I attempted @DrJoeAbah's recent 5 questions around “systems collapse” in his #NaijaKnowledgeX conversations. When I was done, I had a 3,000-word paper. Too long. It’s now down to 2,200 and if you find it boring, make you no vex. Just blame Dr. Abah. Here goes.
https://twitter.com/DrJoeAbah/status/1392750548219215873
2/ Questions: 1. Explain "system collapse". 2. Is the system about to die? 3. What causes the collapse? 4. Who is responsible? 5. How can it be avoided? @hdagyeng has very succinctly answered 1 and 3. I'll add a little and then try to answer Qs 2, 4 and 5. #NaijaKnowledgeX
3/ First, system collapse. All electricity supply systems function smoothly due to the balance between two factors – voltage and frequency. Voltage, measured in “volts”, is the pressure that pushes electrons along distance. These electrons travel as “alternating current” along
4/ cables they do so in waves that oscillate at a certain speed. This speed (or frequency) is measured in “Hertz” (Hz). Electricity is useless unless it can be delivered, via electricity markets, whether public or private sector owned and managed. So, efficient electricity
5/ markets are those that deliver electrons over a system of cables at a specific pressure (voltage) and speed (frequency). This system of cables is called an electricity grid. The farther the distance electrons must travel, the higher the voltage required to push them along the
6/ grid. Electricity markets comprise the generation, transmission and distribution sectors. The first produces for the latter two who deliver over long/short distances. In Nigerian, add a fourth, fuel supply, which means natural gas. #NaijaKnowledgeX
7/ The delicate process of moving these electrons at the required voltage and frequency from the generator to the ultimate user, via a transmission/distribution network, is known as “system operations”. A good SO will connect a generator to the transmission grid only if it
8/ produces electricity at a specific voltage and frequency. I’d say that: 1. The sole essence of an electricity grid, therefore, is to deliver electricity RELIABLY. 2. Reliability means constant generation, transmission and distribution at a standard voltage and frequency.
9/ 3. A reliable electricity system is one to which all who need electricity have constant universal access, whose total capacity exceeds measured demand and which has a certain adequate level of reserves to meet those inevitable emergencies that will arise over time.
10/ #NaijaKnowledgeX 4. Electricity reliability requires constant growth at a minimum rate that equals population growth. Nigeria has a single national electricity market and single SO, which exists as part of @TCN_ng. TCN has two licenses, one for transmission (construction and
11/ maintenance of the grid) and the other for the SO, whose huge mass of data and links you can see daily at nsong.org. Interesting thing about the SO is that because electrons are invisible it needs to have sole oversight of all entities that participate in the
12/ #NaijaKnowledgeX electricity market and so it alone would know which Genco put electrons into the grid/system/market and when and how much was actually delivered to, and picked up by, the proverbial “Disco”. Due to this oversight, only the SO can reliably and transparently
13/ tell all players in the market HOW MUCH they should expect to pay or receive on a given settlement day and for what quantity. So, beyond engineering we can agree that every electron put into/taken out of the market must be matched by a commensurate amount of money paid that
14/ ensures the electron continues to be produced in the required quantity and quality AND in addition gives a reasonable profit that enables the generator, the transmission entity, the distribution entity, the fuel supplier and, of course, the system operator, to continue in
15/ that market. Therefore, the SO is all about BALANCE. Engineering balance between voltage and frequency of electrons and commercial/financial balance between electrons and money; but you’ll find almost invariably that the root cause of engineering imbalance can be traced to
16/ 16/ #NaijaKnowledgeX commercial/financial imbalance, which in turn comes from low, uneconomic tariffs and/or poor revenue collection that creates revenue gaps and, ultimately, avoided or inadequate investment in network maintenance and growth). These outcomes are rooted in
17/ poor governance choices/decisions by policymakers, regulators and operators that breach the laws of economics and in turn take us back to engineering imbalances - poor generation, poor transmission, distribution outages and…system collapses. A system collapse could be
