Nigeria’s electricity market decentralisation could create new investment opportunities across generation, transmission and distribution, but poorly coordinated infrastructure development risks undermining the gains, the Nigerian Independent System Operator (NISO) has said.
Abdu Bello Mohammed, managing director and chief executive officer of NISO, said stronger coordination among industry stakeholders is needed as more states establish independent electricity markets and regulatory institutions under the Electricity Act 2023.
Mohammed said the emergence of multiple electricity markets, independent transmission infrastructure providers and decentralised generation and distribution networks was increasing the need for coordinated system planning and operations.
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“Our vision is a Nigerian electricity industry that is decentralized in its development opportunities, integrated in its infrastructure planning, coordinated in its operations, transparent in its market administration and attractive to sustainable private investment,” he said in Lagos Wednesday.
He warned that investments made without adequate coordination could create incompatible infrastructure, weaken operational efficiency and limit the benefits of opening up the electricity market to state-level participation.
The Electricity Act 2023 provides a framework for states to establish and regulate intrastate electricity markets, creating opportunities for new investments but also increasing the need to coordinate electricity networks that remain interconnected.
According to him, NISO was expanding its role as a neutral technical coordinator and market facilitator to help different market participants operate efficiently within the wider electricity system.
He clarified that this role did not make NISO the regulator of state electricity markets or diminish the statutory responsibilities of the Nigerian Electricity Regulatory Commission and state electricity regulatory authorities.
He said coordination was particularly important where state electricity networks connect to the national transmission grid, exchange power across state boundaries or rely on shared transmission infrastructure.
To address the risks, NISO is advancing integrated resource planning to ensure that investments in generation, transmission and distribution complement one another, meet technical requirements and align with the industry’s long-term development needs.
Mohammed also identified access to reliable industry data and digitalisation as critical to improving transparency, coordination and investor confidence.
He disclosed that NISO was pursuing a centralised electricity industry data infrastructure to consolidate, validate, manage and share critical information across the Nigerian Electricity Supply Industry.
The initiative is expected to improve access to information needed by investors and other market participants to make decisions on infrastructure development and electricity market operations.
He urged state governments, regulators, investors, development partners and technology providers to work with NISO to translate the opportunities created by the Electricity Act into improvements in electricity access, reliability, affordability and economic development.
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Feyishola Jaiyesimi is a writer and storyteller. She currently writes for the energy desk at BusinessDay with a focus on renewable energy and environmental issues. She began her journalism career as an agricultural reporter and now covers the energy sector, including oil, gas, electricity, environment, and renewables. She has been selected for professional training by the US Consulate, Lagos. She is a 2025 Dataphyte Biodiversity Reporting Fellow. Feyishola holds a bachelor’s degree in Zoology and Environmental Biology from Ekiti State University.
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