The Nigerian Electricity Regulatory Commission has directed the Transmission Company of Nigeria to cut transmission losses on the national grid to 6.5 per cent by December 31, 2026, as part of efforts to enhance efficiency and transparency in the power transmission network.
In an order dated April 8, 2026, the commission stated that the move is part of a new framework for reporting regional transmission loss factors, aimed at improving oversight and accountability across the grid.
The order stated, “TCN shall ensure that TLF across all transmission regions in NESI shall not exceed 6.5 per cent by 31 December 2026, in compliance with MTYO 2024 for TCN.”
The regulator noted that transmission losses refer to electricity lost in transit due to line resistance, transformer inefficiencies, and other operational constraints. While acknowledging that some losses are inevitable, it stressed that better planning and system optimisation can significantly reduce them.
“Transmission network losses represent the portion of electrical energy that is dissipated during conveyance of electricity through the transmission network due to inherent physical characteristics of the grid, including resistance in transmission lines, transformer losses, and other operational inefficiencies. While a certain level of loss is technically unavoidable, effective network planning, maintenance, and operational optimisation can minimise these losses,” NERC said.
The commission said the Transmission Loss Factor remains a key performance indicator for evaluating grid efficiency, as it reflects the difference between total electricity injected into the transmission network and the amount delivered at exit points.
“TLF therefore serves as a critical performance indicator for assessing grid efficiency, operational integrity of the transmission network, and the effectiveness of energy accounting within the grid. Elevated transmission losses may arise from a number of factors, including ageing or inefficient network equipment, degraded infrastructure, and suboptimal operational practices,” it noted.
The regulator cited data from the Nigerian Independent System Operator, which showed that national average transmission losses have in recent years exceeded approved benchmarks.
” Data from the Nigerian Independent System Operator’s report indicates that the national average TLF stood at 8.71 per cent in 2024 and 7.24 per cent in 2025, both of which exceed the Multi-Year Tariff Order benchmark of 7 per cent approved by the commission,” the order said.
The commission said the growing complexity and geographic spread of the grid make stronger monitoring systems necessary, adding that regional reporting would help identify high-loss corridors across the network.
To help achieve the loss reduction target, it directed the system operator to deploy smart meters at regional boundaries.
The regulator also ordered the measurement of energy flows through transformers at transmission substations to improve tracking and accountability.
“NISO shall install smart meters at all boundary regional interconnection points by 31 December 2026 to accurately measure energy inflows and outflows for each region of the transmission network.”
“NISO shall measure and document energy flow in and out of power transformers at all transmission substations to evaluate the compliance of the allowable loss value of the transformers in compliance with section 2.3.4.1 (b) of the Nigerian Electricity Supply and Installation Standards Regulations 2015,” it stated.
Furthermore, the commission mandated quarterly reporting of transmission losses across regions. It directed the Nigerian Independent System Operator (NISO) to submit quarterly Transmission Loss Factor reports to the commission by June 30, 2026, using a template specified in the order.
The directive also requires the Transmission Company of Nigeria to present a corrective action plan for any regions that exceed approved loss limits.
“TCN shall file a comprehensive action plan by 31 July 2026 on the reduction of TLF to a value within the approved benchmarks in regions where the TLF exceeds the allowable limits for approval,” it added.
The commission warned that failure to comply with the directive would attract sanctions, stating that non-compliance would be met with appropriate regulatory measures as outlined in the terms and conditions of the defaulting licensee’s licence, as well as other applicable regulations or orders of the commission.
