FG warns states against unilateral electricity market development

The Minister of Power, Adebayo Adelabu, on Tuesday, warned state governments against taking unilateral decisions in the development of subnational electricity markets, saying engaging in such would not only destabilise the national grid but also erode investors’ confidence.

Adelabu gave the warning when he met with the state Commissioners of Energy, apparently as a result of recent decision taken by the Enugu Electric Regulatory Commission (EERC) which announced reduction in electricity tariffs.

According to the minister, the President Bola Tinubu-led administration has demonstrated its unwavering commitment to improving energy access, reliability, and sustainability for all Nigerians.

He said that although states have the constitutional rights to develop their own electricity markets under the Electricity Act 2023, he highlighted that coordination with the Federal Government is key to safeguard the integrity of the national power system.

The minister, however, said it is high time the Federal and state governments worked together to safeguard the integrity of the national grid, optimise resources as well provide reliable and affordable electricity to all Nigerians irrespective of where they live or stay.

He urged the commissioners to prioritise the electrification of unserved and underserved communities in their various states and expand energy access which said remain the main ingredient of the national electrification agenda.

Adelabu said, “As we are all aware, under the leadership of His Excellency, Mr President, the Federal Government has continued to demonstrate unwavering commitment to improving energy access, reliability, and sustainability for all Nigerians.

“Some of our key milestones include the signing of the Electricity Act 2023, which has unlocked the opportunity for States to develop their own electricity markets; the development of the first National Integrated Electricity Policy in over two decades; and the attraction of significant local and foreign investments into generation, transmission, and distribution infrastructure.

“These achievements are only the foundation for greater progress, and we recognise that real, lasting impact can only be achieved through strong partnerships with all stakeholders including you the States Government. We therefore look forward to working more closely with you to accelerate electrification, deepen market development, and expand access to affordable, reliable power across all communities.

“As you embark on the development and evolution of your respective State electricity markets, I wish to emphasise the importance of improved coordination between the Federal and State Governments.”

He added, “While we fully respect the constitutional rights of States to determine how their electricity markets should evolve, it is equally critical to involve the Federal Government, particularly as the custodian of the national grid and wholesale market to ensure that market developments at the State level do not inadvertently disrupt the stability and efficiency of the entire sector.

“The national electricity market is an interconnected system that depends on coordinated generation, transmission, and distribution operations across State borders. Any misalignment or uncoordinated action at the subnational level can create technical, commercial, or regulatory conflicts that weaken grid stability, disrupt power supply to neighbouring States, and undermine investor confidence.

“By working together and ensuring alignment, we can safeguard the integrity of the national grid, optimise resources, and provide reliable and affordable electricity to all Nigerians, regardless of where they live.”

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