Nigeria is wasting more than 2,500 megawatts (MW) of electricity generation capacity every day because its transmission network cannot evacuate available power, even as an estimated 85 million Nigerians lack access to electricity, according to the Association of Power Generation Companies (APGC).
The association said the country’s electricity crisis is no longer primarily a generation problem but a transmission and market liquidity challenge that continues to cripple the power value chain, leaving businesses and households dependent on costly self-generation.
According to a report from ThisDay Newspaper, the chief executive officer of the APGC, Dr. Joy Ogaji, said Nigeria has sufficient installed generation capacity to significantly improve electricity supply, but weak grid infrastructure prevents available power from reaching consumers.
“Nigeria’s stranded power crisis is a transmission failure, not a generation failure,” Ogaji said. “The country has an installed capacity of over 15,500MW, yet the national grid can wheel only about 4,500MW. That gap is where the crisis lies.”
Transmission Bottlenecks Leave Thousands of Megawatts Idle
According to the APGC, between 2,500MW and 4,000MW of electricity generation capacity remains stranded or underutilized because the transmission system lacks the capacity to evacuate the power or suffers repeated infrastructure failures.
The association said declared stranded capacity averages between 150MW and 400MW daily, representing electricity that has already been generated—or is available for generation—but cannot be delivered to homes, industries and businesses.
Industry data show that as of December 2025, about 2,275.67MW of available electricity remained undelivered, representing 33.6% of total available generation—the highest stranded capacity recorded in five years.
The trend has remained persistent:
- 2021: 2,248MW stranded
- 2022: 1,816MW
- 2023: 2,227MW
- 2024: 2,180MW
- 2025: 2,275.67MW
The figures highlight a long-standing mismatch between electricity generation and transmission capacity despite billions of dollars invested in the sector.
Frequent Grid Collapses Continue to Disrupt Supply
The APGC said Nigeria’s transmission network remains highly unstable, citing 564 national grid collapses between 2000 and 2022—equivalent to more than two system failures every month for over two decades.
The instability persisted in 2026, when the country experienced three nationwide blackouts in January alone.
On January 27, 2026, electricity generation reportedly plunged from 3,825MW at 10:00 a.m. to just 39MW by 11:00 a.m., effectively wiping out about 99% of grid power within one hour as all distribution zones simultaneously lost supply.
Businesses Spend Billions on Self-Generation
The unreliable electricity supply has forced businesses and households to rely heavily on diesel and petrol generators.
The APGC estimates Nigerians spend approximately $23 billion annually operating about 22 million generators to compensate for inadequate grid supply.
The economic impact extends beyond fuel costs.
The World Bank estimates unreliable electricity costs Nigeria between $26 billion and $29 billion annually in lost economic output, while the African Development Bank (AfDB) says power outages reduce company revenues by about 3% of annual sales, with 70.7% of Nigerian businesses owning or sharing generators.
Ogaji said the burden is particularly severe for small businesses.
“A small tailor earning ₦4,000 a day can spend ₦3,000 on generator fuel,” she said. “Banks report diesel accounts for between 20% and 30% of their operating expenses. Every megawatt stranded represents businesses struggling to survive.”
Gencos Lose Trillions as Sector Debt Mounts
The generation companies also continue to face mounting financial losses due to transmission constraints and unpaid invoices.
According to the APGC, electricity transmission inefficiencies cost the market about ₦5 billion every day, while Distribution Companies (Discos) recorded combined losses of ₦2.349 trillion over the past two years because of poor billing and revenue collection.
The losses increased from ₦1.015 trillion in 2024 to ₦1.334 trillion in 2025.
For generation companies, the financial impact has become increasingly severe.
The APGC estimates Gencos lost approximately ₦2.28 trillion in capacity payments during 2025 alone because electricity produced could not be evacuated through the transmission network.
The association noted that this figure excludes revenue lost from energy sales.
Outstanding debts owed to Gencos have now exceeded ₦6.8 trillion and are projected to increase by another 33% by the end of 2026.
“Gencos are effectively maintaining and operating assets for a market that cannot pay them,” Ogaji said.
