Nigeria’s Power Crisis: DisCos Ration Supply Amid 16,000MW Deficit

Nigeria is currently experiencing a power generation deficit of almost 16,000 megawatts (MW), despite having issued generation licenses to 40 Generation Companies (GenCos).

According to data sourced from the Independent System Operator, the country requires a minimum of 19,798MW to reach sufficiency, but as of February 19, 2024, only 3,860.3MW is being generated by 16 out of 40 GenCos.

This power crisis has forced Distribution Companies (DisCos) to resort to rationing, leaving millions of Nigerians without adequate electricity.

The situation has been exacerbated by the recent systems collapse and low gas supply to power plants, which has led gas producers to cite a debt of over $1.3 billion for past supplies.

Despite the government’s commitment to pay electricity subsidies of N1.6 trillion in 2024, only N450 billion was provided for in the budget, further straining the Nigerian Electricity Supply Industry (NESI).

To boost power generation, the Nigerian Electricity Regulatory Commission (NERC) recently licensed 11 new GenCos, bringing the total connected to the national grid to 40.

However, the combined capacity of the previous 29 GenCos was only 13,461MW, and they could not generate up to 5,000MW.

DisCos have informed consumers that the rationing is due to low allocation, and they are working with stakeholders to find a sustainable resolution.

The Power Minister, Adebayo Adelabu, has acknowledged the issue and cited gas shortages, poor collections, and inadequate funding of government subsidies as contributing factors.

Experts believe that Nigeria requires at least 30,000MW to reach electricity sufficiency.

The power woes have persisted despite recent calls for the resignation of the Power Minister and the government’s efforts to address the liquidity challenges facing the industry.

Nigeria’s power crisis is a multifaceted issue that requires urgent attention and innovative solutions.

Addressing the gas supply shortage, improving collections, and ensuring proper funding of government subsidies are essential steps towards resolving the power generation