The Federal Government has warned electricity generation companies, GenCos, of heavy penalties and possible disconnection from the national grid over non-compliance with operational standards.
The Nigerian Electricity Regulatory Commission, NERC, issued the order following persistent grid collapses across the country. The directive, contained in Order No. NERC/2025/094, was signed on August 26, 2025, by the commission’s Vice-Chairman, Musiliu Oseni, and the Commissioner, Legal, Licensing & Compliance, Dafe Akpeneye. It became effective on September 1, 2025.
At the heart of the order is the mandatory deployment of Free Governor Control, FGC, across all generating units. In power generation, a governor regulates the speed or output of turbines and generators, ensuring stable frequency. FGC allows turbines or generators to automatically adjust their output in response to changes in grid frequency, enhancing stability.
According to the order, GenCos that fail to activate FGC on their units by November 30, 2025, “shall be liable to a penalty of a prorated 10 per cent of the invoice associated with the defaulting generating unit, and any generating unit that records 90 consecutive days of FGC non-compliance shall be disconnected from the grid.”
The commission stressed that the measure is necessary to curb repeated disturbances and enforce strict compliance with the Grid Code. It explained that the initiative aims to “establish a structured framework for enhancing power generation reliability and stability of Nigeria’s power grid by ensuring strict compliance with operational frequency limits, implementing transparent monitoring mechanisms, and penalties for violations of the Grid Code.”
Citing section 34(1)(e) of the Electricity Act 2023, NERC said it is empowered to ensure safety, reliability, and quality of electricity supply, while section 34(2)(b) authorises it to establish operating codes and standards.
It reminded operators that “Section 12.6.2 of the Grid Code for the Nigerian Electricity Transmission System requires all generating units to be fitted with fast-acting FGC that is capable of regulating turbine speed and adjusting power output based on frequency deviation exigencies, i.e., primary control.”
The order added: “The FGC shall be sufficiently damped for both isolated and interconnected operation modes. The FGC and any other superimposed control loop (load control, gas turbine temperature limiting control, etc.) shall contribute to the primary control to maintain the unit within the generating unit’s capability limits.
“Furthermore, the primary control characteristics shall be maintained under all operational conditions. Where a generating unit becomes isolated from the system but is still available to supply demand, the generating unit must be able to provide primary control to maintain frequency and voltage.”
NERC recalled that the national grid suffered eight disturbances in 2024, including five full system collapses and three partial failures. Reports by the Transmission Company of Nigeria, TCN, linked many of the incidents to non-compliance with the Grid Code by some GenCos.
The regulator explained that the new order is to ensure mandatory FGC activation in all generating units to boost reliability and “promote strict compliance with FGC requirements to minimise the risk of system disturbances and engender stable grid operations while establishing penalties for non-compliance.”
It further directed that “GenCos shall at all times activate and operate the FGC in real-time without any time delays. GenCos are mandated to procure and supply a Grade Level 5 metering system with IoT-based monitoring capabilities for each generating unit and communicate readiness for installation to the NISO by 31 October 2025.”
According to the order, “The Nigerian Independent System Operator shall install and integrate all IoT metering systems provided by the GenCos within 20 days of receiving notification of readiness for meter installation from each GenCo. NISO shall actively monitor and enforce strict compliance with the operationalisation of FGC mode in generating units. This shall be achieved through real-time data obtained from the Grade Level 5 IoT meters, ensuring accurate tracking, validation, and assessment of the performance of generating units.
“NISO shall maintain real-time monitoring and record hourly compliance reports on the operation of FGC across all generating units. NISO shall compile and file monthly reports with the commission on the status of compliance with the provisions of the Grid Code on FGC to facilitate regulatory oversight.”
On sanctions, the regulator declared: “Any GenCo that fails to comply with the provisions of sections 12.6.2 and 15.8.3 of the Grid Code on the integration and activation of FGC on all generating units by 30 November 2025 shall be liable to a penalty of a prorated 10 per cent of the invoice associated with the defaulting generating unit for the duration during which it was not operated with its FGC activated, that is, FGC non-compliant.
“Where a generating unit records 90 consecutive days of FGC non-compliance, the affected generating unit shall be disconnected from the grid. Reconnection shall only occur after NISO has certified the unit as fully compliant with the requirements of the Grid Code.
“NISO shall be responsible for determining non-compliance by defaulting GenCos and implementing penalties on the invoice and settlement of the affected GenCo. NISO shall handle the billing, payment processing, and dispute resolution for this penalty in accordance with Rules 28 and 29 of the Market Rules. NISO shall invoice defaulting GenCos the specified penalty amount as part of the monthly market settlement. The proceeds of the penalty shall be remitted to the Ancillary Service Account.”
