Nigeria’s Power Sector Struggles with Stranded Capacity and Financial Losses

The country has been facing significant challenges with stranded capacity and financial losses.

The Vanguard News has reported that in January and February 2024, 4,724.76MW of power capacity was left stranded, resulting in a loss of N27.14 billion for the Generation Companies (GenCos).

According to data released by the Association of Power Generation Companies (APGC), the DisCos have been unwilling to offtake available power, leading to this loss.

In January, while the available power generation capacity was 6,444.05 Megawatts, the actual average daily generation was 4,293.86MW.

This left 2,150.37MW of power stranded, resulting in a loss of N13.04 billion.

Similarly, in February, the available power generation capacity was 6,384MW, while the actual average daily generation was 3,809.96MW, leaving 2,574.39MW of capacity unutilised at a cost of N14.10 billion.

The CEO of APGC, Dr. Joy Ogaji, has raised concerns about the narrative in the public domain, stating that power generation is not the problem in the sector.

She pointed out that GenCos are being paid only 30% of their invoice, which makes it difficult for the plants to operate efficiently.

In light of these challenges, the President of Nigeria Consumer Protection Network, Mr. Kunle Olubiyo, has called for the Federal Government to resolve the issues with pre-privatisation, legacy debts, and post-privatisation era debts to gas producers and suppliers.

Nigeria’s power sector is currently facing significant challenges with stranded capacity and financial losses.

The government and relevant stakeholders must work together to address these issues and ensure a reliable and efficient power supply for the country.