Nigeria’s Power Generation Drops In Q3 2025 As DisCos Reduce Grid Electricity Offtake

Nigeria’s electricity generation continued to weaken during the third quarter of 2025, with power output declining as distribution companies and other grid-connected customers reduced their purchase of electricity. This slowdown highlights the ongoing structural and financial challenges facing the country’s power sector, despite years of reforms and investment efforts.

According to data released by the Nigerian Electricity Regulatory Commission, power generation dropped in the third quarter as distribution companies, commonly known as DisCos, cut back on the amount of electricity they took from the national grid. When DisCos reduce their offtake, generation companies are forced to scale down production, even when plants are technically capable of generating more power.

Industry experts say the weak demand from DisCos reflects deeper problems in the distribution segment. Many DisCos struggle to collect payments from customers, especially in areas with poor metering and billing systems. Electricity theft, energy losses from outdated networks, and unpaid bills continue to reduce their revenue. As a result, DisCos often lack the funds needed to pay generation companies on time, making them cautious about buying more electricity from the grid.

Nigeria’s power sector also continues to operate far below its installed capacity. Although the country has over 13,000 megawatts of installed generation capacity, the actual electricity available to consumers is much lower. During the third quarter, more than 60 percent of power plants were either unavailable or idle, according to regulatory data. This points to persistent operational and infrastructure challenges across the value chain.

Gas supply shortages remain a major constraint, as most of Nigeria’s power plants rely on natural gas to operate. Limited gas availability, pipeline issues, and payment disputes with gas suppliers often force plants to reduce output or shut down entirely. In addition, frequent network outages and weak transmission infrastructure make it difficult to move generated power efficiently to where it is needed.

The regulator’s report showed that only a few DisCos met their minimum offtake requirements during the quarter, while most fell short. Lower electricity purchases reduce revenue for generation companies, making it harder for them to cover costs, maintain facilities, or invest in upgrades. Over time, this can discourage new investment and further weaken the sector.

Despite government efforts to reform the electricity market and improve private sector participation, the gap between installed capacity and actual power delivered remains wide. For households and businesses, this continues to mean unreliable electricity supply and frequent blackouts. Analysts say real improvement will depend on fixing distribution inefficiencies, ensuring a stable gas supply, and improving the overall financial health of Nigeria’s power industry.