The Nigerian Independent System Operator says Nigeria’s power sector is losing between ₦5bn and ₦8bn monthly due to transmission inefficiencies, even as reforms begin to improve grid stability.
The Managing Director/Chief Executive Officer of NISO, Abdu Bello, disclosed this on Wednesday during the organisation’s first anniversary celebration at its headquarters in Utako, Abuja.
Mr Bello said the operator inherited a high transmission loss factor at inception, with severe financial implications for the electricity sector.
“One of the greatest problems we encountered… was a very high transmission loss factor… close to 10 per cent, costing about ₦5bn to ₦8bn monthly,” Mr Bello stated.
He added that targeted operational measures have reduced the loss level to about 7.05 per cent, with efforts underway to bring it down further to between five and six per cent in line with regulatory targets.
Reform milestones
Mr Bello said the past year has focused on institution-building, system stabilisation, and market reforms aimed at repositioning Nigeria’s electricity sector.
According to him, NISO was established as an independent system operator responsible for system operations, market administration, planning, and enforcement of grid codes and market rules.
“This mandate is central to Nigeria’s power sector reform… ensuring that our grid is stable, our market is credible, and our planning is coordinated,” Mr Bello said.
He added that the organisation has strengthened governance structures and improved coordination across generation, transmission, and distribution segments.
Digital transformation
A key highlight of NISO’s reforms is the push to digitise grid operations through advanced monitoring systems.
Mr Bello disclosed that the operator is accelerating deployment of Supervisory Control and Data Acquisition/Energy Management Systems (SCADA/EMS) to enable real-time grid visibility.
“We are improving our ability to see, understand, and manage the national grid in real time,” he said, noting that the project is nearing completion.
He added that telemetry systems and Internet-of-Things-based metering infrastructure are also being deployed across generation units, transmission lines, and substations.
According to Mr Bello, these upgrades will enable near real-time electricity market settlements and improve operational efficiency.
Grid stability efforts
Mr Bello said NISO has intensified efforts to tackle grid instability and recurring system collapses through technical reforms and stricter compliance enforcement.
He noted that implementation of the free-governor mode of operation among generating units has already improved frequency stability.
“Substantially, a number of generating units have complied, and we have seen improvements in system frequency and overall grid reliability,” Mr Bello said.
He added that enforcement actions are ongoing against defaulters.
The NISO boss also revealed plans to introduce grid “islanding,” a strategy that segments the national grid to prevent widespread outages.
“Disturbances in one segment will not cascade across the entire grid,” Mr Bello explained.
Market coordination
On market operations, Mr Bello said NISO is enhancing transparency, enforcing compliance with market rules, and strengthening coordination among stakeholders.
He noted that the operator is also managing the interface between emerging state electricity markets and the national wholesale market following recent reforms.
Mr Bello further linked recent fluctuations in power generation to gas supply challenges, stressing the need for stronger coordination between the power and gas sectors.
Regional integration
In a significant development, Mr Bello disclosed that Nigeria has achieved trial synchronisation of its national grid with the West African power system.
“On November 8, 2025, we successfully synchronised the Nigerian grid with the West African power pool,” he said.
According to Mr Bello, the integration creates opportunities for cross-border electricity trade, allowing Nigeria to export excess power or import when necessary, while earning foreign exchange.
Background
NISO was established on 30 April, 2024, by the Nigerian Electricity Regulatory Commission following the unbundling of the Transmission Company of Nigeria under the Electricity Act, 2023.
The reform is part of broader efforts to address long-standing inefficiencies, improve grid reliability, and modernise Nigeria’s power sector, which has struggled with frequent outages, system collapses, and inadequate infrastructure.
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