Emmanuel Addeh in Abuja 

The magnitude of Nigeria’s long-running electricity supply crisis has once again come to the fore, as new industry data reveals that Generation Companies (Gencos) lost over N2.2 trillion to stranded power in the last 10 years and eight months.

The figures released by the Association of Power Generation Companies (APGC), seen by THISDAY, highlight a persistent structural failure in the sector. Even though Nigeria has the installed capacity to generate far more power than is being supplied to homes and businesses, a huge chunk remains idle because of bottlenecks in transmission and distribution infrastructure.

In essence, stranded power generation refers to the electricity capacity that the country’s Gencos could produce but is not actually delivered to consumers. It is power that exists in theory but remains unused due to a combination of technical, financial, and operational constraints. 

Currently, outstanding debt owed to the owners of the power plants stands at around N5.6 trillion, raising concerns over the stability of the national grid and the country’s ability to sustain its electricity supply.

The data showed that for instance, in 2015, stranded generation was high, with 3,010.24MW (45.50 per cent) left unutilised, costing the sector N214.93 billion. Similarly, in 2016, Nigeria recorded its worst year on record, with 3,827.98MW stranded on average, representing 54.38 per cent of available generation capacity. That year, the financial loss to the sector stood at N273.32 billion.

In 2017, 3,311MW of power was stranded, leading to an annual capacity payment loss of N236.47, while in 2018, losses reached N264.08 billion as stranded capacity hit 3,698MW, while in 2019 and 2020 the figures were N256.85 billion and N266.10 billion respectively as well as roughly 3,597MW and 3,742MW in the various years. 

Admittedly, from 2021, the stranded power challenge appeared to have reduced, with a N159.85 billion and 2,248MW loss, while in 2022, it reduced even further to N132.19 billion and 1,816MW respectively. 2023 experienced stranded power amounting to N162.06 billion and 2,226MW, while the whole of 2024 yielded capacity losses of N154.72 billion and 2,180MW respectively.

President Bola Tinubu met with the Gencos on July 25 to discuss the estimated N4 trillion debt that has been reconciled by the parties, covering legacy debts and unpaid invoices, stressing that he had approved a N4 trillion bond programme to address the liquidity gap. The Gencos insist that since then, there has been no word from the authorities.

In recent times, according to the APGC data, between January and August 2025, the country’s power plants had an average available generation capacity of 6,671.61 megawatts (MW). Out of this, only 4,809.11MW was on average delivered to the grid.

That means roughly 32 per cent of power that could have been utilised was wasted, the information showed. In financial terms, the underutilisation translated to N102.20 billion over the eight months this year.

The breakdown of monthly losses shows that August 2025 was the worst period, with N20.17 billion lost as stranded capacity rose to 3,326MW. July followed closely with N15.77 billion, while February recorded the least loss at N8.34 billion. In January, Gencos lost N13.29 billion; N10.95 billion in March; N10.71 billion in April and N11.07 billion in May as monthly capacity payment losses.

Stranded generation is not new to Nigeria’s power sector. Historical figures from the APGC show that the problem has persisted for more than a decade, with losses running into hundreds of billions of naira annually.

However, despite its enduring negative impact on the power sector, by comparison, 2025 has seen a reduction in losses, at least so far.  Nevertheless, sector stakeholders argue that the very existence of such consistent losses in a country plagued by chronic power shortages underscores the inefficiency of Nigeria’s electricity value chain.

Nigeria’s electricity transmission network, managed by the Transmission Company of Nigeria (TCN), remains fragile and unable to carry more than about 5,500MW reliably at any given time. In many cases, when generation companies produce beyond this threshold, the excess must be curtailed to prevent grid collapse.

On the distribution side, the 12 electricity Distribution Companies (Discos) have consistently struggled to upgrade their networks. Many distribution transformers and feeder lines are outdated, overloaded, or poorly maintained, limiting their ability to take on more power even when it is available.

As a result, generation companies, who already face challenges with gas supply and plant maintenance, are further hamstrung by bottlenecks downstream that leave much of their output stranded.

Nigeria, Africa’s largest economy, has an estimated electricity demand of over 25,000MW. Yet for years, supply has hovered between 3,500MW and 5,000MW daily, far below what is required to power industries, businesses, and households.

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