Part II: Why 862 MW of Available Capacity Was Not Dispatched
In Part I, we examined the first major gap in Nigeria’s grid-connected electricity system: the difference between 13,625 megawatts (MW) of installed capacity and the roughly 5,174 MW available on average. Of the 28 power stations, eleven were Critical, nine Poor, four Moderate and only four Strong.
Today, we continue the investigation using Nigerian Electricity Regulatory Commission (NERC) data covering April 2025 to March 2026.
Available Capacity versus Actual Generation
Using our illustration in Part I, a 500 MW station may have only 200 MW capable of operating because of turbine failure, maintenance or inadequate gas, giving an availability factor of 40%. But if only 100 MW of the available 200 MW is dispatched, the dispatch rate is 50%. Average generation is then only 20% of the original 500 MW installed capacity. Installed capacity, available capacity and actual generation are therefore three different things.
NERC defines generation load factor—also called the dispatch rate—as the proportion of available capacity actually utilised. Dispatch depends on plant availability, grid offtake and the plant’s competitiveness under economic merit order.
Across the twelve months, my day-weighted calculation shows that Nigeria had about 5,174 MW available on average but generated only about 4,312 MW on average. Roughly 862 MW of available capacity was therefore not dispatched, giving a twelve-month dispatch rate of about 83.3%. Average generation was only about 31.6% of installed capacity. Put differently, for every 100 MW Nigeria had installed, about 38 MW was available and only about 32 MW was actually generated on average.
The undispatched gap averaged about 895 MW in Q2 2025, widened sharply to 1,251 MW in Q3, narrowed to about 948 MW in Q4 and fell to roughly 345 MW in Q1 2026. Corresponding dispatch rates were 83.42%, 76.96%, 82.45% and 92.26%.
But Q1’s higher dispatch rate did not mean Nigeria generated more electricity. Available capacity had fallen so sharply that the system was simply using a larger proportion of a smaller pool.
Not every available megawatt should necessarily be dispatched. Grid stability, reserves, economic merit order and contractual constraints can legitimately keep some capacity unused. The question is how much of Nigeria’s non-dispatch was prudent system operation—and how much resulted from avoidable constraints.
Why Does Available Capacity Go Unused?
The Nigerian Independent System Operator (NISO) schedules and dispatches generation while maintaining system balance. It cannot simply instruct every available station to run at maximum output: supply and demand must remain continuously balanced. Economic merit order means lower-cost generation should ordinarily be dispatched first, subject to technical and contractual requirements.
But how much available electricity failed to become generation because the downstream system could not—or would not—take it, even while factories, farms and families needed more electricity?
The Distribution Offtake Problem
Under the Partial Activation of Contract regime, each Distribution Company (DisCo) is assigned a Partially Contracted Capacity (PCC)—essentially its contracted allocation of available grid power. NERC requires DisCos to take at least 95% of their available PCC and says that, given Nigeria’s huge unmet demand, they should ordinarily take 100%.
Yet aggregate DisCo offtake performance was 91.78% in Q2 2025, 87.39% in Q3, 92.18% in Q4 and 97.11% in Q1 2026. The twelve-month average was about 92%. In Q3, only Benin and Port Harcourt DisCos met the 95% threshold; Kaduna recorded just 75.23%.
Why would a country with enormous unmet electricity demand fail to take electricity already available to its distributors?
NERC offered three explanations for weak Q3 performance: fragile distribution infrastructure and rainy-season network outages; lower seasonal demand; and, most troubling, DisCos limiting energy allocation to feeders where they suffer high operational losses, irrespective of undispatched capacity available on the grid.
That is an extraordinary systems failure. In plain terms, electricity can be available and consumers can want it, yet a DisCo may still limit supply to a feeder because delivering electricity there would expose it to high operational losses.
NERC also says DisCos that fail to offtake available PCC still incur wholesale costs for the unutilised capacity, and those additional costs cannot be recovered from customers through the tariff. A physical failure to offtake electricity therefore becomes an additional commercial cost to the DisCo.
Even Cheap Hydropower Was Sometimes Under-Dispatched
NERC’s Mandatory Dispatch of Hydropower Plants Order requires priority dispatch of hydropower because it is among Nigeria’s cheapest sources of grid electricity.
Yet in Q2 2025, Shiroro, Jebba and Zungeru recorded dispatch rates of only 74.79%, 74.42% and 70.47% respectively. In Q3, Jebba and Shiroro recorded 72.35% and 64.58%; in Q4, 75.39% and 73.66%. NERC described these rates as inconsistent with its Mandatory Dispatch of Hydropower Plants Order. By Q1 2026, Jebba and Shiroro had improved to 95.77% and 90.74%, while Kainji recorded 97.90%.
Why were some of Nigeria’s cheapest available megawatts not being fully utilised?
Zungeru presents a different regulatory wrinkle. Although NERC described its 70.47% Q2 dispatch rate as inconsistent with the hydro-dispatch order, it treated its even lower Q3 and Q4 rates—46.26% and 62.88%—as consistent with the plant’s contractual arrangements, citing an interim sales agreement for up to 450 MW.
Commercial arrangements can therefore limit how much physically available capacity becomes dispatched electricity.
Transmission Is Another Filter
Transmission constraint and transmission loss are different problems. A constraint can prevent available generation from being dispatched because the network cannot safely evacuate additional output. A transmission loss occurs after electricity has already been generated and injected into the network.
NERC’s quarterly transmission loss factors ranged from 7.19% to 8.58%, averaging about 7.75% over the twelve months. In practical terms, roughly eight out of every 100 units sent into the transmission system were either lost within the network or consumed at transmission substations rather than delivered to DisCos or international customers. The roughly 862 MW of available capacity not dispatched should therefore not be described as transmission loss: those megawatts were never generated.
Recommendations
The Generation Recovery Register proposed in Part I should be expanded to show, for every grid-connected station, available MW, scheduled MW, dispatched MW, dispatch rate and the reason for material non-dispatch—whether transmission, distribution, contractual, economic or another constraint.
NISO should publicly explain significant departures from economic merit order and mandatory hydro dispatch, particularly where available low-cost generation remains unused. NERC should enforce DisCo offtake requirements. Where a DisCo repeatedly under-offtakes because of weak networks or high-loss feeders, the constraint should be publicly identified, quantified and tied to a remediation plan.
NERC’s 2025 mandate to integrate generating units into the national SCADA/EMS system provides a technological foundation for such accountability.
Conclusion
Nigeria’s electricity problem is therefore not simply a shortage of installed capacity. Part I showed that of 13,625 MW installed, only about 5,174 MW was available because of equipment, maintenance, gas-supply and other operational constraints. Part II shows that only about 4,312 MW was actually generated, leaving roughly 862 MW of available capacity undispatched for a combination of legitimate system-operating reasons and operational, distribution, transmission, economic and contractual constraints.
Put differently, only about 38 MW of every 100 MW installed was available, and only about 32 MW was actually generated. Yet Nigeria’s electricity demand is commonly estimated at more than 30,000 MW, meaning average grid generation met less than 15% of the demand during the period. The gap is enormous—but so too is the opportunity to recover existing capacity, improve utilisation and expand Nigeria’s power system.
That takes us to Part III. Once electricity reaches the distribution companies, how much of it can they account for, bill to customers and ultimately collect in cash?