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Power market players say responsive ISO could be sector’s game-changer

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Powerline Source: Construction Review Online


A responsive and financially-stable Independent System Operator (ISO) in the power sector will ensure a fair, transparent and stable electricity market, analysts have said.

This is just as the federal government is deliberating on the unbundling and partial concession of the Transmission Company of Nigeria (TCN) into Transmission Service Provider (TSP) and the Independent System Operation (ISO) to boost its efficiency.

Director, Energy, Bureau of Public Enterprises (BPE), Yunana Malo, during the March edition of ‘the Electricity Hub’ conversation series on power, stated that there was a need for the ISO to have a responsive corporate governance culture.

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He hinted that the Federal Government had taken a step to ensure that strong hands are in place for the progress of the system, adding that the ISO was planned to run like a mini-regulator.

“They may have to be like the police of the sector because the idea is to have a situation where the merit order encourages lower cost of power generation. If you have a dispatch that is based on merit, it means that everybody will be encouraged to begin to lower the cost of generation and ultimately the cost of power that will go to consumers.

“That is why we need to have ISO so that a competitive environment can be created where those who generate power will begin to think of how to generate low-cost power.

He added that by the design of the reform of the sector, the transmission company would remain government-owned and that ISO would be responsible to the government and the TSP would also be government-owned.

“But we will bring in those who have the technical know-how and the deep pocket to undertake long-term projects within the transmission segment that will give us enough capacity to sort issues in the south requiring stronger power that is higher than other places.”

Energy Specialist, African Development Bank, Chigoziri Egeruoh, stated that to get the economic benefits of the sector’s reform, there was a need to get the technical basics right.

“What we need is a very transparent and independent ISO and we need every decision to be based on the policies of the government.”

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We want them to have their own money so that they do not go about begging. We also want them to start at a minimal level where they will not be looking for money that will make them start asking the market participants. We want them to have a process that self regulates them; there have to be incentives given to them in such a way that any mistake that happens in the sector will club back their money in the tariff.”

In his remarks, Power Systems Operations Specialist, Manitoba, Mr. Harold Wiens, urged the government to get a handle on its Available Transmission Capability (ATC) as opposed to the market deals being made.

He stated that one of the problems in the country is the high transmission voltage lines going to the north with little load, saying though the lines will be needed in the future.

On the planned unbundling, he stated that the government has to give the ISO the authority to run the system in real-time and respect the planning of the ISO.

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