The Electric Power Sector Reform Act (EPSRA) 2005 identifies the Transmission Service Provider (“TSP”) and System Operations (“SO”) activities as two separate regulated activities which may be performed by the successor company identified under Section 25(b) of EPSRA. Section 26(7) of the Act provides that –
“At any time following the declaration of a substantially privatised market under Section 24, the successor company identified in Section 25 (b) may transfer the function of system operation to an independent system operator on such terms and conditions as the Commission may direct and on such transfer, the independent System Operator shall be subject to the same powers and duties as have been imposed on the transferring successor company under this Act in relation to system operation.”
Pursuant to the provisions of Sections 32(2)(d), 65 and 66 of EPSRA, the Commission issued Transmission Service Provider (TSP) and System Operations (SO) licenses to the Transmission Company of Nigeria Plc. (TCN) as part of the transition of the electricity industry to comply with the licensing requirements of the Act and economic regulation. The role of the System Operator provided under Section 66(1) of the EPSRA are:
a) Generation scheduling, commitment & dispatch;
b) Transmission scheduling and generation outage coordination;
c) Transmission congestion management;
d) International transmission coordination;
e) Procurement and scheduling of ancillary services and system planning for long-term capacity;
f) Administration of the wholesale electricity market including the activity of administration of settlement payments, in accordance with the market rules; and
g) Such other activities as may be required for reliable and effective system operations
On the other hand, Section 65 of EPSRA on the Transmission Licence provides as follows –
(1) Subject to such terms and conditions as the Commission may fix in the licence, a transmission licence shall authorise the licensee to carry on grid construction, operation, and maintenance of transmission system within Nigeria, or that connect Nigeria with a neighbouring jurisdiction.
(2) The transmission licensee that is a successor company formed under section 8 may also have
an obligation to carry out system operation, including the procurement of ancillary services, pursuant to the terms of a system operation licence issued by the Commission to such licensee.
I’m not an engineer, but I often liken the System Operator to the air traffic control tower at any airport. Air Traffic Control (ATC) is a service provided by ground-based air traffic controllers who direct aircraft on the ground and through a given section of controlled airspace and can provide advisory services to aircraft in non-controlled airspace. The principal purpose of ATC worldwide is to prevent collisions, organize and expedite the flow of air traffic, and provide information and other support for pilots. In the same way, the System Operator is on the frontlines to ensure reliable delivery of electricity to consumers. Engineers with the System Operator manage the power grid from a set of computer consoles within the control centre, as they interact with field staff, substation personnel and other system operators. Like air traffic control, time is spent carefully monitoring the system conditions to anticipate and mitigate potentially dangerous and costly system problems.
Transmission on the other hand refers to the wheeling of electricity from the power plant to a substation through high-voltage power lines as electricity is better transported over longer distances at very high voltage.
It is therefore understandable why EPSRA separates the two closely related electrical engineering activities as they are indeed distinct. Transmission is simply about the transportation of electricity, while System Operations are about administratively managing the coordination, dispatch, and transportation of electricity. TCN is still wholly Federal Government owned, although, in 2020, NERC came up with a consultation paper that requested stakeholder input on unbundling the System Operator function.
