The Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, has criticised threats to disconnect generation companies from the national grid, warning that unstable transmission and persistent market failures are damaging their plants and worsening financial losses.

The GenCos are also demanding regulations to ensure prompt payment of their revenues by offtakers.

Their position follows warnings from the Nigerian Electricity Regulatory Commission that non-compliant GenCos would be cut off from the grid if they fail to install the Free Governor Control.

NERC recently directed that any GenCo that does not integrate and activate FGC on all generating units by November 30, 2025, will face a prorated 10 per cent penalty on invoices linked to the defaulting unit. Units that remain non-compliant for 90 consecutive days risk disconnection from the grid.

“In all jurisdictions, the imperatives of the power transmission networks cannot be overemphasised. This is because the transmission network constitutes the vital channels of the entire power value chain. It goes without saying that the growth of the power sector is contingent on the development of a robust and non-collapsible transmission grid/network,” she said.

Ogaji further stressed that Nigeria’s thermal and hydro plants are being forced to run far below their baseload design, a situation that reduces efficiency and drives up operating costs.

“Any fluctuations in these conditions can cause the appliances to run at a lower efficiency. Power generators, like the hydros and thermals used in Nigeria, are no exception to this. Thermal power plants, like the gas turbines, are designed to operate optimally and efficiently at base load,” she stated.

According to her, repeated grid disturbances have pushed the system beyond its operational limits, endangering power plants and tripling maintenance costs.

Ogaji noted that frequency deviations outside tolerable limits are not only damaging GenCos’ units but also driving maintenance expenses to nearly three times the normal cost.

“The intervals between maintenance will decrease, and it will need more time for completion with a greater downtime of the generating units,” she warned. She argued that the absence of spinning reserves remains a major weakness.

“A fundamental aspect of operating an electricity power grid reliably is maintaining the frequency limits within the acceptable range. The nominal frequency in the NESI is 50 Hz. Maintaining power system frequency at a constant value is very important for the health of the machines. How can this be achieved without spinning reserve?” she asked.

She lamented that GenCos are saddled with costs unrecognised by the tariff structure. Running gas turbines far below their baseload, she explained, reduces efficiency and raises gas consumption by as much as 15–20 per cent—an expense neither acknowledged by the Nigerian Bulk Electricity Trading Plc nor reflected in the tariff order, while also inflating maintenance costs.

“It is imperative to state that even the declared capacity of the GenCos has not been fully utilised nor paid for,” she stated.