NERC Directs TCN to Cut Regional Transmission Losses to 6.5% by 2026
In a significant move to enhance transparency and accountability within Nigeria's electricity supply industry, the Nigerian Electricity Regulatory Commission has issued a new order mandating the Transmission Company of Nigeria to reduce regional transmission losses to no more than 6.5 per cent by the end of 2026. This directive, formalized under Order No. NERC/2026/026 on April 8, takes immediate effect and is supported by the provisions of the Electricity Act 2023.
Framework for Reporting and Monitoring
The order establishes a formal framework for reporting transmission loss factors across all regions operated by TCN. According to data from the Nigerian Independent System Operator, the national average transmission loss factor was 8.71 per cent in 2024, declining to 7.24 per cent in 2025. Both figures exceeded the seven per cent benchmark approved under the Multi-Year Tariff Order. Recent updates indicate that targeted operational measures have further improved the loss factor to approximately 7.05 per cent.
Under the new regulations, NISO is required to install smart meters at all regional interconnection points by December 2026 to enable precise measurement of energy flows. Additionally, NISO must track electricity passing through transmission transformers and submit quarterly regional reports to NERC. TCN has been given until July 2026 to submit a detailed plan outlining how it will achieve the loss reduction targets.
Financial Impact and Sector Reforms
The directive comes amid growing concerns over the financial repercussions of transmission inefficiencies. NISO Managing Director Abdu Mohammed Bello recently highlighted that the sector had been losing between five billion and eight billion naira monthly due to high losses when operations began, with the loss factor previously nearing 10 per cent. He noted that improved monitoring and coordination have started to reduce losses, but further cuts to between five and six per cent are necessary to meet regulatory targets.
This latest initiative builds on broader reforms in Nigeria's power sector. The unbundling of TCN under the Electricity Act led to the creation of NISO in 2025, separating system operations from transmission infrastructure responsibilities. Despite these improvements, challenges persist, with Nigeria's grid recording several collapses in early 2026, continuing a pattern observed in previous years. While peak transmission reached a record 5,801.84 megawatts in March 2025, supply to consumers remains constrained by limitations across generation, transmission, and distribution.
Accountability and Future Investments
The new order is expected to strengthen accountability by shifting focus from national averages to region-specific performance metrics. Industry observers interpret this as a sign of a tougher regulatory stance following years of underperformance relative to approved benchmarks. TCN has expanded its infrastructure in recent years, commissioning new transformers and upgrading key transmission lines with support from development partners such as the African Development Bank.
Stakeholders emphasize that meeting the 6.5 per cent target will require sustained investment in modern systems, including supervisory control and data acquisition technology, alongside enhanced operational discipline. By December 31, 2026, no transmission region is expected to exceed the stricter cap, marking a critical step toward improving grid efficiency and reliability in Nigeria's electricity sector.
