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Home»National»A New Era For Nigeria’s Power Grid: NERC’s Strategy To Cut Transmission Losses
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A New Era For Nigeria’s Power Grid: NERC’s Strategy To Cut Transmission Losses

A comprehensive framework mandating smart metering, regional monitoring, and stricter performance targets to enhance efficiency and accountability across Nigeria’s national grid.
Adejuyigbe AdegokeBy Adejuyigbe AdegokeApril 13, 2026No Comments4 Mins Read
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The Nigerian Electricity Regulatory Commission (NERC), has introduced a comprehensive set of regulations aimed at reducing electricity transmission losses and improving transparency across Nigeria’s national grid.

The directive, issued as Order No. NERC/2026/026, was released on April 8, 2026, and became effective on April 13, 2026. It establishes a strengthened framework for monitoring, measuring, and reporting transmission losses, marking a critical step toward improving efficiency and accountability in Nigeria’s power sector.

Background and Sector Context

Electricity transmission losses remain a persistent challenge in Nigeria, largely due to aging infrastructure, weak monitoring systems, and operational inefficiencies. These losses occur when electrical energy dissipates during transmission from generation plants to distribution networks.

According to data from the Nigerian Independent System Operator (NISO):
  • Transmission loss factor declined from 8.71% in 2024
  • To 7.24% in 2025

Despite this improvement, losses still exceed the 7% benchmark set under the Multi-Year Tariff Order (MYTO), highlighting the need for stronger regulatory intervention.





The new rules are backed by the Electricity Act 2023, which empowers NERC to enforce efficiency, transparency, and accountability across the electricity market.

Key Stakeholders and Their Roles

The new regulatory framework clearly defines responsibilities for major players in the power sector:
a. NERC (Regulator)
  • Sets performance benchmarks
  • Monitors compliance
  • Enforces accountability across the transmission network
b. NISO (System Operator)
  • Responsible for grid operations and energy flow management
  • Mandated to implement advanced monitoring systems
c. Transmission Company of Nigeria (TCN)
  • Manages transmission infrastructure
  • Responsible for executing technical improvements to reduce losses

Key Provisions of the New Regulations

a. Mandatory Smart Metering

NISO must install smart meters at all regional interconnection boundary points by December 2026.

  • Ensures accurate measurement of electricity flows
  • Reduces estimation errors and data inconsistencies
b. Measurement at Transmission Substations
  • Energy flows must be measured and documented at transformers within transmission substations
  • Enables identification of technical loss points across the grid
c. Quarterly Regional Reporting
  • NISO must submit quarterly reports on transmission losses
  • Reports must be region-specific, improving transparency and targeted interventions
d. Regional Transmission Loss Framework
  • Introduction of a regional Transmission Loss Factor (TLF), system
  • Helps pinpoint high-loss zones and guide corrective actions
e. TCN Action Plan Requirement
The Transmission Company of Nigeria must:
  • Submit a comprehensive loss-reduction plan by July 2026
  • Outline operational and technical strategies to improve efficiency

Targets and Performance Benchmarks

NERC has introduced stricter performance targets to ensure measurable progress:
  • Maintain losses within the 7% MYTO benchmark
  • Achieve a maximum transmission loss of 6.5% by December 2026

These targets signal a shift toward results-driven regulation with clear accountability mechanisms.

Objectives of the New Framework

The initiative is designed to achieve several strategic goals:
a. Improved Transparency

Accurate, real-time data collection and reporting will enhance visibility into grid performance.

b. Strengthened Monitoring Systems

Advanced metering and reporting structures will allow NERC to better track inefficiencies and enforce compliance.

c. Enhanced Operational Efficiency

Data-driven insights will enable faster detection and resolution of faults within the transmission network.

d. Better Infrastructure Planning
Reliable data will support:
  • Investment decisions
  • Maintenance planning
  • Grid modernization efforts
e. Fair Pricing and Market Efficiency
Accurate loss accounting will:
  • Support cost-reflective tariffs
  • Improve fairness in electricity pricing for consumers

Expected Impact on the Power Sector

If effectively implemented, the new rules are expected to deliver significant benefits:
  • Reduction in transmission losses through improved monitoring and enforcement
  • Enhanced grid reliability and stability
  • Increased investor confidence due to improved transparency
  • Economic gains, including lower operational inefficiencies and better service delivery

Implementation Challenges

Despite the strong framework, several risks may affect outcomes:
  • Aging transmission infrastructure requiring substantial upgrades
  • Funding constraints for smart metering and grid modernisation
  • Technical capacity limitations in deploying advanced monitoring systems
  • System-wide inefficiencies, including generation and gas supply constraints

Addressing these challenges will require coordinated efforts among NERC, NISO, TCN, and other stakeholders.

Conclusion

The introduction of Order No. NERC/2026/026 by NERC represents a significant milestone in national electricity sector reform. By mandating smart metering, enforcing regional monitoring, and setting stricter performance targets, the regulator is laying the groundwork for a more efficient and transparent transmission system.

While implementation challenges remain, the policy provides a robust framework for reducing transmission losses, improving grid performance, and strengthening the overall electricity market in Nigeria.

#Francis #Journalism #NERC #PMNI Adegoke Adejuyigbe Economist Electricity Electricity Perception Fishe NG Grid Losses Media Agent News Agency Nigeria Power PR Agency Transmission
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