Nigeria's electricity transmission system 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 efficiency targets set by the Nigerian Electricity Regulatory Commission (NERC).
The Transmission Loss Factor (TLF) during the period exceeded the regulatory benchmark, meaning a significant portion of generated electricity never reached distribution companies and other customers.
NERC explained that the TLF measures how much electricity is lost or consumed at transmission substations before reaching its final destination. The lower this figure, the more efficient the transmission network operates.
According to NERC's first-quarter report, the financial impact comprised N257.91 million from direct transmission losses and N2.35 billion in penalties owed to power generation companies. The regulator noted this estimate excludes additional penalties for failing to deliver electricity to distribution companies as required.
The average TLF during the quarter reached 7.96 percent, overshooting the 7.00 percent target under the Multi-Year Tariff Order framework. "For every 100 megawatt-hours of electricity injected into the grid, 7.96MWh is not delivered to distribution companies and international customers," NERC stated.
Performance worsened compared to the previous quarter, when the TLF stood at 7.27 percent. This represents a 0.69 percentage point increase and a 0.96 percentage point shortfall against the 2026 regulatory target.
Although the losses are lower than the N3.13 billion recorded in the fourth quarter of 2025, they highlight persistent operational challenges in Nigeria's electricity transmission network.
NERC warned that exceeding the allowable transmission loss threshold carries direct financial consequences for TCN. The transmission company cannot pass these additional losses to electricity consumers through tariffs.
"Exceeding the TLF target means the transmission service provider will not be able to meet its full revenue requirement, as there is no provision to recover the excess losses from customers," the commission said.
The regulator added that TCN must compensate generation companies for electricity that is generated but remains unbillable to distribution companies or other off-takers due to network inefficiencies. According to NERC, the 0.96 percentage point TLF underperformance during the quarter cost TCN precisely N2.61 billion in unrecoverable expenses.
Beyond the financial burden, the report highlighted deteriorating operational stability within the national grid. The findings underscore mounting pressure on Nigeria's transmission infrastructure to improve efficiency and reduce losses that ultimately strain the entire power sector.
