Nigeria Looks to Indian Energy Models to Salvage Fragile State Electricity Market Reforms

Nigeria explores India’s electricity market evolution to guide its own decentralization under the Electricity Act 2023 and ensure long term financial stability.

By: AXL Media

Published: Apr 24, 2026, 6:12 AM EDT

Source: Information for this report was sourced from The Authority

The Precarious Shift Toward Subnational Power Autonomy

Nigeria has reached a pivotal juncture in its energy narrative as the nation moves to dismantle a centralized power architecture that has long struggled with inefficiency. Under the legislative framework of the Electricity Act 2023, state governments are now authorized to generate, distribute, and regulate electricity within their own jurisdictions. This shift represents a significant departure from federal exclusivity, mirroring the structural unbundling seen in the Indian Electricity Act of 2003. According to energy policy expert Nkemjika Nnenne Ani, this decentralized approach offers a theoretical path to stability, yet the transition remains fraught with the danger of sector fragmentation if not managed with absolute technical precision.

Lessons From Two Decades of Indian Market Unbundling

The Indian experience serves as a complex blueprint for Nigerian policymakers attempting to modernize their local grids. Since 2003, India has unbundled its state electricity boards into independent generation, transmission, and distribution units while establishing autonomous regulatory commissions. A standout feature of this evolution is the open access system, which allows high volume consumers to bypass local distributors and purchase power directly from generators. In Maharashtra, for instance, industrial hubs procure renewable energy from neighboring Gujarat by paying a regulated network fee. This competitive mechanism took nearly a decade to mature, suggesting that Nigeria must prioritize foundational stability over rapid market liberalisation.

The Divergent Paths of Regional Energy Performance

Data from the Indian State Electricity Transition 2026 Report indicates that progress across subnational markets is rarely uniform. The research highlights a disconnect between environmental goals and financial viability, noting that states leading in decarbonization often struggle with utility performance. Karnataka and Himachal Pradesh have achieved high renewable energy penetration, with the latter reaching roughly 65% in its power mix, yet these achievements do not inherently result in a sustainable market. Conversely, Delhi maintains a highly reliable supply and robust distribution operations despite lagging in renewable expansion. This disparity underscores the necessity for Nigerian states to adopt a holis...