• 13,625MW capacity national grid crashes to 3,000MW
• GenCos blame crisis on N4tr debt
• 8,229MW idle in Q2, says report
• ‘Poor remittance driving power sector crisis’

Nigeria’s epileptic power sector is throwing more consumers into darkness as grid capacity shrinks to about 3,000 megawatts (MW). The current darkness is unconnected to gas constraints, liquidity crisis and ageing plants, which have triggered over N5 trillion loss.
 
Electricity from the grid, on Tuesday, crashed to an average of 3,000 megawatt despite an installed capacity of over 13,000MW. This comes in the face of high tariffs on bands A and B customers promised an improved power supply, with the Minister of Power, Adebayo Adelabu, assuring that the country would keep supply at an average of 5,000MW.

Yesterday, the Nigerian Independent System Operator (NISO) said electricity supply across the country would improve within the next 24 to 48 hours. The operator, in a statement, said the significant drop in electricity generation was caused by the recent Escravos-Lagos gas pipeline (ELP) explosion.

NISO said it was closely monitoring the ongoing repair work by the Nigerian Gas Processing and Transportation Company (NGPTC), a subsidiary of the NNPC, on the pipeline.
 
While the national grid was generating about 3,200MW at 5 p.m. on Tuesday with 17 active power plants, the grid dropped further by 6 p.m. to 2,652.05 MW as reported by 13 generation companies.
 
According to data by the Nigerian Electricity Grid (NIGGRID), total electricity load allocation across the country to all the distribution companies (DisCos) stood at 3,240 megawatts (MW) as of 5:57 p.m. on Tuesday. Abuja Electricity Distribution Company received the highest allocation at 496MW, followed closely by Ikeja Disco with 489MW and Eko Disco with 417MW.
 
Ibadan Disco was allocated 388MW, while Benin and Enugu DisCos received 264MW and 252MW, respectively. Port Harcourt Disco was allocated 230MW, with Kano and Kaduna DisCos receiving 218MW and 209MW, respectively.
 
Jos Disco received 183MW, while Yola Disco recorded the lowest allocation at 94MW.  Despite loans from the World Bank, African Development Bank (AfDB) and other development financial institutions, including the $2.3 billion deal between Nigeria and Germany to ensure an additional 7,000MW gets to homes, more Nigerians may spend the festive season in darkness.
 
Fresh regulatory and grid data reviewed by The Guardian showed that over 60 per cent of Nigeria’s installed power generation capacity remained unavailable for dispatch in the second quarter of 2025, even as households and businesses endured worsening outages and rising self-generation costs.
 
Figures from the Nigerian Electricity Regulatory Commission (NERC) and the Nigerian Independent System Operator (NISO) revealed that although Nigeria has a grid-connected installed generation capacity of 13,625 megawatts (MW), average available generation during the period stood at just 5,395.72MW.
 
This translates to a plant availability factor (PAF) of 39.6 per cent, meaning that at any point during the quarter, about 8,229MW of electricity capacity was idle, unable to deliver electricity to the grid.
 
Beyond darkness, the economic consequences are severe. Using conservative NERC-aligned bulk electricity pricing assumptions, The Guardian analysis shows that the stranded capacity represents about N415 billion in foregone market revenue every month, amounting to nearly N5 trillion yearly.
 
The figure closely mirrors the electricity sector’s mounting debt burden and helps explain the chronic liquidity crisis choking generation companies and gas suppliers.
 
At the centre of the collapse are gas-fired power plants, which account for more than 70 per cent of Nigeria’s installed generation capacity. NERC and NISO data showed that many thermal plants operated far below nameplate capacity in Q2, while others produced no electricity for extended periods.
 
Daily grid records for December revealed repeated instances where at least 15 grid-connected plants recorded zero output, including Alaoji NIPP, Olorunsogo NIPP, Omoku, Sapele Steam, Rivers IPP, Ihovbor NIPP and Trans-Amadi, most of them gas-dependent facilities.
 
Even operational plants underperformed sharply. Delta Power Station, with an installed capacity of 900MW, averaged just 440.83MW, while Olorunsogo 1 saw its availability drop from 48.3 per cent in Q1 to 41.17 per cent in Q2.
 
Also, Odokpani NIPP deteriorated even more steeply, falling from 55.5 per cent to 35.72 per cent within a single quarter. Alaoji NIPP, in a stark illustration of the crisis, recorded a PAF of zero, dispatching no electricity throughout the period.

On the explosion, NISO noted: “This explosion caused a significant drop in electricity generation. Recall that, following the explosion, several gas-fired power stations recorded low outputs, reducing available generation capacity on the national grid and resulting in a shortfall in electricity supply to customers.

“NISO is in close contact with the Nigerian Gas Processing and Transportation Company and has been assured that restoration work on the vandalised pipeline is nearing completion.

“It is expected that the vandalised pipeline will be fully operational within the next twenty to forty-eight hours, allowing the affected power plants to resume operations and restore full electricity supply to Nigerians.”

While gas shortage has long been blamed for Nigeria’s power woes, industry insiders argue that the crisis has evolved beyond fuel availability into a deeper failure of market discipline and payment enforcement.
 
Executive Secretary of the Association of Power Generation Companies (APGC), Dr Joy Ogaji, told The Guardian that Nigeria’s electricity crisis was no longer driven by gas scarcity, but by unpaid obligations, broken contracts and weak commercial confidence across the value chain.
 
“Nigeria does not have a gas shortage. Gas suppliers have enough supply to support over 10,000MW of electricity. The only shortage we have is payment,” she said. According to her, national generation continued to hover below 6,000MW because power plants could not pay for the gas already available to them.
 
She emphasised that gas suppliers had repeatedly confirmed their readiness to supply fuel if GenCos could meet even 50 per cent of payment obligations, a threshold, she said the sector had failed to reach.
 