18/ partial (a brownout) or full (blackout), depending on the severity of the cause and/or the speed and skill of the remedial response by the SO. Collapses in modern grid systems/markets are a rarity because these systems have ready reserves and can be called upon in seconds to
19/ augment any drop in supply, voltage or frequency and cause a system collapse. Brownouts happen occasionally in all systems and can be managed by isolating the collapse, bringing in reserves and rerouting the energy around the cause/location of the brownout. Blackouts are much
20/ rarer and many operators never see them more than once, if at all, throughout a typical 3 or 4-decade career. I visited @pjminterconnect in 2014 and met a 43-year veteran who had seen only brownouts but had heard of a blackout in 1965. Visit PJM’s twitter feed and website and
21/ the difference from nsong.org is very clear. You’ll see how PJM uses ICTs to manage a 110,000-MW market that delivers daily available capacity just under 80,000MW and ensure that responses to its instructions are executed in seconds. I’ve added many words to
22/ @hdagyeng’s answers to Qs 1 and 3 because I saw an opportunity to provide insight into connected issues/questions that his answer raised. Question 2: is the system about to die. No, it will not because it is an engineering system of interconnected parts that are maintained
23/ #NaijaKnowledgeX and extended/grown in capacity. System collapses are major accidents that degrade resilience and reduce life span. Economically, this means more money spent than normal on maintenance/repair and even more money spent far earlier than normal on
24/ replacement, with much less capex available for grid expansion. I believe that Nigeria’s SO problem, which guarantees a good number of blackouts annually, lies in the fact that we continue to maintain a single national market, against all economic, commercial, demographic and
25/ engineering sense. Looking at Nigeria’s size, population, the unbalanced spread of fuel sources (and thus Gencos) around the country and the significant differences in demand and its various locations, it is obvious that a one-size-fit-all transmission grid cannot work with
26/ such a disparate mix of factors. This is a major reason why the public supply market delivers only 4GW of capacity and 70GWh of energy to the Discos daily, compared to the 35/40-GW alternative/back up fleet that actually powers Nigeria’s 200m people. So, the system will not
27/ die, at least not yet. It will continue to limp along and the alternative market will continue to grow steadily unless a correction occurs. Q.4: who is responsible (for things remaining the same, I presume)? Answer: policymakers who have refused to call a national dialogue to
28/ reset a framework first established 21 years ago via the National Electric Power Policy, 2001, never been reviewed since then and is clearly no longer fit for purpose. Policymakers tend to give a disingenuous response by pointing at the various PROGRAMMES that they regularly
29/ introduce to deal with one symptom of the problem or the other. You, Joe, know the difference very well. The failure to review and reset policy is exacerbated by various DFIs who pour money into these programmes without pausing to consider that programmes set on an untenable
30/ #NaijaKnowledgeX policy platform simply means enabling personal empire-building with precious public funds. What was valid in 2001 or 2005 (when EPSRA was passed) to reform the system or make it work better is, in a dynamic world, unlikely to remain so in 2021. There's also
31/ @NERCNG that is so focused on tackling daily market issues that it has not paid attention in a long time to its first regulatory function to “create, promote and preserve efficient industry and market structures”, S.32(1)(a), EPSRA, and so has forgotten to ask: “are this
32/ present market design and this present set of market players both fit for purpose”? Add in generators who will not invest in capacity expansion because they are perennial creditors compelled to accept a low proportion of bills payable from their only major buyer, @nbetnigeria
33/ with no visible hope of ever being paid anything close to 100% of the massive amounts owed or future bills. Further add Discos that are forced to accept less-than-cost-reflective tariffs and so also have no incentive to invest in network expansion. A fourth factor here is the
34/ “customer” - you, me, whoever is reading this now, residents who simply want to enjoy “light” that works. Most of us believe we have a right to electricity and blame the FGN for not providing it. We forget or are unaware of State Governments’ role in meeting the challenge.
