Grid Collapse: Nigeria Suffers 12th Failure of 2024

December 12, 2024 EMMANUEL ADEBAYO AJIBOLA

Nigeria is currently struggling with a severe electricity crisis as gas-producing companies have decided to cease the supply of natural gas to power generation companies (GenCos). The suspension of supply stems from the non-payment of debts accumulated from previous transactions, which have now reached an alarming N2.7 trillion, which has triggered nationwide blackouts, severely affecting power generation across the country, as over 70 per cent of Nigeria’s electricity is produced by gas-fired power plants.

The Chief Executive Officer of the Association of Power Generation Companies (APGC), Dr. Joy Ogaji, confirmed the development during an exclusive interview with THE PUNCH on Wednesday. She revealed that gas suppliers have formally informed GenCos of their decision to suspend supplies due to mounting unpaid bills. This decision follows a directive reportedly issued by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which instructed gas producers to stop deliveries to indebted GenCos until further notice. However, the NMDPRA has denied issuing such a directive.

Dr. Ogaji stated that all relevant stakeholders, including the Nigerian Electricity Regulatory Commission, the Minister of Power, Adebayo Adelabu, and the Presidency, have been informed of the situation. Despite earlier efforts by the Federal Government to address the debts, including the payment of N205 billion to GenCos earlier this year, the total debt has escalated from N2 trillion to N2.7 trillion. She noted that the persistent debt issue has weakened the operations of GenCos, forcing them to remit only a fraction of their gas invoices to suppliers.

This crisis has worsened the already fragile state of Nigeria’s energy sector. On Wednesday, the national grid collapsed again, marking the twelfth grid failure this year. The collapse occurred around 2:09 pm, plunging Nigerians into darkness and stopping power generation entirely.

In separate statements, the Jos and Abuja Electricity Distribution Companies assured customers that restoration efforts were underway but noted that power supply would only normalise once the grid stabilises.

The ongoing dispute between NMDPRA and gas producers over the collection of a 0.5 per cent wholesale price levy mandated by the Petroleum Industry Act has further complicated the situation. This disagreement has led gas suppliers to demand full payment of outstanding debts before resuming supply. The APGC expressed concern over the impact of this suspension, warning that the energy sector is at risk of further operational instability.

In response to the crisis, the President of the Nigeria Consumer Protection Network, Kunle Olubiyo, called for an independent forensic audit of the debt claims by gas producers. He questioned the accuracy of the figures and urged the government to fully privatise the power sector to address inefficiencies and corruption. Olubiyo emphasised the need for financial instruments and penalties to ensure discipline within the power sector value chain. He argued that the government’s continued equity in the sector enables systemic corruption and called for a clear separation of public and private sector roles.

Meanwhile, the NMDPRA has categorically denied claims that it instructed gas suppliers to stop deliveries to GenCos. In a statement signed by its Public Affairs Unit, the Authority described the allegations as false and unfounded. The statement clarified that recent stakeholder meetings were held to discuss the implementation of wholesale supply licenses as stipulated in the Petroleum Industry Act, not to issue directives to suspend gas supplies.

The NMDPRA reassured the public of its commitment to ensuring seamless and uninterrupted supply and distribution of natural gas and petroleum products, particularly during the festive season and into 2025.

As the crisis deepens, Nigerians continue to endure prolonged blackouts and disruptions in daily activities. The situation underscores the urgent need for comprehensive reforms to stabilise the power sector and address its systemic challenges.