Nigeria’s power sector is bracing for fresh turbulence following a new regulatory order mandating the compulsory implementation of free governor control (FGC) across all grid-connected generating units.
While the Nigerian Electricity Regulatory Commission (NERC) insists the move is essential to stabilise a fragile grid prone to repeated collapses, generation companies (GenCos) warned of heavy financial burdens and structural risks if the measure is enforced in isolation.
Signed on 26 August 2025 by NERC Vice-Chairman, Musiliu Oseni, and Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye, the order (NERC/2025/094) took effect from September 1.
It gives GenCos until November 30 to activate fast-acting FGC in all their generating units, backed by IoT-enabled metering systems for real-time monitoring by the Nigerian System Operator (NISO).
Penalties for non-compliance are severe, as the defaulter would face a prorated 10 per cent deduction from invoices for defaulting units, and possible disconnection after 90 days of violation.
The regulator’s decision follows a turbulent 2024 in which Nigeria’s grid suffered eight disturbances, including five full system collapses. Incident reports from the Transmission Company of Nigeria (TCN) repeatedly cited poor compliance with Grid Code provisions, particularly GenCos’ failure to activate FGC, as a major contributing factor. But the GenCos have, over the years, blamed weak transmission infrastructure for the problem.
FGC is a globally recognised mechanism that allows generating units to automatically adjust their output in response to sudden frequency changes on the grid.
Section 12.6.2 of Nigeria’s Grid Code already mandates its deployment, but enforcement has been lax. NERC now intends to change that by setting out strict timelines, monitoring frameworks, and sanctions. In its order, the Commission frames FGC as a technical necessity rather than an optional practice.
“The objective is to enhance the reliability of power generation and stability of grid operations,” the order states, stressing that system resilience depends on real-time frequency response.GenCos, however, argue that NERC is pushing responsibility disproportionately onto their shoulders without addressing wider market inefficiencies.
The Association of Power Generation Companies (APGC), led by Executive Secretary Joy Ogaji, insisted that mandatory FGC activation will impose significant maintenance and fuel costs on operators who already struggle with unpaid invoices and erratic dispatch instructions.
“The compulsion of the sector for plants to maintain free governor control bears huge financial implications to the generating companies,” Ogaji noted, explaining that operating plants below design capacity leads to higher gas consumption per unit of electricity generated.
Using a thermal station as an example, she highlighted that while 26.59 million standard cubic feet (mmscf) of gas is required to generate 98.97MW efficiently, part-loading the same plant at 65MW consumes 19.91mmscf. The net effect is greater fuel intensity—1.2254mmscf of gas per 4MW at part load compared to 1.074mmscf at baseload, a development which they claimed erodes efficiency and increases costs.
GenCos also warn that enforced part-loading exposes their equipment to mechanical stress. Variations in speed affect pumps, blowers and excitation systems, while automatic voltage regulators are forced to compensate, raising the risk of tripping.
“In the limit, generating units could trip on under- or over-speed, leading to cascading loss of supply and system collapse,” Ogaji cautioned.
GenCos’ broader grievance is that the Nigerian market does not compensate for spinning reserves, a deliberate withholding of capacity to stabilise the grid.
In other jurisdictions, Ogaji said this service attracts payment, but in Nigeria, GenCos only earn revenue for dispatched energy.
“Free governor control is important, but it does not provide reserves. Without proper market structures, the costs are being unfairly transferred to GenCos,” an industry source observed.
The order has thus sharpened long-standing tensions in the sector. Some stakeholders who supported NERC argue that frequency stability is the frontline defence against blackouts, and GenCos must shoulder responsibility as the first responders.
They noted that GenCos have a lot of roles to play since most collapses start from frequency instability, which sits with GenCos. Admitting also that system collapse is not a GenCo issue alone, the industry players said failures in transmission and weak infrastructure by distribution companies affect the grid.
Energy stakeholder, Bode Fadipe, insisted that preserving the grid is not solely a GenCo duty.
“Everyone in the value chain and up to the end user has a role to play. The man who goes on high-tension lines to vandalise is as dangerous as the man who chooses not to do the right thing about the FGMO.”
The fairness of NERC’s enforcement has also been questioned as stakeholders point out that TCN and distribution companies (DisCos) often contribute to instability through poor system planning, weak infrastructure, and sudden load variations.
While NERC frames FGC as a compliance issue, GenCos view it through the lens of market design, noting that frequency response can be mandated, but spinning reserve, which keeps units partially loaded for stability, requires compensation.
GenCos said that without this, the market needs to effectively subsidise grid reliability.
Enforce FGC as an immediate technical fix, while simultaneously creating a payment mechanism for ancillary services.
Some stakeholders also suggested that there is a need for FGMO to be compulsory now, while the next step is for NERC and Nigeria System Operators to create a proper payment structure for spinning reserve.
Even with FGC fully implemented, many doubt it can resolve Nigeria’s systemic grid fragility. The country’s transmission backbone remains weak, demand swings are often unpredictable, and DisCos struggle with load management due to chronic liquidity problems. Without investments in infrastructure and stronger coordination across the chain, frequency response may only mask deeper structural flaws.
