In a bid to checkmate increasing Transmission Loss Factor (TLF) nationwide, the Nigerian Electricity Regulatory Commission (NERC) has issued an order to among other things, provide locational loss data that aids optimal investment decisions and network optimisation.
The “Order on Regional Transmission Loss Factor Reporting for Enhanced Grid Transparency and Efficiency” takes effect from 13 April 2026 until revoked or amended. It was jointly signed by NERC Chairman, Musiliu Oseni Chairman and the Commissioner Legal, Licencing & Compliance, Dafe Akpeneye.
The TLF represents the proportion of electrical energy lost within the transmission network between points of energy injection into the grid and points of energy off-take from the grid.
NERC threatened that non-compliance with the provisions of this Order shall attract appropriate regulatory measures as prescribed in the Terms and Conditions of the defaulting Licensee’s Licence and other applicable regulations or orders of the Commission.
The Order directs that “NISO shall install smart meters at all boundary regional interconnection points by 31 December 2026 to accurately measure energy inflows and outflows for each region of the transmission network.
“NISO shall measure and document energy flow in and out of power transformers at all transmission substations to evaluate the compliance of the allowable loss value of the transformers in compliance with section 2.3.4.1(b) of the Nigerian Electricity Supply and Installation Standards Regulations 2015.
“NISO shall file quarterly reports on TLF to the Commission on a regional basis no later than 30 June 2026 using the template provided in the Schedules to this Order.
“TCN shall file a comprehensive action plan by 31 July 2026 on the reduction of TLF to a value within the approved benchmarks in regions where the TLF exceeds the allowable limits for approval.
“TCN shall ensure that TLF across all transmission regions in NESI shall not exceed 6.5% by 31 December 2026, in compliance with MTYO 2024 for TCN.”
NERC explained that other objectives of the Order include to “Enhance regulatory oversight, accountability, and system planning by enabling performance benchmarking across different regions and facilitating targeted interventions in identified high-loss areas.
It also includes to “Improve efficiency and transparency in the allocation of transmission losses by transitioning from a national to a regionally disaggregated TLF reporting.”
With the Order NERC targets to “Promote alignment with international best practices and promote long-term system efficiency, cost savings, and equitable tariff structures through more accurate measurement and management of transmission losses.”
NERC cited that the Order is based on its mandate under section 34(1)(a) of the Electricity Act 2023 (“EA” or the “Act”) “to create, promote and preserve efficient electricity industry and market structures, and to ensure optimal utilisation of resources for the provision of electricity services”.
Section 34(2)(f) of the Act further empowers the Commission “to monitor the operation of the electricity markets and sanction licensees in deserving circumstances in accordance with the provisions of this Act and other subsidiary legislation”.
Section 66(1)(a) of the Act mandates a transmission licensee “to construct, maintain and operate an efficient, coordinated, economical and integrated smart grid interconnection in Nigeria and other neighbouring countries”.
Transmission network losses represent the portion of electrical energy that is dissipated during conveyance of electricity through the transmission network due to inherent physical characteristics of the grid, including resistance in transmission lines, transformer losses and other operational things.
While a certain level of loss is technically unavoidable, effective planning, maintenance, and operational optimisation can minimize losses.
