Twenty companies have obtained permits to generate their own electricity, signaling a growing shift toward self-sufficiency in Nigeria’s power sector. The Nigerian Electricity Regulatory Commission (NERC) disclosed that these firms were granted captive power licenses in the third quarter of 2025, allowing them to produce a total of 5.85 megawatts for internal consumption.
According to NERC’s latest quarterly report, the move reflects rising frustration with the national grid, which continues to struggle with unreliable supply. Companies seeking to operate captive plants above 1MW are required to obtain permits to ensure electricity is used solely for their own operations, without resale.
“The approvals for self-generation are on the rise as industries seek stable power amid grid challenges,” the regulator said.
The report highlighted that grid-connected electricity generation averaged 4,179 megawatt-hours per hour in Q3, constrained by gas shortages that cut production by 602 gigawatt-hours.
Meanwhile, off-grid and captive power capacities nationwide now exceed grid levels, demonstrating the sector’s increasing reliance on private solutions.
Despite these challenges, distribution companies (DisCos) saw modest gains, collecting N570.25 billion of N706.61 billion billed, an 80.7 per cent efficiency rate.
However, frequent outages persist, and bilateral agreements show firms bypassing the grid entirely, with $7.12 million and N3.19 billion earned directly from customers in international and domestic deals, respectively.
NERC also warned that delayed payments from large customers like Ajaokuta, which owes N1.03 billion to the Nigerian Bulk Electricity Trading Plc (NBET), threaten market stability.
The surge in captive power projects now adds 1,045MW to Nigeria’s off-grid capacity, reinforcing a trend toward energy independence. NERC stressed the need for government intervention to address infrastructure deficits and outstanding debts, while noting that federal subsidies remain a crucial support for the sector.
The commission reported that government interventions accounted for 58.63 per cent of GenCos’ invoices, with N458.75 billion paid in the quarter down slightly from the previous three months due to lower consumption and minor reductions in generation costs. Meanwhile, DisCos improved billing efficiency to 82.69 per cent, though cumulative billing losses still stood at N147.92 billion.
NERC concluded that while revenue collection shows improvement, resolving upstream market obligations and addressing supply challenges are essential for stabilizing the power sector.
