Nigeria’s electricity transmission losses cost the power sector an estimated N2.61bn in the first quarter of 2026 as the Transmission Company of Nigeria failed to meet the loss target set by the Nigerian Electricity Regulatory Commission.

The latest first-quarter report released by the commission showed that the Transmission Loss Factor rose above the regulatory benchmark, meaning a share of electricity generated never reached electricity distribution companies and other off-takers.

The Transmission Loss Factor refers to the proportion of the total energy generated by power plants that was either lost during transmission or utilised at transmission stations, meaning it was neither delivered to DisCos nor exported to international customers.

NERC said there is an inverse relationship between the TLF and the efficiency of the transmission system, noting that a decline in the TLF indicates an improvement in transmission efficiency over a given period.

The report showed that the N2.61bn cost comprised N257.91m attributable to transmission loss factor losses and N2.35bn in penalties payable to power generation companies.

It noted that the figure excluded service level agreement penalties that TCN may have incurred due to under-delivery to distribution companies.

NERC said the estimated loss was lower than the N3.13bn recorded in the fourth quarter of 2025. According to the report, the average Transmission Loss Factor recorded during the review period stood at 7.96 per cent, exceeding the Multi-Year Tariff Order target of 7.00 per cent.

The commission said, “The average TLF in 2026/Q1 was 7.96 per cent. A TLF of 7.96 per cent 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 noted that the performance worsened compared with the previous quarter. It said, “The TLF recorded in 2026/Q1 represents a 0.69 percentage point increase relative to the 7.27 per cent recorded in 2025/Q4.”

The regulator added that the transmission company also failed to meet the benchmark established under the tariff framework. According to the report, “The 7.96 per cent TLF recorded in 2026/Q1 represents an underperformance of 0.96 percentage points relative to the MYTO target for 2026 (7.00 per cent).”

The commission explained that exceeding the allowable transmission loss has direct financial implications because the excess losses cannot be recovered from electricity consumers.

“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,” the regulator stated.

Giving the financial impact of the losses, the regulator said, “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 0.96pp TLF underperformance during the quarter is N2.61bn.”

The report also indicated that the stability of the national grid deteriorated during the quarter as fluctuations in system frequency increased, a development that could affect power quality, especially for industrial consumers.

NERC explained that frequency is a key indicator of power quality because heavy-duty industrial machinery is designed to operate within strict frequency limits. It noted that the grid code prescribes a standard operating frequency of 50Hz, with a normal operating range of between 49.75Hz and 50.25Hz.

According to the report, the average lower daily system frequency fell to 49.11Hz in the first quarter of 2026, while the average upper daily system frequency rose to 50.72Hz, resulting in a frequency range of 1.61Hz.

This compares with a range of 1.27Hz recorded in the previous quarter. The commission stated, “The 0.34Hz (26.77 per cent) 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 regulator also reported persistent voltage fluctuations on the transmission network, warning that unstable voltage could damage electrical equipment and impose high costs on electricity consumers.

It noted that the grid code prescribes a nominal transmission voltage of 330kV, with an acceptable operating range of between 313.50kV and 346.50kV.

However, the report showed that the transmission network recorded an average lower operating voltage of 304.21kV and an average upper operating voltage of 349.88kV during the quarter, indicating that the system operated outside the prescribed limits at different times.

NERC warned that voltage fluctuations, including spikes, dips, flickers and brownouts, could damage industrial machinery and compel manufacturers to rely on alternative sources of electricity outside the national grid.

“Fluctuations in grid voltage, including spikes, dips, flickers and brownouts, can cause significant harm to consumers and result in substantial commercial losses.

“Extreme cases of voltage fluctuations, particularly at the distribution network level, can cause severe damage to industrial machines, thereby compelling industrial customers to seek alternative sources of power outside the national grid,” the commission said.

The report shows persistent operational challenges in Nigeria’s transmission network, with transmission losses, unstable frequency, and voltage fluctuations continuing to undermine grid reliability despite ongoing investments to strengthen electricity infrastructure.