Nigerian Gencos lose N110.56 billion to stranded capacity in H1 2026

Nigeria's power generation companies (Gencos) incurred substantial financial losses, totaling an estimated N110.56 billion in capacity payments during the first six months of 2026. This significant deficit stems from an average of 3,124.50MW of electricity generation capacity remaining unused each month, a situation Gencos attribute to various system constraints.

Data released by the Association of Power Generation Companies (APGC) indicates that while Gencos had an average available generation capacity of 7,260MW between January and June, only 4,581.5MW was declared available for actual generation. The average actual generation stood at 4,196.83MW. This discrepancy means that over 42% of the available capacity was left idle, representing a significant loss of potential revenue for the companies.

Stranded generation capacity, defined as technically available power that cannot be utilized due to insufficient grid demand, transmission or distribution limitations, or other system restrictions, has been a persistent issue. The APGC data shows this stranded capacity averaged 3,124.50MW monthly, representing about 43% of the average available capacity and 68.2% of the declared capacity during the period.

Analysis of monthly figures reveals a fluctuating but consistently high level of stranded capacity. March recorded the most severe impact, with 3,650MW stranded, leading to a monthly capacity payment loss of N22.13 billion, approximately 20% of the total six-month loss. Gencos have long voiced concerns over these losses, highlighting that they incur fixed and operational costs regardless of whether the grid utilizes their generated power, while still bearing the expenses of plant maintenance and investment servicing.