She warned that the liquidity crisis affects the entire electricity value chain, leaving generation companies unable to settle gas suppliers, reducing transmission revenues, limiting investment by Discos and widening payment shortfalls within the Nigerian electricity market.
Gas Supply and Transmission Infrastructure Remain Major Constraints
Beyond transmission bottlenecks, the APGC said thermal power plants continue to face inadequate gas supply, with deliveries falling below 43% of daily requirements.
Pipeline vandalism also remains a major challenge, with 128 transmission towers destroyed in 2024, while unpaid gas invoices have constrained power plants from operating at full capacity.
Industry stakeholders argue that although Nigeria has more than 15,500MW of installed generation capacity, the transmission network’s wheeling capacity of about 4,500MW remains the biggest obstacle to improving electricity supply.
They estimate technical losses on the grid average between 1,200MW and 1,300MW daily—enough electricity to supply a major commercial hub like Lagos.
APGC Calls for Transmission Reform
The association argued that improving Nigeria’s electricity supply requires urgent reforms to transmission infrastructure and market financing.
It called for the commercialisation or privatisation of the Transmission Company of Nigeria (TCN) to attract private-sector investment capable of modernising the grid and expanding transmission capacity.
According to the APGC, the proposal mirrors reforms undertaken in countries such as Egypt, which added about 14,000MW of electricity capacity within six years through sustained investment in power infrastructure.
The association maintained that unless transmission constraints, liquidity challenges and gas supply issues are addressed simultaneously, Nigeria will continue generating electricity that millions of citizens and businesses cannot access, undermining economic growth and industrial development.
Gencos: Over 2,500MW Generated Power Wasted Due to Grid Unreliability
Approximately 85 million Nigerians currently live without electricity access, with over 2,500 megawatts of available generation wasted daily because the grid cannot evacuate it, the Association of Power Generation Companies (APGC) has said.
Chief Executive Officer of APGC, Dr. Joy Ogaji, told THISDAY that the numbers paint a damning picture of a sector producing power that never reaches homes and businesses. Newspapers
“Nigeria’s stranded power crisis is a transmission failure, not a generation failure,” Ogaji said. “The country has an installed capacity of over 15,500MW, yet the grid can only wheel around 4,500MW. That gap is where the crisis lives,” she added.
According to the APGC, stranded or unutilised generation capacity runs between 2,500 MW and 4,000 MW, with declared stranded capacity averaging 150 MW to 400 MW daily. This is power that has been generated or is ready to be generated but cannot be delivered because transmission infrastructure is either absent or has broken down.
As of December 2025, THISDAY’s checks showed that 2,275.67 MW of available generation sat wasted and undelivered, the highest level in five years and equivalent to 33.6 percent of available generation going nowhere.
The trend has been consistent as data shows 2,248 MW was stranded in 2021, 1,816 MW in 2022, 2,227 MW in 2023, 2,180 MW in 2024, and 2,275 MW in 2025.
The human cost is immediate when viewed from the prism of hospitals having to run on generators, students studying by candlelight, and small businesses bleeding cash on fuel.
Between 2000 and 2022 alone, Nigeria’s national grid collapsed 564 times, according to APGC records, more than twice a month for over two decades.
In January 2026, the country suffered three nationwide blackouts in 30 days. On January 27, 2026, grid output fell from 3,825 MW at 10am to 39 MW by 11am. At that time, within one hour, 99 per cent of Nigeria’s electricity vanished as every distribution zone fell to zero simultaneously. GeographicReference
It is estimated that Nigerian businesses and households spend an estimated $23 billion annually on diesel and petrol to self-generate power across about 22 million generators. The World Bank puts the broader economic loss from unreliable electricity at $26 billion to $29 billion per year.
Similarly, the African Development Bank’s (AfDB) African Economic Outlook 2026 estimates outages cost firms 3 per cent of annual sales, with 70.7 per cent of Nigerian businesses forced to own or share generators. GeographicReference
“A small tailor earning N4,000 a day can spend N3,000 of it on generator fuel,” Ogaji said. “Banks report diesel at 20 to 30 percent of operating expenses. Every megawatt stranded is a business struggling or failing to survive.”
