Nigeria’s electricity transmission losses cost the power sector an estimated ₦2.61bn in the first quarter of 2026 after the Transmission Company of Nigeria failed to meet the transmission loss target set by the Nigerian Electricity Regulatory Commission.

According to the commission’s first-quarter 2026 report, the Transmission Loss Factor exceeded the regulatory benchmark, indicating that a portion of electricity generated by power plants was lost before it could be delivered to electricity distribution companies or other off-takers.

The Transmission Loss Factor measures the percentage of total electricity generated that is either lost while being transmitted across the national grid or consumed at transmission stations, leaving it unavailable for delivery to distribution companies or export to international customers.

The Nigerian Electricity Regulatory Commission said the Transmission Loss Factor has an inverse relationship with the efficiency of the transmission network, explaining that a decline in the TLF reflects improved transmission efficiency over a given period.

The report showed that the estimated ₦2.61bn loss comprised ₦257.91m arising from transmission loss factor losses and ₦2.35bn in penalties payable to power generation companies.

It added that the estimate excluded any service level agreement penalties the Transmission Company of Nigeria may have incurred for failing to deliver the required electricity to distribution companies.

According to the Nigerian Electricity Regulatory Commission, the estimated loss was lower than the ₦3.13bn recorded in the fourth quarter of 2025. The report also showed that the average Transmission Loss Factor during the first quarter of 2026 stood at 7.96 per cent, exceeding the 7.00 per cent target set under the Multi-Year Tariff Order.

The commission said, “The average TLF in 2026/Q1 was 7.96 per cent. A TLF of 7.96 per cent indicates that for every 100 megawatt-hours of energy injected into the grid, 7.96MWh of energy is undelivered to DisCos and international customers, due to losses in the transmission network or consumption at the transmission substations.”

NERC noted that the performance worsened compared with the previous quarter. It said, “The TLF recorded in 2026/Q1 represents a 0.69 percentage point increase relative to the 7.27 per cent recorded in 2025/Q4.”

The Nigerian Electricity Regulatory Commission said the Transmission Company of Nigeria also failed to meet the transmission loss benchmark prescribed under the tariff framework.

According to the report, “According to the report, “The 7.96 per cent TLF recorded in 2026/Q1 represents an underperformance of 0.96 percentage points relative to the MYTO target for 2026 (7.00 per cent).”

The commission explained that exceeding the approved transmission loss threshold carries financial consequences, as the excess losses cannot be passed on to electricity consumers for recovery.

“Exceeding the TLF target means the TSP will not be able to meet its full revenue requirement, as there is no provision to recover the revenue needed to cover the excess (inefficient) losses from customers,” the regulator stated.

Giving the financial impact of the losses, the regulator said, “TLF underperformance has additional costs for the TSP because it has to pay GenCos for the energy that is not billable to DisCos and other off-takers. The estimated cost of the 0.96pp TLF underperformance during the quarter is N2.61bn.”

The report also showed that the stability of the national grid weakened during the first quarter, with an increase in system frequency fluctuations, a development that could adversely affect power quality, particularly for industrial consumers.

The Nigerian Electricity Regulatory Commission explained that system frequency is a critical indicator of power quality, noting that heavy-duty industrial equipment is designed to operate within strict frequency limits. It added that the national grid code prescribes a standard operating frequency of 50Hz, with an acceptable operating range of 49.75Hz to 50.25Hz.

According to the report, the average lower daily system frequency declined to 49.11Hz in the first quarter of 2026, while the average upper daily system frequency increased to 50.72Hz, resulting in a frequency variation of 1.61Hz.