KEY POINTS

• Power firms lost N2.3 trillion to stranded generation capacity.

• Over 2,000 megawatts go unused each year.

• Grid and payment failures threaten industry viability.

Nigeria’s power-generating companies have forfeited over N2.3 trillion in twelve years due to stranded power capacity that could not be evacuated to homes and industries, according to data from the Association of Power Generation Companies.

The losses, spanning from 2013 to September 2025, reflect the deep inefficiencies that have long plagued the country’s electricity market.

Grid failures fuel stranded power capacity

Figures from the National Control Centre show that available generation capacity regularly exceeds the power that the national grid can transmit. While generation firms routinely declare between 6,000 and 7,000 megawatts available, the grid evacuates just about 4,500 megawatts—leaving billions of naira in unutilised capacity payments. The APGC Managing Director, Joy Ogaji, said these losses have accumulated yearly as operators continue to bear the cost of unused generation.

Between January and September 2025 alone, the market lost an estimated N119 billion due to stranded generation, with an average of 2,221.99 megawatts of power wasted monthly. That represents roughly 32 percent of available supply. In earlier years, the problem was even worse, with 2016 marking the sector’s worst year—over 3,827 megawatts left unused and losses of N273.32 billion.

Persistent inefficiencies weigh on generation firms

The roots of Nigeria’s stranded power capacity stretch back to the privatisation of the electricity sector in 2013. Under the agreement, power producers were promised guaranteed gas supply, grid access, and full payment for both energy delivered and capacity made available. Yet, according to Ogaji, those assurances faltered once the Nigerian Bulk Electricity Trading Plc took over as the market operator.

Capacity payments, which help GenCos maintain plants and service loans, have become irregular. “What the government owes us today covers only energy, not capacity,” Ogaji explained. The result is mounting debt and limited investment in maintenance or expansion, even as demand for electricity far exceeds supply.

The Federal Government’s inefficiency in strengthening the transmission network has worsened the problem. Power Minister Adebayo Adelabu recently lamented that more than 10 gigawatts of installed generation capacity remain idle nationwide while millions of Nigerians live without steady electricity.

According to Punch, the APGC estimates that a 1 percent rise in power supply could lift Nigeria’s GDP by nearly 4 percent. Yet the ongoing losses from stranded power capacity in Nigeria have stifled industrial productivity and slowed economic growth. The association has urged the government to honour power purchase agreements, reinforce transmission lines, and promote bilateral energy contracts to ease the grid’s load and ensure more efficient power evacuation.

If half of the stranded 2,000 to 3,000 megawatts had reached factories and households, analysts estimate the economy could have grown by as much as 12 percent over the last decade. For now, Nigeria’s challenge remains less about generation and more about the inability to transmit and distribute what is already available, a paradox that continues to darken the country’s development prospects.