On the revenue side, the electricity market itself is hemorrhaging. The Nigerian Independent System Operator (NISO) estimated that transmission inefficiencies cost the sector approximately N5 billion daily. Distribution Companies (Discos) recorded combined losses of N2.349 trillion over the past two years from billing and collection inefficiencies, rising from N1.015 trillion in 2024 to N1.334 trillion in 2025.
For Gencos, the pain is acute as they lost an estimated N2.28 trillion in capacity payments in 2025 alone due to grid constraints that prevented evacuation.
That figure excludes energy charge losses. Sector debt to Gencos has now exceeded N6.8 trillion and is projected to rise another 33 per cent by end-2026.
Ogaji said: “Gencos are effectively maintaining and operating assets for a market that cannot pay them. These losses cascade. Gencos cannot pay gas suppliers. Transmission Company of Nigeria (TCN) loses wheeling revenue. Discos cannot fund network upgrades. Nigeria Bulk Electricity Trader (NBET)’s payment gaps widen. The entire value chain is caught in the same spiral.”
She insisted that Gencos were not the problem arguing that gas supply to thermal plants has fallen to under 43 per cent of daily requirement. She added that pipeline vandalism destroyed 128 transmission towers in 2024 alone while unpaid gas invoices have also left plants unable to run at capacity.
Among stakeholders, the transmission bottleneck remains the biggest chokepoint, as they argue that installed capacity of 15,500 MW far exceeds the 4,500 MW the grid can wheel. They say technical losses alone run at 1,200 MW to 1,300 MW daily, enough to power Lagos. According to APGC, liquidity is equally dire, saying starved of payment, Gencos cannot fund maintenance or buy parts. At distribution level, billing gaps, metering failures and energy theft mean that Discos lose billions before revenue reaches the market. The utility firms’ Aggregate Technical, Commercial and Collection (ATC&C) losses run at about 50 percent, against a global best practice of 15 percent.
Ogaji said the solutions were known but require urgency as APGC is calling for the privatisation or commercialisation of the TCN to inject private capital, similar to Egypt’s addition of 14,000 MW in six years.
Nigeria’s $2 Billion Renewable Energy Investment Creates Only 76,000 Jobs, REA Urges Local Manufacturing Push
Meta Description:
Nigeria’s Rural Electrification Agency says more than $2 billion invested in renewable energy has created only 76,000 jobs, urging stronger local manufacturing, skills development and bankable clean energy projects.
Nigeria’s $2 Billion Renewable Energy Investment Creates Only 76,000 Jobs, REA Urges Local Manufacturing Push
Nigeria’s renewable energy sector has attracted more than $2 billion in investment but generated only about 76,000 jobs, highlighting a significant gap in local workforce participation and industrial capacity, according to the Rural Electrification Agency (REA).
Speaking at the 2026 Oriental News Conference in Lagos on Thursday, REA Managing Director Dr. Abba Aliyu said Nigeria must shift from relying heavily on imported renewable energy technologies to building domestic manufacturing, technical expertise and local supply chains if it hopes to achieve a sustainable energy transition.
Aliyu, who was represented by Gboyega Ayoade, Executive Director of Corporate Services at the REA, said the country’s clean energy strategy should serve not only environmental goals but also industrial development and employment creation.
He noted that while the global solar industry supports about 16.2 million jobs, Nigeria’s renewable energy sector has created only around 76,000 jobs, despite billions of dollars in investment.
“The figures clearly show that Nigeria must deliberately develop local capacity,” he said. “Energy policy must also function as industrial policy by promoting Nigerian participation rather than long-term dependence on imported equipment and foreign expertise.”
Local Content Critical to Energy Transition
Aliyu stressed that renewable energy expansion should stimulate domestic industries through local assembly, manufacturing, installation, maintenance, recycling and skills development.
He said every renewable energy project should be evaluated not only by the amount of electricity generated but also by its contribution to Nigeria’s economy.
According to him, policymakers should assess whether projects create employment opportunities for Nigerian engineers and technicians, engage local installers, support domestic manufacturers, strengthen supply chains and facilitate technology transfer.
