July 10 (THEWILL) — Nigeria’s electricity transmission losses cost the power sector an estimated N2.61 billion in the first quarter of 2026 after the Transmission Company of Nigeria (TCN) failed to meet the transmission loss benchmark set by the Nigerian Electricity Regulatory Commission (NERC).
According to NERC’s First Quarter 2026 Report, the Transmission Loss Factor (TLF) rose above the regulatory target, meaning a portion of electricity generated during the period was either lost on the transmission network or consumed at transmission stations before reaching electricity distribution companies (DisCos) and other off-takers.
The commission said the estimated cost of the underperformance comprised N257.91 million attributable to transmission loss factor losses and N2.35 billion in penalties payable to generation companies (GenCos).
The figure excludes any penalties TCN may have incurred under service level agreements for under-delivery to DisCos.
The N2.61 billion loss represents an improvement from the N3.13 billion recorded in the fourth quarter of 2025.
The report showed that the average TLF stood at 7.96 percent during the quarter, exceeding the Multi-Year Tariff Order (MYTO) target of 7.00 percent.
“The average TLF in 2026/Q1 was 7.96 percent. A TLF of 7.96 percent 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 stated.
The Commission said the performance deteriorated from the 7.27 percent recorded in the preceding quarter, representing an increase of 0.69 percentage points.
It added that the transmission company also missed the regulatory benchmark by 0.96 percentage points.
“The 7.96 percent TLF recorded in 2026/Q1 represents an underperformance of 0.96 percentage points relative to the MYTO target for 2026 (7.00 percent),” the report stated.
NERC explained that losses above the approved benchmark cannot be passed on to electricity consumers, leaving the transmission company to absorb the financial impact.
“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,” it said.
The Commission added that the transmission company must also compensate GenCos for electricity generated but not delivered.
“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 0.96 percentage point TLF underperformance during the quarter is N2.61 billion,” NERC stated.
Beyond transmission losses, the report showed a deterioration in national grid stability during the quarter, with wider fluctuations in system frequency.
According to NERC, the average lower daily system frequency fell to 49.11Hz while the average upper daily frequency increased to 50.72Hz, resulting in a frequency range of 1.61Hz, compared with 1.27Hz in the previous quarter.
“The 0.34Hz (26.77 percent) increase in the average quarterly frequency range recorded in 2026/Q1 relative to 2025/Q4 indicates a slight decline in the stability of the National Grid’s frequency profile during 2026/Q1,” the Commission stated.
The regulator also reported persistent voltage fluctuations across the transmission network.
While the Grid Code prescribes an operating voltage range of 313.50kV to 346.50kV for the 330kV transmission network, the report showed the average lower operating voltage fell to 304.21kV, while the average upper voltage reached 349.88kV during the quarter.
NERC warned that unstable voltage, including spikes, dips, flickers and brownouts, could damage electrical equipment, particularly industrial machinery, forcing businesses to rely on alternative power sources outside the national grid.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
