The International Energy Agency (IEA) has highlighted the persistent energy crisis in Nigeria, attributing frequent power outages to recurring grid collapses and gas shortages. These challenges have severely impacted the nation’s power supply, hindering economic growth and daily life.
This assessment is part of the IEA’s comprehensive global report titled Electricity 2025: Analysis and Forecast to 2027. The 200-page report examines energy issues across the African region, including countries such as Algeria, Angola, Benin, Botswana, Cameroon, Congo, Democratic Republic of the Congo, Côte d’Ivoire, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gabon, Ghana, Kenya, Libya, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Senegal, South Africa, South Sudan, Sudan, United Republic of Tanzania, Togo, Tunisia, Zambia, Zimbabwe, and other African countries and territories.
The report delves into the full spectrum of energy issues, including oil, gas, and coal supply and demand, renewable energy technologies, electricity markets, energy efficiency, access to energy, demand-side management, and much more. Through its work, the IEA advocates policies that enhance the reliability, affordability, and sustainability of energy in its 32 Member countries, 13 Association countries, and beyond.
In its analysis of the Energy Sector in Nigeria, the report examined the collapse of the national grip on 7 November 2024; major cities in Nigeria, including Abuja, Lagos, and Kano, suffered blackouts as the country’s national grid collapsed. According to the Transmission Company of Nigeria (TCN), the blackout was due to a sudden rise in frequency from 50.33 Hz to 51.44 Hz because of a malfunction in one of TCN’s substations, which led to “a series of lines and generators tripping that caused instability of the grid and, consequently, the partial disturbance of the system.” This blackout was the second time in the week of 7 November and marked the tenth outage that affected the whole power system in 2024, with system failure being the main reason for the outages.
The National Bureau of Statistics (NBS) of Nigeria indicated recently that on average, a Nigerian household experiences electricity blackouts 6.7 times per week, with each outage lasting 12 hours. Reports have attributed the frequent outages in Nigeria to deteriorating power infrastructure, vandalism, and inadequate gas supply for its gas-fired generating units, which account for over 75% of the country’s power output. Among the potential causes, the mismatch between Nigeria’s generation capacity and distribution capacity is seen as the foremost issue leading to grid collapses. Despite Nigeria’s total installed capacity of 13,610 MW and transmission capacity of over 8,100 MW, the country’s distribution companies (DisCos) only have a distribution capacity of around 4,000 MW, which could lead to overloading that significantly affects the grid. According to the National Orientation Agency (NOA) of Nigeria, “On 2 September, a peak generation of 5,313 MW was recorded, the highest in three years, but the DisCos rejected close to 1,400 MW due to their systems’ fragility.”
Supply Issues and Growth of Distributed Solar PV: Supply issues have continued to constrain gas-fired generation, while distributed solar PV in rural areas has seen robust growth. An estimated 70% of Nigerians had access to electricity in 2023, up from 50% a decade ago. However, the gap between rural and urban areas remains stark: nearly 95% of residents in cities have access to electricity, compared to only 40% in rural areas. Electricity demand declined by around 6% in 2024, but it is forecasted to increase on average by more than 5% annually between 2025 and 2027. Following the start of the Zungeru hydroelectric plant in April 2024, Nigeria now counts 28 grid-connected power plants, which increased the country’s total installed capacity to 14 GW, compared to 12.6 GW in 2023. However, this growth in installed capacity did not suffice to compensate for the decrease in available capacity. In the first half of 2024, the average daily available capacity was 4.14 GW, slightly lower than the 4.54 GW recorded in 2023.
One factor explaining this discrepancy is the worsening of gas supply constraints, which have significantly impacted the operational performance of gas-fired plants. In 2024, gas accounted for 77% of the country’s electricity generation, and it is expected to continue holding the majority share in the electricity mix with an estimated 2.4% annual growth in 2025-2027. Yet, lingering gas shortages remain a critical bottleneck. Renewables, mostly hydropower, account for the remaining on-grid generation, but solar PV is surging across the country, particularly as a distributed generation solution in rural areas.
