and streaming of data from the IOT meters should be completed within three months from the date of this order,” the Order concluded.
- The Nation
