Power generation in Nigeria experienced a significant boost on Thursday, reaching a peak of 3,624.34 megawatts, following swift intervention by the Federal Government to resolve a crisis in gas supply to power generation companies (Gencos). This surge came after a nationwide blackout caused by the 12th collapse of the national grid this year, which occurred on Wednesday afternoon.
The intervention was necessitated by a threat from gas suppliers to halt deliveries due to an unpaid debt of over N2.7 trillion owed by the Gencos.
Understanding the Grid Collapse
On Wednesday, at approximately 1:36 pm, the national grid collapsed, plunging the country into darkness. Data from the Transmission Company of Nigeria (TCN) showed that power generation dropped to 0.00MW by 2 pm. By Thursday, however, engineers successfully restored the grid, increasing power output to 2,412.89MW at 1 am, eventually reaching 3,624.34MW by 7 pm.
Gas Supply Halt and Its Implications
Gas-fired plants account for nearly 70% of Nigeria’s power generation. Consequently, any disruption in gas supply directly impacts electricity production. Wholesale gas producers had earlier suspended supplies due to mounting debts, raising concerns about widespread blackouts across the nation.
Dr Joy Ogaji, Chief Executive Officer of the Association of Power Generation Companies (APGC), confirmed the stoppage. “Gas suppliers informed our Gencos that they would no longer supply gas until outstanding debts are cleared,” Ogaji stated. She emphasised that the Nigerian Electricity Regulatory Commission (NERC), the Minister of Power, and the presidency were all aware of the crisis.
Government’s Swift Intervention
Senior officials from the Federal Ministry of Power revealed that the government quickly stepped in to address the crisis, preventing a prolonged blackout. Although details of the resolution remain undisclosed, insiders suggest that partial payment of the debts might have been made to placate gas suppliers.
“The government cannot allow gas supply to be cut off,” a source at the ministry stated. “With over 70% of power plants reliant on gas, such an action would have devastating effects on the economy.”
Earlier this year, Minister of Power Adebayo Adelabu promised that the government would begin settling its debts to Gencos and gas suppliers. He noted that prioritising foreign exchange allocations to the power sector would enhance capacity and ensure more consistent power supply.
Debt Crisis in the Power Sector
The N2.7 trillion debt stems from underpayment for electricity supplied by Gencos to the Nigerian Bulk Electricity Trading (NBET) company. This has created a ripple effect, limiting Gencos’ ability to settle invoices from gas suppliers.
Gencos reportedly receive as little as 9% of their gas invoices from NBET, forcing them to operate under severe financial constraints. “We are all sharing in the poverty that NBET is giving us,” Dr Ogaji lamented.
Long-Term Solutions and Outlook
The recent grid collapse highlights the need for structural reforms in Nigeria’s power sector. Experts have called for the following measures to address recurring challenges:
- Debt Clearance: A structured repayment plan for the N2.7 trillion owed to gas suppliers and Gencos.
- Privatisation of the National Grid: Allowing private sector participation could improve grid stability and efficiency.
- Diversification of Energy Sources: Increasing investment in renewable energy, such as solar and wind, to reduce reliance on gas-fired plants.
- Regulatory Reforms: Strengthening the capacity of NERC to ensure timely payments and prevent disruptions in gas supply.
The Federal Government’s intervention has temporarily stabilised power generation, but stakeholders warn that long-term solutions are critical to avoid future crises. With Nigeria generating an average of 4,500MW, far below its energy needs, experts believe that sustainable reforms could unlock the potential for improved electricity supply.
For now, the restoration of over 3,500MW brings temporary relief, but the road to consistent and reliable power remains long and challenging.