The Sudanese official news agency (SUNA) carried a statement attributed to the National Electricity Corporation said that all the dam units went out simultaneously.
The commission noted that the Merowe units account for 65 per cent of generated electricity in the country adding that work is underway by engineers to restore power to the capital.
The electricity has returned to parts of the capital though some residents complained of water outages as well.
The power failure also interrupted an African Champions league match played in the Sudanese capital between the host Al-Hilal and TP Mazembe Englebert of the Democratic Republic of Congo. The stadium officials turned on alternative generators so that the game can resume.
Al-Hilal lost 5-2 to Mazembe in one of the most stunning defeats to a Sudanese team playing at home.
Some Al-Hilal fans mocked their team by saying that the power outage was done on purpose when they knew that their game is not going in their favour.
There has been growing frustration among residents in the capital for the continuation of power outages despite promises by Sudanese officials that inauguration of Merowe dam last March would guarantee no future electric cuts.
Some critics have contended that Merowe dam was prematurely inaugurated for political reasons a day before the indictment of Sudanese president Umar Hasan al-Bashir for war crimes allegedly committed in Darfur.
In the last few weeks the Sudanese Dam Execution Unit traded accusations with the energy ministry over the responsibility for power outages. The former says that the Merowe dam is producing "more than enough" electricity but the energy ministry fought back saying that the dam electricity is "unstable".
Furthermore, the National Electricity Corporation had to disconnect power from water stations for non-payment of past due bills that they say adds up to 20 million Sudanese pounds (US$8 million) which led to acute water shortages.
The move prompted intervention by the Sudanese president who reversed the decision saying that the matter is a red line and threatened that he "will cut the head of anyone who cuts electricity".
In late September Sudan riot police clashed with protestors south of the capital who blocked the Khartoum-Medani road to protest the power outage that continued for over 3 days.
The rioters attacked a local office of the National commission for electricity and burned tires before the police fired tear gas and arrested 20 of them.
The 2bn dollars dam project is supposed to double the country's electricity output producing 250 megawatts of electricity and to reach full capacity by November 2009 by producing 1250 megawatts.