NERC orders TCN to cut losses

The Nigerian Electricity Regulatory Commission has ordered the Transmission Company of Nigeria to reduce transmission losses across the national grid to 6.5 per cent by December 31, 2026, as part of measures aimed at improving efficiency and transparency in the electricity transmission network.

In an order dated April 8, 2026, the commission said the directive formed part of a new framework for regional transmission loss factor reporting designed to strengthen grid oversight and accountability.

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 explained that transmission network losses represent energy dissipated during the conveyance of electricity due to resistance in lines, transformer losses, and operational inefficiencies, noting that although some losses are unavoidable, improved planning and optimisation can minimise 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 remained a key metric for assessing grid performance, explaining that it measures the difference between total energy injected into the transmission system and energy 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 stated.

The regulator cited data from the Nigerian Independent System Operator indicating that national average transmission losses exceeded approved benchmarks in recent years.

“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 noted that increasing grid complexity and geographic spread necessitated stronger monitoring mechanisms, adding that regional reporting would help identify high-loss corridors. To support the loss reduction target, the commission directed the system operator to install smart meters at regional boundaries.

The regulator also instructed the system operator to measure energy flows in transformers across transmission substations. “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 regional reporting of transmission losses. The order stated that NISO shall file quarterly reports on TLF to the commission on a regional basis no later than 30 June 2026 using a template provided in the order.

It also required TCN to submit a corrective plan for regions exceeding allowable 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 order would attract sanctions, saying, “Non-compliance with the provisions of this order shall attract appropriate regulatory measures as prescribed in the Terms and Conditions of the defaulting Licensee’s Licence and other applicable regulations or orders of the commission.”

The Managing Director/Chief Executive Officer of the Nigerian Independent System Operator, Abdu Bello, said Nigeria’s power sector was losing between N5bn and N8bn monthly to transmission inefficiencies, even as he revealed that targeted interventions by the operator have begun to cut losses and improve grid stability.

Bello made this known on Wednesday during the organisation’s first anniversary celebration held at its headquarters in Utako, Abuja, where he presented a detailed scorecard of reforms and operational milestones recorded since its establishment.