Nigeria’s power generation companies have incurred losses amounting to ₦2.31 trillion over the past twelve years due to electricity that was available for production but went unused because of grid and operational limitations.
Fresh data from the Association of Power Generation Companies, the umbrella body for all electricity generation firms in the country, revealed that the losses were recorded between 2013 and September 2025.
The report noted that the amount represents the cumulative value of power that could have been generated but was not evacuated by the national grid or delivered to consumers, according to The Punch.
The data, obtained from the National Control Centre and presented by the Managing Director/Chief Executive Officer of the APGC, Joy Ogaji, during the association’s 20th anniversary celebration, underscores the deepening financial strain in Nigeria’s electricity market. Power producers, she noted, continue to bear huge losses from stranded generation capacity.
In simple terms, the Annual Capacity Payment Loss represents the monetary value of power generation capacity that was available but could not be utilised or delivered to consumers due to technical or operational bottlenecks within the transmission and distribution systems.
For instance, while generation companies often declare an available capacity of between 6,000MW and 7,000MW, the national grid typically evacuates only about 4,500MW — a shortfall that translates into billions of naira in lost capacity payments.
The findings point to deep-rooted structural inefficiencies within Nigeria’s electricity market, where over 2,000 megawatts of power remain stranded each year despite significant post-privatisation investments in generation capacity.
According to the data, stranded generation between January and September 2025 averaged 2,221.99MW, resulting in ₦119 billion in capacity payment losses during the nine-month period.
A cumulative review from 2013 shows that the market has lost more than ₦2.3 trillion to idle generation capacity that could not be transmitted or distributed — funds that could have financed hundreds of substations or developed new gas-fired power plants.
The data further revealed that in 2015, about 3,010.24MW, representing 45.50 percent of available generation, was left unutilised, costing the sector ₦214.93 billion. The situation worsened in 2016, Nigeria’s worst year on record, with 3,827.98MW stranded — 54.38 percent of capacity — translating to ₦273.32 billion in losses.
In 2017, 3,311MW of power was stranded, leading to a ₦236.47 billion loss, while in 2018, stranded capacity rose to 3,698MW with losses amounting to ₦264.08 billion. The trend continued in 2019 and 2020, with ₦256.85 billion and ₦266.10 billion lost respectively, as 3,597MW and 3,742MW of power went unused.
Notably, from 2021, the issue of stranded power showed signs of improvement. That year, losses dropped to ₦159.85 billion, with 2,248MW of unutilised capacity. The trend continued in 2022, with stranded power further declining to ₦132.19 billion and 1,816MW. However, 2023 saw a slight rebound, recording ₦162.06 billion in losses and 2,226MW of stranded capacity, while in 2024, the figures stood at ₦154.72 billion and 2,180MW respectively.
Between January and September 2025, Nigeria’s available generation capacity averaged 6,806.63MW. Of this, only about 4,637.72MW was actually transmitted and consumed, leaving an average of 2,221.99MW stranded each month.
A breakdown of the 2025 data showed that the highest capacity payment losses occurred in August, amounting to ₦20.17 billion, followed by September with ₦16.86 billion and July with ₦15.77 billion. The lowest loss was recorded in February at ₦8.34 billion.
Overall, total capacity payment losses for the nine-month period stood at ₦113 billion, highlighting the persistent issue of idle generation in a country still grappling with inadequate electricity supply.
Presenting the data, APGC Managing Director/Chief Executive Officer, Joy Ogaji, noted that Nigeria’s power market remains burdened by inefficiencies, mounting unpaid obligations, and frequent policy inconsistencies.
“All this power that is stranded, that is not being used, there is a capacity charge to it, and that is what this data captures.
“What the GenCos are asking the government to pay now doesn’t even include this. What we are owed is only for energy, not capacity,” she stated.
Nigeria’s power sector was privatised in November 2013, when the Federal Government transferred the assets of the former Power Holding Company of Nigeria (PHCN) to private investors as part of efforts to boost efficiency and expand electricity supply across the country.
Under the Performance Agreement signed with the Bureau of Public Enterprises (BPE), the Generation Companies (GenCos) were assured of three key guarantees — uninterrupted gas supply, unhindered grid access for power evacuation, and full payment for both energy supplied and capacity made available.
However, according to Ogaji, the implementation of these commitments collapsed once the Nigerian Bulk Electricity Trading Plc (NBET) assumed the role of market operator.
“At the beginning, GenCos were paid capacity charges. But once NBET was introduced, the payment story changed. That’s when we started hearing story upon story, and capacity payments became irregular.
“Even though GenCos have grown capacity and maintained their plants as agreed, the sector still operates below potential because the grid cannot take what we produce,” Ogaji said.
She further noted that the liquidity crisis in the power market has deepened, as GenCos—who rely on capacity payments to service loans, procure gas, and maintain their plants—have consistently received less than 100 percent of their monthly invoices.
“The non-payment of capacity charges undermines the bankability of GenCos. Without a sustainable payment mechanism, it will be impossible to finance major maintenance or expand the total national supply,” she added.
