NISO Warns Against Fragmentation as States Develop Electricity Markets 

By Joycelyn Ellakeche Adah

The Nigerian Independent System Operator (NISO) has warned that the decentralisation of Nigeria’s electricity sector could lead to fragmented infrastructure and poorly coordinated investments unless states and industry stakeholders work together.

NISO Managing Director/CEO, Engr. Abdu Bello Mohammed, said the expansion of state electricity markets under the Electricity Act 2023 should create new investment opportunities rather than undermine the coordination needed to improve power supply.

Mohammed spoke at the Africa Energy Leadership Summit 2026, holding at the Landmark Centre in Lagos, where he called for stronger collaboration in infrastructure planning, system operations and the management of industry data.

He said the emergence of state electricity markets, independent transmission infrastructure providers, decentralised generation and new distribution networks was changing the demands on Nigeria’s electricity system.

According to him, coordination would become increasingly important as state electricity networks connect to the national transmission grid, exchange electricity across state boundaries or rely on shared transmission infrastructure.

Mohammed said NISO was expanding its role beyond conventional grid operations to serve as a neutral technical integrator, system coordinator and market facilitator, helping different institutions and market participants operate efficiently within the wider electricity industry.

He, however, clarified that the expanded role did not make NISO a regulator of state electricity markets or diminish the statutory responsibilities of the Nigerian Electricity Regulatory Commission and state electricity regulatory authorities.

To prevent poorly coordinated investments, he said NISO was promoting Integrated Resource Planning to ensure that investments in power generation, transmission and distribution complemented one another, met technical requirements and aligned with the industry’s long term needs.

The NISO chief also identified digitalisation and access to reliable industry data as critical to improving transparency, coordination and investor confidence.

He disclosed that the system operator was pursuing a centralised data infrastructure for the Nigerian Electricity Supply Industry to consolidate, validate, manage and share critical information across the sector.

Mohammed urged state governments, regulators, investors, development partners and technology providers to collaborate in translating the opportunities created by the Electricity Act 2023 into improvements in electricity access, reliability and affordability.

He said the ultimate objective was to build an electricity industry that offered decentralised investment opportunities while maintaining coordinated infrastructure planning, efficient operations and a transparent market capable of attracting sustainable private investment.