“This is how clean energy becomes an instrument of industrial policy,” he said.
The REA chief added that the agency is restructuring its programmes to align with the Federal Government’s Nigeria First policy, positioning renewable energy deployment as a driver of industrial growth.
He explained that large-scale renewable energy projects create predictable demand, which encourages manufacturers to invest locally, creates jobs, strengthens supply chains and ultimately reduces project costs.
Renewable Projects Face Financing Challenges
Aliyu identified inadequate project preparation and weak financing structures—not technology—as the biggest barriers to accelerating renewable energy deployment.
He said many clean energy projects fail to secure investment because they lack robust feasibility studies, credible demand assessments, reliable payment mechanisms and comprehensive risk mitigation frameworks.
“The major challenge is bankability,” he said.
He noted that investors are more willing to finance projects that demonstrate sound technical preparation, transparent revenue models, strong environmental and social safeguards, effective community engagement and clearly allocated risks.
To address these issues, the REA is collaborating with development finance institutions, commercial lenders and private-sector developers to improve project preparation and financing.
The agency is deploying instruments such as performance-based grants, minimum subsidy frameworks, blended finance models, demand aggregation, public-private partnerships and green finance platforms to make renewable energy investments more attractive.
Decarbonisation Must Support Economic Growth
Aliyu said Nigeria’s decarbonisation agenda should extend beyond reducing greenhouse gas emissions to encompass economic competitiveness, industrialisation, energy security and inclusive development.
Speaking on the theme, “Driving Nigeria’s Decarbonisation through Strategic Promotion of Clean Energy: The REA Experience,” he argued that climate action must reflect Nigeria’s development priorities.
“For Nigeria, decarbonisation cannot simply be about emissions reduction,” he said. “It must also strengthen competitiveness, industrial renewal, energy security, financing, technology adoption and inclusive economic growth.”
He called for an integrated regulatory framework linking the energy, finance, environment, manufacturing and investment sectors to support long-term clean energy development.
According to him, regulations governing emissions management, carbon capture, gas flaring reduction, sustainable finance and environmental reporting in the oil and gas sector should be harmonised, while rules covering mini-grids, embedded generation, net metering, electricity storage and distributed energy resources should continue evolving to support innovation.
Clean Energy Seen as Development Tool
Aliyu said Nigeria’s growing population, expanding electricity demand and infrastructure deficit require a pragmatic approach that simultaneously improves energy access, drives industrialisation and reduces carbon emissions.
He noted that millions of Nigerians still lack reliable electricity, businesses continue to grapple with high energy costs, public institutions remain dependent on diesel generators and rural communities require electricity to support productive economic activities.
“The challenge is not simply reducing emissions,” he said. “The real task is expanding electricity access, growing the economy, industrialising and lowering emissions at the same time.”
He maintained that decentralised renewable energy systems—including mini-grids and solar-powered infrastructure—offer a practical pathway to achieving those objectives by improving electricity access, reducing operating costs and supporting economic development in underserved communities.
Aliyu concluded that Nigeria’s clean energy transition should be viewed not merely as an environmental obligation but as an opportunity to build domestic industries, create skilled jobs and strengthen long-term economic resilience.
Nigeria’s $2bn Renewable Energy Investment Yields Only 76,000 Jobs, REA Flags Local Capacity Gap
Dr. Abba Aliyu, Managing Director of the Rural Electrification Agency (REA), has disclosed that Nigeria’s renewable energy workforce participation remains significantly low, with the sector generating only about 70,000 jobs despite attracting over $2 billion in cumulative investment, compared to the 16.2 million jobs supported by the global solar industry.
The gap, according to the REA MD, underscores the urgent need for a deliberate shift toward local capacity development, warning that Nigeria cannot build a sustainable energy transition on permanent import dependence.
The REA MD made this known in his keynote address at the 2026 Oriental News Conference held in Lagos, on Thursday.
Aliyu who was represented by Gboyega Ayoade, Executive Director, Corporate Services, stressed that energy policy must double as industrial policy—driven by local participation rather than expatriate dominance.
