Nigeria’s ambition of using its vast natural gas reserves to power economic growth is under increasing threat as ageing and underperforming gas-fired power plants continue to drag electricity generation, with many facilities operating well below capacity despite decades of investment, a new report has warned.

The report, released by the Natural Resource Governance Institute and titled “Nigeria’s Gas-to-Power Ambitions: Limits, Opportunities and Alternatives,” obtained by our correspondent on Friday, argued that while natural gas has historically driven the expansion of Nigeria’s electricity supply, structural weaknesses across the power value chain have significantly diminished its ability to meet the country’s rapidly rising energy demand.

According to the report, most of Nigeria’s gas-fired power stations are now approaching or have exceeded half of their designed operational lifespan, while chronic underinvestment in maintenance has left many facilities in deteriorating condition.

The institute noted that although similar gas plants in other countries often operate for decades beyond their original lifespan through extensive refurbishment and overhauls, Nigeria’s electricity generation companies lack the financial capacity to undertake such expensive rehabilitation programmes.

It stated, “Nigeria’s fleet of gas power plants is ageing and underperforming. Most of Nigeria’s gas power plants are at least halfway through their designed lifespan. Similar plants in other countries can last one to two decades longer, but only with costly maintenance and overhauls that Nigeria’s power generation companies cannot afford.”

The report showed that Nigeria’s steam turbine plants have an average age of 44 years despite having a typical design life of between 30 and 40 years. Open-cycle plants average about 15 years against an expected lifespan of 20 to 25 years, while combined-cycle facilities average 20 years compared to a design life of between 25 and 30 years.

The institute observed that nearly three-quarters of Nigeria’s gas-fired electricity generation capacity was built during the early 2000s, when power sector reforms and privatisation attracted considerable optimism from investors.


It added that the Azura Independent Power Plant in Edo State, which reached Final Investment Decision in 2016, remains the last major gas-fired power project developed in the country. Beyond ageing infrastructure, the report highlighted worsening operational challenges affecting existing plants.

According to the institute, equipment failures, repeated system trips, collapsed cooling towers, overheating, fires, and prolonged shutdowns caused by deferred maintenance have become common features across many generating stations.

It said, “Operating conditions at most plants are difficult. System faults, failures, and trips are common, as are collapsed cooling towers, overheating, and fires. Shutdowns from deferred maintenance can last weeks, months, or even years.”

The report disclosed that in 2024, only three of Nigeria’s 21 gas-fired thermal and steam power plants generated more than half of their installed capacity. It added that most facilities operated at one-third of their capacity or less, while several remained completely idle throughout the year.

The institute identified inadequate gas supply, poor maintenance, weak commercial performance, and operational constraints as some of the major reasons for the persistent underutilisation. It particularly described the National Integrated Power Projects as among the worst-performing assets in the country’s electricity sector.

The report stated, “Arguably the worst cases are the National Integrated Power Projects, a series of large, mostly open-cycle plants built with government money in the 2000s and early 2010s. Today, most of these plants are barely running or are mothballed. Some shut down almost as soon as construction ended.”

According to the institute, the poor utilisation of existing power infrastructure raises serious questions about whether Nigeria should continue prioritising the construction of new gas-fired power plants instead of restoring the performance of facilities already in operation.

The report further warned that Nigeria’s gas-dominated electricity system has failed to bridge the country’s enormous power supply deficit despite decades of investment. It revealed that electricity generation from gas-fired plants peaked around 2016 and has steadily declined ever since.

“The national grid rarely delivers more than 4,000 megawatts at a time, the same level achieved a decade ago. This is ten times less than the city of Tokyo and eight times less than the whole of South Africa, whose population is only about one-third of Nigeria’s. Per capita electricity consumption is less than five per cent of the global average,” the report stated.

Looking ahead, the institute warned that Nigeria would struggle to achieve its electricity access targets by relying almost exclusively on gas-fired generation. It cited persistent challenges involving gas supply, inadequate transmission infrastructure, weak market liquidity, and poor payment performance across the electricity value chain as major obstacles.

The report stated, “Major systemic problems with gas supply, power transmission and payments will make it hard for Nigeria to achieve its enhanced electricity access ambitions solely through kick-starting its existing gas power plants or building new ones.”

Instead, the institute argued that renewable energy, particularly decentralised solar systems, now presents a more practical and affordable pathway for expanding electricity access.

According to the report, off-grid and small-scale solar installations have experienced rapid growth across communities, industries and households, providing electricity to millions of Nigerians who remain outside the national grid.

It said, “Off-grid and small-scale solar systems have more potential than gas to deliver affordable power to unserved Nigerians. Solar can also replace private generators, which are expensive, polluting and powered by dirty fuel.”


The institute also welcomed the decentralisation of Nigeria’s electricity market following recent constitutional and regulatory reforms that now allow states to establish and regulate their own electricity markets.

However, it warned that decentralisation would only succeed if supported by strong intergovernmental coordination, harmonised regulations and state-led investment frameworks.

“Decentralised control of Nigeria’s power sector from federal to individual states holds promise, but only if well managed. This will depend on strong coordination mechanisms, harmonised regulatory standards and state-led investment platforms to mitigate potential challenges,” it said.

Despite advocating greater renewable energy deployment, the report acknowledged that Nigeria’s clean energy sector also faces significant obstacles. It stated that the country is yet to deliver a utility-scale solar power project despite years of policy discussions and investment promotion.

The institute therefore called on policymakers to adopt more investor-friendly policies capable of accelerating renewable energy deployment alongside realistic planning for the future role of natural gas.

“The challenge now is to revise ambitions for gas power while making plans, policies and public investments that help renewables scale in more efficient, equitable ways,” the report concluded.

Nigeria generates more than 80 per cent of its grid electricity from natural gas-fired power plants, making gas the backbone of the country’s electricity sector.

Despite possessing Africa’s largest proven gas reserves of about 210 trillion cubic feet, electricity generation has remained largely stagnant for over a decade because of ageing infrastructure, inadequate gas supply, weak transmission networks, poor liquidity across the power market and persistent operational inefficiencies.

Successive administrations have promoted gas as Nigeria’s transition fuel under the Decade of Gas initiative while simultaneously encouraging renewable energy investments to expand electricity access.

In recent years, constitutional amendments have also empowered states to establish their own electricity markets, opening the door to greater private sector participation and decentralised power development.