NERC orders TCN to cut grid losses to 6.5% by end of 2026, tightens oversight

By Adelabu Jumoke 

The Nigerian Electricity Regulatory Commission (NERC) has directed the Transmission Company of Nigeria (TCN) to reduce transmission losses on the national grid to 6.5 per cent by December 31, 2026, as part of efforts to boost efficiency, accountability, and transparency in the power sector.

The directive, issued in an order dated April 8, 2026, forms part of a newly introduced framework for regional Transmission Loss Factor (TLF) reporting aimed at strengthening grid monitoring and performance evaluation.

According to the commission, TCN must ensure that transmission losses across all regions of the Nigerian Electricity Supply Industry (NESI) do not exceed the 6.5 per cent threshold in line with the Multi-Year Tariff Order (MYTO) 2024.

NERC explained that transmission losses—energy dissipated during electricity conveyance due to factors such as line resistance, transformer inefficiencies, and operational lapses—are partly unavoidable but can be significantly reduced through improved planning, maintenance, and operational optimisation.

Describing TLF as a critical performance metric, the commission noted that it reflects the gap between energy injected into the grid and what is ultimately delivered. High loss levels, it said, often stem from ageing infrastructure, weak network components, and suboptimal operational practices.

Data from the Nigerian Independent System Operator (NISO) showed that Nigeria’s average transmission losses exceeded regulatory benchmarks in recent years, recording 8.71 per cent in 2024 and 7.24 per cent in 2025—both above the approved 7 per cent limit.

To address this, NERC has mandated the installation of smart meters at all regional interconnection points by December 2026 to improve the accuracy of energy flow measurement. The system operator is also required to monitor and document energy flows across transformers in all transmission substations.

Additionally, NISO must submit quarterly regional TLF reports to the commission starting no later than June 30, 2026. TCN is also expected to file a comprehensive corrective action plan by July 31, 2026, for any region where losses exceed allowable limits.

The commission warned that failure to comply with these directives would attract regulatory sanctions.

Meanwhile, NISO’s Managing Director/CEO, Abdu Bello, revealed that inefficiencies in the transmission network currently cost the country between ₦5 billion and ₦8 billion monthly. He, however, noted that ongoing reforms and targeted interventions are already helping to reduce losses and enhance grid stability.