Nigeria’s electricity transmission inefficiencies 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 average Transmission Loss Factor (TLF), the percentage of electricity lost while being transported from generating plants to distribution companies stood at 7.96%, exceeding the 7.00% target prescribed under the Multi-Year Tariff Order (MYTO), Nigeria’s electricity tariff framework.
The result implies that nearly 8 megawatt-hours (MWh) of electricity were lost during transmission for every 100 MWh injected into the national grid, highlighting persistent weaknesses in the country’s transmission infrastructure.
NERC estimated that the financial impact of the excess losses reached N2.61 billion during the quarter. The figure comprises N257.91 million attributable to excess transmission loss costs and N2.35 billion in penalties payable to electricity generation companies (GenCos). The regulator noted that the estimate excludes additional liabilities arising from service-level agreement penalties that TCN may also incur.
Although the latest figure represents a decline from the N3.13 billion recorded in the fourth quarter of 2025, operational performance deteriorated during the period. The average Transmission Loss Factor increased by 0.69 percentage points from 7.27% in the previous quarter and remained 0.96 percentage points above the regulatory threshold.
Under Nigeria’s electricity market rules, transmission losses above the approved benchmark cannot be passed on to consumers through electricity tariffs. Instead, the additional costs are absorbed within the power value chain, placing further financial pressure on TCN and other market participants already grappling with liquidity constraints.
Beyond the financial implications, NERC said grid stability weakened during the quarter, citing increased frequency fluctuations across the national transmission network. Such fluctuations can reduce power quality, increase the risk of equipment damage and disrupt operations for energy-intensive industries that rely on stable electricity supply.
The report underscores the continuing challenge of modernising Nigeria’s ageing transmission infrastructure despite ongoing investments aimed at expanding grid capacity and improving operational reliability. Industry analysts have consistently argued that strengthening transmission efficiency is essential to reducing technical losses, improving electricity delivery and enhancing the financial sustainability of Nigeria’s power sector.
As electricity demand continues to rise, sustained investment in transmission infrastructure, improved grid management and stricter operational compliance will remain critical to limiting avoidable losses and supporting a more reliable electricity market.