Financial Challenges and Government Interventions: Electricity tariffs in Nigeria remain below cost-reflective levels, making it difficult for power companies to cover production costs. This has led to the accumulation of significant debts owed to gas producers, resulting in reduced gas supply to electricity generation companies. In March 2024, the Nigerian government intervened by partially settling these debts to ease tensions and stabilize gas supply. In the first half of 2024, several gas-fired plants saw their plant availability factor drop to under 5% due to limited gas supply. The consequent decrease in electricity output forced Nigerian power distribution companies to ration electricity supplies in some areas. In the second half of 2024, grid collapses became more common, with a significant increase in the total number for 2024 compared to three recorded in 2023 and six in 2022. Contributing factors include gas shortages, vandalism, and aging infrastructure.
Infrastructure Enhancements and Renewable Energy Projects: The Minister of Power commissioned five transformer installation projects under the Presidential Power Initiative, which are expected to enhance transmission wheeling capacity by 272 MW. The Rural Electrification Agency (REA) signed five MoUs with private developers for decentralized renewable energy (DRE) projects, including mini-grids and industrial power solutions, totaling 1.26 GW to boost rural access. Additionally, the REA signed an MoU with Husk Power to deploy 250 MW of DRE projects in rural and peri-urban areas. Nigerian company Geregu Power also signed an MoU with Siemens Energy to expand the capacity of its Geregu gas power plant to 1.2 GW.
Power Sector Reforms: The Nigerian gas and power sectors have undergone various reforms in recent months, notably following the adoption of the Electricity Act 2023. With the aim of decentralizing power generation and distribution, the Act empowered states to establish legislation to create local markets for the generation and transmission of power to all areas within their boundaries. In 2024, several states exercised this new power by issuing orders to formally transfer regulatory oversight of their electricity markets from the Nigerian Electricity Regulatory Commission (NERC) to state-level regulatory bodies. The NERC also issued an order to establish an Independent System Operator for Nigeria. This new entity will take over all market and system operation contracts and obligations previously managed by the Transmission Company of Nigeria (TCN). If effectively implemented, this reform could mark a significant step forward in Nigeria’s electricity sector liberalization.
Building on these provisions, Lagos State is taking a major step forward by seeking to establish a distinct Lagos Electricity Market designed to operate independently of the national grid. The Lagos State Electricity Bill 2024 aims to set up a comprehensive framework for a sustainable and competitive electricity landscape in the state, with a particular emphasis on enhancing infrastructure, promoting renewable energy adoption, and ensuring consumer protection.
Recent Reforms and Tariff Adjustments: Other recent reforms include an 11% increase in the domestic base price for natural gas for power generation companies and an electricity tariff hike for Band A customers (highest tariff category), who are guaranteed 20 hours of electricity daily. This price adjustment reflects the government’s effort to reduce reliance on state subsidies for electricity, particularly for higher-paying customer categories. This new initiative aims to address the estimated NGN 2.9 trillion (Nigerian naira) electricity subsidy in the 2024 fiscal year. The government plans to transition the entire power sector to a single, cost-reflective tariff band within the next three years.
In her comment on this report, Sherisse Alexander, Chief Business Officer at WATT Renewable Corporation, said, “The IEA’s Electricity 2025 report reinforces what millions of Nigerians already know – grid instability remains a daily challenge. Households endure around 6.7 blackouts per week, with each lasting an average of 12 hours. While grid reforms are underway, businesses and communities cannot afford to wait. Hybrid solar-storage solutions are already delivering reliable, cost-effective power, reducing dependence on an unstable grid and expensive diesel. Scaling up investment in decentralised energy will be key to securing Nigeria’s energy future.”
As it is anticipated that many people will embrace solar energy in the coming years, Nigeria’s power sector remains in crisis, with frequent grid collapses, gas shortages, and infrastructure deficiencies impeding progress. While recent reforms and renewable energy investments offer hope, sustainable solutions require immediate action, regulatory consistency, and financial stability. Without decisive measures, the country’s electricity challenges will continue to hinder economic growth and quality of life for millions of Nigerians.
