Nigeria’s electricity crisis could persist as mounting debts, inadequate investment in gas production and weak infrastructure continue to undermine power generation and distribution, industry stakeholders have warned.

They say the failure to establish a reliable payment system for gas suppliers is affecting electricity generation, while inadequate transmission infrastructure and poor commercial arrangements are worsening the situation.

The concerns were raised at the sixth annual conference of the Power Correspondents Association of Nigeria in Abuja, where stakeholders discussed challenges threatening the country’s ambition of building a $1tn economy by 2030 through reliable and affordable electricity.

The warning comes amid recent power supply disruptions across Nigeria. On November 5, the Nigerian Independent System Operator attributed a decline in national grid generation to inadequate gas supply to thermal power plants and reduced water inflows into hydroelectric reservoirs.

The development resulted in shorter electricity supply hours and increased load shedding across the country.

However, the Nigerian National Petroleum Company Limited maintained that its gas transportation network remained available, arguing that gas production, commercial supply arrangements and actual deliveries to power plants must be examined separately.

Speaking at the conference, the General Manager of Gas Commercial at the Nigerian National Petroleum Development Company, Bashiru Adoke, said the crisis could be addressed but would require sustained investment and a dependable payment mechanism.

He identified the inability of electricity market operators to pay gas suppliers as one of the major obstacles to stable power generation.

According to him, generating companies receive insufficient payments for the electricity they produce, making it difficult for them to settle gas invoices.

Adoke explained that gas accounts for between 60 and 75 per cent of electricity production costs, while payments for energy generated cover only about 40 per cent of the invoices.

He disclosed that the power market currently owes more than N630bn for electricity generated and consumed by Nigerians, warning that the situation could worsen without a sustainable payment arrangement.

“There is no robust mechanism for payment of gas supply, because the proceeds from the market is not even enough to pay for gas supply,” he said.

He further cautioned that periodic government interventions to settle outstanding debts would not resolve the problem if new liabilities continued to accumulate.

According to him, although the government’s intervention covers legacy debts incurred between 2015 and 2025, outstanding obligations from 2025 onwards are already building up.

Adoke also called for increased investment in non-associated gas, explaining that depending heavily on gas produced alongside crude oil could expose electricity generation to disruptions in oil production.

Although the government has introduced incentives through executive orders to attract investment into gas projects, he said more capital was needed to improve supply.

He also expressed concern that high electricity tariffs could push consumers towards solar power and other forms of self-generation, potentially weakening the national grid.

Meanwhile, the General Manager of Engineering at the Transmission Company of Nigeria, Mojeed Akintola, identified inadequate power generation as a major constraint to the transmission network.

He explained that the TCN could only transmit the electricity produced by generating companies, adding that the company was expanding its capacity through the installation of new transformers and transmission lines.

However, he identified right-of-way disputes and vandalism as major challenges delaying the completion of transmission projects.

ID