Nigeria’s electricity Generation Companies (Gencos) reportedly lost an estimated N2.28 trillion in capacity payments between 2015 and 2025, as a significant portion of installed power capacity remained stranded, exposing deep inefficiencies in the country’s power value chain.
Capacity loss, according to experts, occurs when electricity generation potential exists but cannot be utilised or monetised because the power system is unable to evacuate it. While many Gencos are technically capable of producing far more electricity, operational constraints outside their control prevent full utilisation of available plants.
Data from the Association of Power Generation Companies (APGC) revealed that at its peak, stranded power reached 54.38 per cent, meaning more than half of Nigeria’s available generation capacity could not be tapped.
Although the country steadily increased its installed and available generation capacity over the past decade, the system’s ability to evacuate and distribute power failed to match the growth. Transmission bottlenecks, grid instability, and weak downstream demand absorption have left generation companies with plants that are ready but underutilised, preventing the sector from achieving its full potential.
Experts warn that addressing these inefficiencies is critical for Nigeria to improve electricity supply, reduce losses, and enhance returns on massive investments in generation infrastructure.