Ogaji traced the imbalance to decisions taken after the 2013 privatisation, when promised sovereign guarantees for core generation companies were withdrawn and replaced with the Nigerian Bulk Electricity Trading Plc (NBET) as a buffer, a role NBET had struggled to perform amid tariff shortfalls and delayed subsidy payments.
 
She revealed that while newer plants such as Azura-Edo, which operates under internationally bankable guarantees, continued to record availability rates above 90 per cent, older plants, including Egbin, Sapele, Geregu and Ughelli, alongside the major hydro stations, still operate without renegotiated power purchase agreements more than a decade after privatisation.
 
“They buy the same gas, face the same operating costs and generate the same power, yet only some are protected. That is market cherry-picking, and it undermines efficiency and investor confidence,” Ogaji said. Hydropower, traditionally Nigeria’s fallback during gas disruptions, has also lost its stabilising role.
 
According to NERC, the country’s major hydro stations, Kainji, Jebba, Shiroro and Zungeru account for roughly 2,500 to 2,700MW or about one-fifth of installed grid capacity, yet their actual contribution has become increasingly volatile.
 
Regulatory and system-operator data show that changing rainfall patterns, characterised by shorter, intense rainy seasons followed by prolonged dry spells, have reduced effective reservoir storage, particularly at Shiroro, limiting sustained generation even during wet periods.
 
As a result, when gas-fired plants fail, hydro stations are unable to fully compensate, exposing the grid to deeper supply deficits. On December 23, 2025, total load accepted by DisCos stood at just 3,127MW, far below both installed and available capacity. Several DisCos, including Yola, Jos, Kaduna and Kano, each took less than 250MW, forcing generators to shut down units despite idle capacity.
 
“When power is rejected by DisCos, nobody answers who pays the GenCo,” Ogaji said, warning that gas already contracted and delivered into pipelines could not be stored, turning rejected load into immediate financial loss.
 
At conservative market pricing, every megawatt running continuously is worth about N50 million a month. With more than 8,200MW idle, the electricity market forfeits roughly N415 billion monthly, a gap that closely mirrors the over N6 trillion in accumulated sector debts identified by NERC, largely owed to GenCos and gas suppliers.
 
Analysts explained that Nigeria does not lack power plants; rather, it lacks a functioning electricity market capable of turning capacity into power and power into revenue.
 
Until gas supply obligations are enforced, climate risks are better managed and market contracts are honoured from generation to distribution, the grid would continue to run far below potential and the economy would continue to pay the price, analysts said.
 
Backing this position, energy analyst, Prof. Dayo Ayoade, said Nigeria’s electricity challenges were overwhelmingly systemic, arguing that governance failures accounted for over 60 per cent of the sector’s dysfunction.
 
He noted that while gas supply disruptions and ageing hydropower infrastructure remained concerns, these challenges could be managed within a properly structured market.
 
Instead, Nigeria operates what he described as a deficient electricity market, where tariffs are insufficient to cover costs, subsidies persist and large industrial consumers critical for market viability have exited the grid.
 
“If you don’t set the scene properly through governance, regulation, liquidity and confidence, the technical issues will not have room to work.
 
“You cannot run an electricity market on household consumers alone.” He warned that without adequate tariffs, strong institutions and coordinated action across generation, transmission and distribution, claims of sectoral progress were difficult to sustain.
 
On hydropower, he said Nigeria was utilising only a fraction of its vast potential due to ageing infrastructure, poor maintenance and climate variability, compounded by the absence of a robust legal and governance framework to manage these risks.
 
The analysts warned that unless Nigeria restored market discipline, enforced contracts, strengthened governance and fixed liquidity, increased gas supply or incremental infrastructure upgrades would not translate into improved electricity supply.
 
Speaking on the state of the power sector, Lanre Elatuyi, an electricity market analyst, cited data from the NERC’s second quarter 2025 report, which showed that a significant portion of the country’s available generation assets was unable to operate optimally.
 
Elatuyi attributed the situation primarily to the inability of power generation companies (GenCos) to secure firm gas supply contracts, noting that liquidity shortfalls across the electricity value chain had made it difficult to meet obligations to gas suppliers.
 
“When market remittance is low and GenCos are not paid 100 per cent of their invoices by the DisCos, there is no way they can sustain firm gas contracts,” he said.
 
Elatuyi added that outstanding obligations to gas suppliers had worsened feedstock availability for gas-fired plants that account for about 80 per cent of Nigeria’s generation mix.
 
Beyond gas constraints, the analyst confirmed that several plants were idle due to deferred maintenance, which he linked to poor cash flow.
Elatuyi described the sector’s availability factor of 39.6 per cent as “deeply concerning,” stressing that it undermined any claim of progress in the power industry.
 
He explained that weak electricity offtake by distribution companies (DisCos) had continued to limit generation, as power could not be produced beyond what could be transmitted, distributed and paid for.
 
He also raised concerns over the ineffective implementation of partial activation of contracts, under which DisCos were expected to offtake contracted energy volumes or pay liquidated damages when they fall short.
 
“There is an urgent need to improve the commercial aspect of the power sector. What we are operating now is not working,” he said. On hydropower, Elatuyi noted that while hydro plants were expected to stabilise the grid during gas shortfalls, their output was seasonal and dependent on water levels, which tend to drop during the dry season.
 
He argued that the challenges in the power sector reflected systemic failure rather than the shortcomings of any single segment, pointing to unresolved subsidy policies, poor enforcement of market rules and weak wholesale market design.
 
According to him, the current electricity market was not viable and required urgent restructuring, including greater competition in the wholesale market, to ensure optimal dispatch and real-time balance between supply and demand.