TRANSMISSION COMPANY OF NIGERIA(TCN)

....WHEELING POWER FOR NATIONAL DEVELOPMENT

Providing Adequate and Reliable Transmission Infrastructure in a Private Sector-Led

Power Industry

Mack Kast

MD/CEO, TCN

6th Power Summit/ CSO’s Forum

January 30, 2014

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TRANSMISSION COMPANY OF NIGERIA

• Motivation for TCN is to provide adequate and reliable transmission infrastructure in a Private Sector-Led Power Industry – Ought not be distracted by public vs private

– End Vision is the same • Boost the Economy of the Nation

• Improve the Standard of Living

• Stimulate Growth in the Commercial and Industrial Sectors

• Expand the Tax Base

• Improve the Infrastructure – Hospitals and Healthcare

– Education

– Transportation

– Communication

– Security

TRANSMISSION COMPANY OF NIGERIA

• Our Role

– To provide a reliable source of competitively priced electricity

– This is the engine that will drive our economy

– Our task is to make that happen without fail

– And perform beyond expectations

TRANSMISSION COMPANY OF NIGERIA

• What We Do – Transmission is the critical link between supply and load

– Generation is self-contained

– Distribution is somewhat self-contained

– In contrast:

• Transmission spans the country nationwide

• Connects north-south/east-west

• Have 5,550 km of 330 kV lines (10,400 spans)

• Have 7,000 km of 132 kV lines (19,700 spans)

• Have 28 - 330/132 kV sub-stations

• Have 122 – 132/33 kV sub-stations at distribution points

• Have 1,900 circuit breakers

• Have approximately 7,000 MW of evacuation capacity

• Funding requirements are intensive ( > $1.0 b/year)

• Incubation to commissioning timeline can be long

TRANSMISSION COMPANY OF NIGERIA

• Our Organization

– TCN is the Umbrella Corporation

– Within which, we have three Business Units

• Transmission System Provider (TSP)

• System Operator (SO)

• Market Operator (MO)

– The Business Units:

• Are Ring-Fenced

• Unbundling, at date TBD

TRANSMISSION COMPANY OF NIGERIA

• Why Three Business Units

– To implement a World Class Power Structure

– SO has two primary responsibilities (Reliability) • Merit order dispatch of supply to serve load on a real-time basis

• To prepare and update high level Master Plan for load/supply

– MO has prime responsibility to ensure competitive pricing from real-time supply points (Financial)

– TSP has responsibility to build and maintain transmission facilities to ensure reliable evacuation of power, including new generation interconnections (System)

TRANSMISSION COMPANY OF NIGERIA

• Operating in a Private Sector-led Industry

– On Generation side, private investors are demanding • Take-or-pay guarantees for evacuation

• Advance commitment to build connection facilities prior to completion of construction of power station

– On Distribution side, private investors are expecting • Reliable supply of power at connection points

• Reduced operating costs

• Ability to defer payment of invoices

TRANSMISSION COMPANY OF NIGERIA

• Short term reverberations for TCN as a result of privatization of Genco’s and Disco’s:

– Responsibility to give effect to Grid Code and Market Rules

– Labour settlement issues

– Legacy debt issues

– Expectation of load allocation

– Reduced cash flow

– Declining supply issues

TRANSMISSION COMPANY OF NIGERIA DAILY PEAK DEMAND

4517.6

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3500

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TRANSMISSION COMPANY OF NIGERIA

• Challenges Ahead

– Theft of electricity

– Vandalism

– Aging infrastructure

– Trace clearance

– Erosion

– Lack of spinning reserves

– Lack of black start capacity

– Giving effect to TEM

• Workforce training

• Application of technology

• Looping critical corridors

• Secure gas supply

• SCADA and Telemetry

• Funding for Infrastructure upgrades and future expansion

TRANSMISSION COMPANY OF NIGERIA

TRANSMISSION COMPANY OF NIGERIA

• The Future is Bright

– The private and public sectors are aligned to succeed

– From customers’ perspective, we are but one

– The unbundling of the Power Sector has created manageable entities

– Foreign investment is improving

– The Federal Government is fully committed to the delivery of a reliable source of power to build the future of the nation

– It is win/win

TRANSMISSION COMPANY OF NIGERIA

Thank you.