Amidst low supply, N40.61bn electricity lost from transmission lines in 6 months – Report

The Nigerian Electricity Regulatory Commission (NERC) has stated that N40.61bn worth of electricity was lost on transmission lines and did not make it to distribution centres. This happened despite the low supply of electricity to households and companies. Analysis of quarterly reports by NERC showed that N22.64bn of electricity was lost in the first quarter […]

The Nigerian Electricity Regulatory Commission (NERC) has stated that N40.61bn worth of electricity was lost on transmission lines and did not make it to distribution centres.

This happened despite the low supply of electricity to households and companies.

Analysis of quarterly reports by NERC showed that N22.64bn of electricity was lost in the first quarter of 2025 while N17.97bn was lost in the second quarter.

Termed Transmission Loss Factor (TLF), NERC said it refers to the proportion of the total energy sent out by the power plants that was either lost in transmission or utilised in the transmission station, thus, neither delivered to the DisCos nor exported to international customers.

It stated that there is an inverse relationship between the TLF and the efficiency of the transmission system as a decline in the TLF indicates an improvement in transmission efficiency over a given period.

The report stated that the loss for both quarters is above the approved seven per cent for the Transmission Service Provider (TSP) while in the first quarter 9.00 per cent TLF was recorded.

“The Q1 represents an underperformance of 2.00 percent relative to the MYTO target for 2025 7.00 percent.

The TLF target represents the efficient loss in transmission that is recoverable from customers based on the approved revenue requirements of the Transmission Service Provider (TSP).

“Exceeding the TLF target means that the TSP will not be able to earn its full revenue requirement because there is no provision to recover the revenues needed to cover the excess (inefficient) losses from customers.

The 2.00pp TLF underperformance for the quarter translates to a N22.64bn revenue loss (22% of the TSP’s approved revenue requirement for 2025/Q1).”

In the second quarter, it said the loss was 8.58 per cent and it indicates that for every 100MWh of energy injected into the grid, 8.58MWh of energy is undelivered to DisCos and international customers due to losses in the transmission network or consumption at the transmission substations.

 

Revenue leakage causing liquidity crisis in sector

The Nigerian Electricity Supply Industry (NESI) has overtime battled with a liquidity issue that has led to the takeover of some electricity distribution companies by lenders.

The illiquidity is exacerbated by customers bypassing their meters and vandalism of electricity installations that has put millions of communities across the country in darkness.

Also, the continued payment of subsidies by the government has led to trillions of debts that the government has not fulfilled, leaving most electricity generation companies not making investments to expand the generating capacity of their plants.

For instance, Kola Adeshina, Group Managing Director of Sahara Power Group had stated that the accumulation of debt to over N4trn showed there was no real commercialization principle in place when the government privatised the sector.

“We’re still doing more of trying to get into that commercial framework of running electricity. But as time went by, we started seeing some policies inconsistent with regulation and of course, that was the moment we stopped investing as massively as we should.”

 

‘Inadequate demand limiting generation to less than 5,000MW’

Meanwhile, the Minister of Power, Adebayo Adelabu, has stated that the inability to increase demand of electricity on the national grid has stalled generation between 5,000 to 4,000 megawatts (MW) by the 28 electricity generation companies connected to the grid.

Adelabu who stated that despite the 28 companies having over 13,000MW of installed capacities and the transmission Company of Nigeria (TCN) with 8,000MW of evacuation capacity, generation companies can’t go beyond the current generation of 4,500 due to demand not exceeding the figure.

Speaking during the maiden stakeholders’ engagement organised by the Nigerian Independent System Operator, the minister added that the government has been able to attract over $2 billion in fresh investments into the sector to expand electricity access in the country.

“In Nigeria, while we have not been able to take more than 5,000 megawatts, it is the demand that is required as we have the capacity. The evacuation grid can take 8,500 and is also increasing its capacity.

“But the demand must be equal to the generation and equal to the consumption at any time. So that’s why we are appealing to the state regulators and state distribution companies to increase consumption. That’s the only way the creation of a state market would have made an impact in the market,” he said.

He added that the decentralization and liberalization of the sector have resulted in the activation of fifteen state electricity markets which was made possible with the Electricity Act 2023.

“We have commenced the process to transition the industry towards full commercialization which increased the sector’s revenue by 70% in the year 2024 and reduced government’s liability in the sector by N700bn.

“Also, the successful mobilization of N700bn funding from FAAC to implement the Presidential Metering Initiative, aimed at tackling the sector’s long-standing metering gap. This is complemented by the World Bank DISREP fund of $500m adding 3.45m meters to the sector. Procurement of the meters has commenced.”

He added that the country is currently exporting over 360MW of electricity to neighbouring countries and will soon be increased to 600MW when new transmission is completed in the Lagos transmission corridor.

While speaking on the recent synchronization of the Nigerian power grid to the West African Power Pool, he said the connection is still at the test stage and not a permanent synchronisation, but provides useful lessons on driving other key reforms in the industry.

On his part, the Managing Director of NISO, Engr. Abdu Mohammed, said Nigeria made history with the successful synchronization for four unbroken hours.

“Electricity flowed from Nigeria and Niger into the entire West African sub-region covering Benin, Togo, Ghana, Côte d’Ivoire, Liberia, Sierra Leone, Guinea, Senegal, Mali, The Gambia and Guinea Bissau operating at a single, stabilized frequency.

That achievement was not accidental. It was the result of strengthened coordination, harmonized operating procedures, and transparent system management. It was a demonstration of what is possible when technical competence, operational discipline, and institutional collaboration work in harmony,” he said.