By By Elizabeth Ugbo
Nigeria loses about N40 trillion annually to electricity shortages, according to the Nigerian Independent System Operator (NISO). The agency revealed this in its latest industry report released in 2026. It explained that persistent grid inefficiencies, gas shortages, and weak infrastructure drive the losses. Businesses, households, and manufacturers bear the cost nationwide. NISO urged urgent reforms to stabilise supply and boost economic growth.
Scale of Losses and Economic Impact
NISO estimates annual losses at $29 billion, about N40.1 trillion at current exchange rates.
Power outages force businesses to rely on generators. As a result, operating costs rise sharply.
Moreover, unreliable electricity slows industrial growth. It also limits job creation and reduces productivity.
NISO stressed that stable power directly supports economic expansion. Therefore, fixing the grid remains critical.
Gap Between Power Generation and Supply
Nigeria generates between 45,000MW and 50,000MW daily. However, only about 5,000MW reaches the grid.
This means just 10 percent of generated power gets delivered to users.
According to NISO, several bottlenecks cause this gap:
- Weak transmission infrastructure
- Limited distribution capacity
- Frequent gas supply disruptions
Consequently, much of the generated electricity remains underutilised.
Recent Progress in the Power Sector
Despite the crisis, the sector has recorded some improvements.
NISO highlighted key milestones:
- Peak generation reached 5,802MW in March 2025
- Daily energy delivery hit 129,370MWh
- The grid recorded 421 days without collapse between 2022 and 2023
In addition, authorities commissioned 82 transformers between 2024 and 2025. These added over 8,500MVA capacity.
More than 30 transmission projects were also completed. As a result, wheeling capacity increased to 8,700MW.
Grid Digitalisation and Infrastructure Upgrade
NISO continues to modernise the grid through the SCADA/EMS programme.
The project has a $1.16 billion investment backing it.
So far:
- Over 3,000km of fibre optic cables have been deployed
- More than 100 substations now have modern monitoring systems
- Project completion stands at 69 percent
This upgrade will improve real-time monitoring and decision-making. Ultimately, it should enhance grid stability.
Gas Shortages Worsen Power Supply
Electricity supply has declined in recent months due to gas shortages.
Data from the Transmission Company of Nigeria (TCN) shows only 2,908MW was distributed on March 25, 2026.
Generation has also dropped below 4,000MW consistently.
The Minister of Power, Adebayo Adelabu, explained the situation clearly. He noted that 75 percent of gas-fired plants face supply issues.
He added that only two out of 32 plants have firm gas contracts. Others depend on unstable supply.
Therefore, even efficient turbines cannot operate without fuel.
Key Reforms Proposed by NISO
To address the crisis, NISO recommended several reforms:
- Enforce strict grid code compliance
- Strengthen system dispatch operations
- Improve transparency and accountability
- Expand transmission infrastructure
- Digitalise the national grid fully
- Diversify Nigeria’s energy mix
These steps aim to improve efficiency across the value chain.
Urgency of Power Sector Reforms
NISO warned that Nigeria’s economic future depends on reliable electricity.
A stable grid will:
- Boost industrial productivity
- Support businesses
- Create jobs
- Drive economic growth
Therefore, stakeholders must act quickly to close the gap between generation and delivery.
Conclusion
Nigeria’s power crisis continues to drain trillions yearly. However, recent progress shows improvement is possible.
With strong reforms and better gas supply, the country can unlock its full economic potential.
