By Oke Peter
Nigeria’s chronic electricity shortages have long frustrated households, businesses, and investors. In response, several state governments have taken bold steps to reduce reliance on the national grid by establishing independent energy boards and alternative power initiatives. The 2023 Electricity Act, alongside complementary state legislation, legally empowered states to regulate, generate, and even distribute electricity within their borders. This marks a historic shift in a sector long dominated by the federal government and the Nigerian Electricity Regulatory Commission (NERC).
Lagos State has been a pioneer in this decentralized approach. Even before the 2023 reforms, Lagos established frameworks to attract independent power projects, including the 8.8 MW Mainland Power project, designed to power government facilities and street lighting. These early initiatives signaled Lagos’s determination to reduce grid dependency and serve as a model for other states.
Following Lagos, Ekiti State commissioned a 3.6 MW Independent Power Project in Ado-Ekiti in late 2023 to supply critical facilities such as hospitals, government offices, and universities. Though modest in scale, the project demonstrated how state-level efforts could complement national power provision.
Abia State quickly followed, launching an integrated energy project targeting multiple local government areas. Meanwhile, Enugu State took regulatory innovation further by establishing the Enugu State Electricity Regulatory Commission (EERC) in late 2024. EERC not only oversees state electricity markets but has also backed a 10 MW independent power plant, reflecting a strategic commitment to localized energy solutions.
By mid-2025, the decentralization movement had expanded, with up to a dozen states passing laws to create their own electricity markets. States such as Ondo, Ogun, Nasarawa, Jigawa, Delta, Plateau, Kogi, and Bayelsa were formalizing frameworks to regulate local distribution and attract independent power operators. Several states, including Nasarawa, Delta, and Jigawa, are focusing on mini-grids and off-grid renewable systems to serve rural communities and government facilities.
Despite these efforts, the impact of state-led projects on nationwide electricity stability remains limited. Most initiatives deliver power to localized zones—government offices, markets, and rural communities—rather than entire urban centers. Consequently, the broader population continues to rely heavily on generators, and national electricity shortages persist due to infrastructure gaps, fuel supply challenges, and underinvestment in the grid.
The decentralization model also introduces governance challenges. The Nigerian power sector has historically struggled with project delays, cost overruns, and mismanagement. Without strong oversight, state energy boards could face similar pitfalls, where political interference or corruption undermines efficiency and project delivery. Reports have documented multi-billion naira state-owned power projects that stalled due to mismanagement, highlighting the risks inherent in rapid decentralization.
Nevertheless, there are promising signs. Legal empowerment of states encourages public-private partnerships (PPPs) and embedded generation projects, attracting technical expertise and investment. Where states have combined regulatory clarity with credible private operators, projects tend to be more sustainable and deliver consistent power to targeted areas.
In summary, Nigeria’s state-led energy initiatives represent a significant institutional transformation. Early projects in Lagos, Ekiti, Abia, and Enugu have demonstrated the potential for localized power solutions, while a growing number of states are creating frameworks to expand independent electricity generation and distribution. Although these projects have not yet solved national power insecurity, they are reshaping governance in the sector, offering opportunities for innovation and targeted reliability. The success of this movement will depend heavily on good governance, transparency, and sustained investment, determining whether state-led energy boards can become a stable alternative to the national grid or fall victim to the same systemic challenges that have long plagued Nigeria’s electricity sector.
