Nigeria power output stalls at 4,300MW amid gas supply shortages

Nigeria power output stalls at 4,300MW amid gas supply shortages

Nigeria's electricity generation is currently constrained by severe gas supply shortages and deteriorating infrastructure, leaving the national grid struggling to exceed 4,000 megawatts. On February 27, the Nigeria’s Independent System Operator (NISO) reported that average available electricity generation stands at approximately 4,300 megawatts.

The shortfall is driven by a massive gap between the fuel requirements of thermal power plants and actual delivery. According to NISO operational data, thermal plants require about 1,629.75 million standard cubic feet of gas per day to operate at full capacity. However, as of February 23, 2026, the actual supply was only 692 million cubic feet per day, representing less than 43% of the estimated demand.

This supply deficit has forced load shedding to maintain grid stability and reduced the electricity allocated to distribution companies. These failures persist despite Nigeria possessing proven gas reserves estimated at more than 209 trillion cubic feet, with some estimates placing the figure at about 210 trillion cubic feet.

Ageing Infrastructure and Operational Decay

A report by the Natural Resource Governance Institute (NRGI), titled Nigeria’s Gas-to-Power Ambitions: Limits, Opportunities and Alternatives, warns that the country's ambition to power economic growth through gas is under threat from ageing plants. The report notes that most gas-fired power stations have reached or exceeded half of their designed operational lifespans.

The decay is evident across different plant types:

• Steam turbine plants: Average age of 44 years, exceeding a typical design life of 30 to 40 years.
• Open-cycle plants: Average age of about 15 years against an expected lifespan of 20 to 25 years.
• Combined-cycle facilities: Average age of 20 years compared to a design life of 25 to 30 years.

The NRGI report highlights that nearly three-quarters of the gas-fired capacity was built in the early 2000s. It identifies the National Integrated Power Projects as some of the worst-performing assets, stating that many are either barely running or mothballed, with some shutting down almost immediately after construction.

Operational failures are frequent, including overheating, fires, collapsed cooling towers, and system trips. In 2024, only three of the 21 gas-fired thermal and steam power plants generated more than half of their installed capacity, while many others operated at one-third capacity or remained completely idle.

Financial Hurdles and Investment Stalls

While plants in other nations often extend their lifespan through refurbishment, Nigerian generation companies lack the financial capacity for such overhauls. This liquidity crisis is eroding investor confidence. Aaron Sayne, Lead of Sustainable Energy Supply at NRGI, stated that investment would remain elusive unless underlying commercial and operational challenges are addressed. He cited poor transmission infrastructure, inadequate gas supply, and persistent liquidity problems as the primary barriers.

The last major gas-fired power project to reach a Final Investment Decision was the Azura Independent Power Plant in Edo State in 2016. Stakeholders suggest that Nigeria may struggle to attract new Final Investment Decisions for large plants until structural issues are resolved.

To combat these financial instabilities, the federal government is attempting to clear payment arrears owed to generation companies from 2015 to 2025. In late January, authorities announced a first bond issuance of 501 billion naira ($368.5 million) under the Presidential Power Sector Debt Reduction Programme.

Alternative Energy and Future Outlook

The NRGI argues that relying exclusively on gas-fired generation is insufficient to meet electricity access targets. The report suggests that decentralized solar systems provide a more practical and affordable pathway, noting that small-scale solar has already grown rapidly in areas outside the national grid.

Jummai Vandu, speaking for the National Council on Climate Change (NCCC), affirmed Nigeria's commitment to achieving net-zero emissions by 2060. This involves implementing the Climate Change Act 2021 and balancing renewable expansion with a responsible transition of natural gas resources.

Recent constitutional and regulatory reforms now allow states to establish and regulate their own electricity markets, potentially decentralizing the sector. However, the NRGI warns this will only succeed with harmonized regulations and strong intergovernmental coordination.

Looking ahead, a significant infrastructure project may provide relief. The 614-kilometer Ajaokuta–Kaduna–Kano (AKK) gas pipeline, valued at $2.8 billion, is scheduled to begin operations in July 2026, intending to connect southern gas fields to demand centers in northern and central Nigeria.