Nigeria Decentralizes Power Supply with New Electricity Act

Nigeria's power sector is undergoing a significant transformation as the federal government and states collaborate to enhance power supply stability. Historically, the sector operated under a centralized model, with an installed capacity of over 14,000 megawatts (MW) but delivering only 4,000MW to 5,000MW due to various constraints.

The amendment of Section 14, Item 14 of the 1999 Constitution and the signing of the Electricity Act 2023 by President Bola Ahmed Tinubu have initiated this change, repealing the Electric Power Sector Reform Act (EPSRA) of 2005. This legislation empowers states to establish their own electricity markets and regulatory bodies, allowing for localized generation and distribution.

Over 16 states, including Lagos, Enugu, and Akwa Ibom, have already enacted state electricity laws and set up independent regulatory commissions. The Nigerian Electricity Regulatory Commission (NERC) will now coordinate inter-state power dynamics, while states can develop off-grid systems and independent transmission networks tailored to their needs.