35/ We mostly neither understand nor care much about the linkages previously noted in this thread. Yet we want "light", preferably at little or no cost and certainly not at today’s average cost-reflective tariff of approx. =N=80/kWh, which even your typical intellectual would say
36/ is too high. We, a nation of instinctive traders, refuse to accept the elemental truth that the desire (which some of us even regard as a right) to enjoy a manufactured product like electricity carries a corresponding duty to pay the economic cost of delivering that product.
37/ Even less do we realise that our collective dependency on self-generated electricity means that we pay approx. =N=130 to =N=150/kWh for self-generated electricity. We do not realise that our demand for the impossible (below-cost electricity that is reliable and
38/ universally-available) means that we end up losing out both ways – we don’t get enough of relatively “cheap” public supply from an infirm and inadequate national grid system and when we inevitably generate our own electricity it is at 2ce the cost of public supply. All these
39/ add up to a broken electricity sector (it can't be called a market) in which the commercial efficacy, credibility and trust amongst stakeholders that underpins ALL functioning markets has been eroded almost out of existence. Finally, Q.5: how can system collapses be avoided?
40/ #NaijaKnowledgeX The easy answer is: invest to expand fuel supply, generation, transmission and distribution and exceed known demand. However, as long as the market continues to normalise its myriad infirmities and contradictions, aggregating the billions of capex USD
41/ required for investment into our single national electricity market, year-on-year for decades to come, is unlikely to happen. This leaves us with the “hard way”, which is hard not because it is technically difficult or financially too costly but because getting there requires
42/ overcoming the tendency to remain fixed in the status quo. We need to rethink the electricity sector in order to make it into a market or, more accurately, a collection of viable markets. This means decentralising TCN and its grid maintenance and SO functions. Discos should
43/ work with States that desire it (and all States should desire it) to create individual State markets and focus on making these markets work for their residents. So, @TCN_Nigeria can create 4 – 6 autonomous power pools each covering a number of States and providing grid
44/ maintenance and SO services to States in that pool. Discos are incentivised to create subsidiary companies for each State, except Lagos that already has two, under regulatory frameworks developed by each State. Bringing about these changes to the transmission and distribution
#NaijaKnowledgeX sector is not in fact a radical departure technically or commercially. The real change is in recognising that the regulation of the distribution sector from and by Abuja alone is no longer tenable. TCN is already organised as a number of transmission regions and
46/ each transmission region has a control centre that can easily be upgraded into a SO. The established TCN SOP for recovering from a system collapse is actually to go into island-operating mode and restart the grid through the islanded regions working independently and
47/ interconnecting as more capacity comes back on line. It is not a big step to create corporate structures and balance sheets around 4-6 regions or groups of regions and give them the commercial autonomy to work with individual Discos and the Ministry of Finance Incorporated
48/ (which holds the FG equity in TCN) to raise project finance needed to strengthen their regional grids. These power pools would be more economically viable wholesale electricity markets and compel Discos in those regions to contract for new generation capacity. Distribution is
49/ a local affair, especially in large federal jurisdictions like Brazil, Chile, India, the United States and even China, whose sheer size and disparate socio-economic, geographic and demographic features make them extremely difficult, if not impossible to be operated and
50/ #NaijaKnowledgeX regulated as single electricity markets. Maybe it is now time for Nigerian States to take up their constitutional responsibility under Section 14 of the Concurrent List, 1999 Constitution, review where they are, what they need and how they could attain it and
51/ make laws that create the kind of electricity markets that they desire. This is precisely what Lagos State is now doing, a State blessed with the 5th largest GDP in Africa but using less than 1000MW of publicly available capacity but, paradoxically, over 15,000MW of back-up
52/ power. @followlasg has initiated the policy- and law-making process that will ultimately lead to the creation of a Lagos electricity market, with the unimaginable promise this development surely holds. If States and the FG find a collaborative way to reset transmission and
53/53 distribution, and no reason why not, the massive physical damage and economic losses caused by system collapses will massively diminish and the massive investment opportunities in electricity in Nigeria will multiply and become much more apparent.
Joe, there you are. 5 questions, probably too many words in answer...but I enjoyed having to think and put down my thoughts #NaijaKnowledgeX
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