He said, “As renewable energy deployment grows, we must also grow local capacity for assembly, manufacturing, installation, operation, maintenance, recycling and skills development.
“This is where the Nigeria First policy becomes important. Clean energy must become a platform for local content, job creation and industrial value capture.
“Every major renewable energy programme should ask a simple question: beyond supplying electricity, what domestic capacity does this project build?
“Does it create jobs for Nigerian engineers and technicians? Does it use local installers? Does it create demand for local assembly? Does it support Nigerian firms? Does it strengthen the supply chain? Does it improve skills and technology transfer?
“This is how clean energy becomes an industrial policy tool,” he stated.
He further noted that REA’s programmes are being repositioned to align with this approach, leveraging clean energy as a strategic industrial policy tool.
“REA’s programmes are increasingly being positioned within this logic. Large-scale deployment creates predictable demand. Predictable demand gives confidence to manufacturers. Manufacturing creates jobs. Jobs expand incomes. And stronger local supply chains reduce costs over time.”
Aliyu revealed that key segments, including public sector solarisation, mini-grids, agricultural energy hubs, and institutional electrification, can serve as anchor markets for domestic renewable manufacturing rather than merely energy access projects.
The REA boss further emphasised that despite strong potential, many solar projects fail to advance due to weak bankability structures rather than technical limitations.
He explained that capital will only flow where projects are well-prepared, risks clearly allocated, revenue streams credible, and institutions trusted.
For him, the core constraint is not potential—but bankability.
“Projects often require stronger feasibility studies, clearer demand assessment, improved payment structures, robust technical preparation, environmental and social safeguards, deeper community engagement, and effective risk mitigation instruments.
“To address this, REA is working with development partners, financial institutions, and private developers to strengthen project preparation and financing frameworks.
“Through performance-based grants, minimum subsidy frameworks, blended finance, demand aggregation, public-private partnerships, and green finance platforms, the agency aims to improve investability across the sector,” he said.
Aliyu disclosed that Nigeria’s decarbonisation strategy must extend beyond emissions targets to a broader economic framework linking energy, finance, industry, and investment.
Speaking on Driving Nigeria’s Decarbonisation through Strategic Promotion of Clean Energy — The REA Experience, he said:
“For Nigeria, decarbonisation cannot be reduced to a narrow conversation about emissions alone.
“It must be a conversation about competitiveness, industrial renewal, energy security, climate resilience, financing, technology, and inclusive growth.
“It must recognise the structure of our economy, the role of oil and gas, the urgency of expanding electricity access, and the need to position clean energy as a catalyst for national development,” he said.
He stressed that achieving this requires coordinated, system-wide reforms.
“Decarbonisation cannot be achieved through isolated rules. It requires an integrated regulatory architecture that connects energy, finance, environment, industry and investment.”
He added: “Regulation must therefore enable innovation while protecting consumers and ensuring market discipline. This is where broad regulatory reform becomes essential.”
“For the extractive industry, regulations around emissions management, carbon capture, gas flaring reduction, clean energy adoption, environmental reporting and sustainable finance must be clear and coordinated.
For the power sector, regulations around mini-grids, embedded generation, net metering, wheeling, storage and distributed energy resources must continue to evolve.”
Aliyu cautioned that Nigeria’s decarbonisation pathway must reflect its development realities.
“We are a developing country with a growing population, expanding energy demand and significant infrastructure deficits.
“Millions of Nigerians still require access to reliable electricity. Businesses still face high energy costs. Public institutions still depend heavily on diesel. Industrial clusters still struggle with unreliable supply. Rural communities still need power for productive use.
“Therefore, the challenge before us is not simply to reduce emissions.
“The real challenge is to expand energy access, grow the economy, industrialise, and reduce emissions at the same time,” he said.
The REA MD said decentralised renewable energy solutions remain critical to achieving this balance.
“For many years, the energy transition was sometimes presented as a trade-off between development and climate responsibility.
“But the evidence from Nigeria’s renewable energy access experience shows the opposite.
“Clean energy can reduce emissions while improving livelihoods. It can lower the cost of production while improving reliability.
“It can serve communities that the conventional grid may not reach quickly. It can power hospit
v
