The Nigerian Electricity Regulatory Commission (NERC) reported that N40.61bn worth of power was lost through transmission lines and failed t...
The Nigerian Electricity Regulatory Commission (NERC) reported that N40.61bn worth of power was lost through transmission lines and failed to reach distribution points.
This occurred even though there was a limited availability of electricity for homes and businesses.
According to an analysis of quarterly reports by NERC, N22.64bn of electricity was lost during the first quarter of 2025, whereas N17.97bn was lost in the second quarter.
Known as the Transmission Loss Factor (TLF), NERC stated that it represents the percentage of the overall energy generated by power plants that was either lost during transmission or used within the transmission station, meaning it was not delivered to the DisCos nor sent to international clients.
It mentioned that there is a reverse connection between the TLF and the effectiveness of the transmission system, with a decrease in the TLF suggesting an enhancement in transmission efficiency during a specific time frame.
The report indicated that the loss for both quarters exceeded the approved seven percent for the Transmission Service Provider (TSP), whereas a 9.00 percent TLF was noted in the first quarter.
The Q1 shows a shortfall of 2.00 percent compared to the MYTO goal for 2025, which is set at 7.00 percent.
The TLF target indicates the recoverable transmission loss efficiency from customers, determined by the approved revenue needs of the Transmission Service Provider (TSP).
Surpassing the TLF target implies that the TSP will not be able to achieve its complete revenue requirement, as there is no mechanism in place to recoup the revenues necessary to offset the additional (inefficient) losses incurred from customers.
The 2.00pp TLF underperformance for the quarter results in a revenue loss of N22.64bn (22% of the TSP's approved revenue target for 2025/Q1).
In the second quarter, it reported a loss of 8.58 per cent, indicating that for every 100MWh of energy fed into the grid, 8.58MWh of energy is not delivered to DisCos and international customers because of losses in the transmission network or consumption at transmission substations.
Income loss leading to financial difficulties in the industry
The Nigerian Power Sector has, over time, faced a financial challenge that resulted in certain electricity distribution companies being acquired by creditors.
The lack of liquidity is worsened by customers by-passing their meters and damaging electrical infrastructure, which has left millions of communities across the country without power.
Additionally, the ongoing provision of subsidies by the government has resulted in trillions of outstanding debts that the government has failed to settle, causing most electricity generation companies to refrain from investing in expanding their power plant capacities.
For example, Kola Adeshina, the Group Managing Director of Sahara Power Group, mentioned that the buildup of debt exceeding N4trn indicated that there were no genuine commercialization principles applied during the sector's privatization.
We continue to focus on entering that commercial structure for electricity operations. However, as time passed, we began to notice certain policies that conflicted with regulations, and that was the point when we ceased investing as much as we should have.
Insufficient demand restricting output to under 5,000MW
In the meantime, Adebayo Adelabu, the Minister of Power, mentioned that the failure to boost electricity demand on the national grid has caused generation levels from the 28 power plants linked to the grid to remain between 5,000 and 4,000 megawatts.
Adelabu mentioned that even though 28 companies have more than 13,000MW of installed capacity and the Transmission Company of Nigeria (TCN) has 8,000MW of evacuation capability, power generation companies are unable to exceed the current level of 4,500MW because demand does not surpass this amount.
During the first stakeholders' meeting hosted by the Nigerian Independent System Operator, the minister stated that the government has managed to draw in more than $2 billion in new funding for the sector to increase power availability across the nation.
In Nigeria, although we haven't managed to generate more than 5,000 megawatts, the main issue is the demand, as we possess the necessary capacity. The transmission grid can handle 8,500 and is also expanding its capabilities.
"But the demand has to match both the generation and the consumption at all times. That's why we are urging state regulators and distribution companies to boost consumption. This is the only way that establishing a state market would have any effect in the market," he said.
He mentioned that the decentralization and liberalization of the sector have led to the establishment of fifteen state electricity markets, made possible by the Electricity Act 2023.
We have initiated the process of moving the industry toward complete commercialization, which led to a 70% increase in the sector's revenue in 2024 and decreased the government's responsibility in the sector by N700bn.
Additionally, the effective mobilization of N700bn from FAAC to execute the Presidential Metering Initiative, which seeks to address the sector's persistent metering shortfall. This is supported by the World Bank DISREP fund of $500m, which will introduce 3.45m meters into the sector. The acquisition of these meters has already begun.
He mentioned that the nation is currently exporting more than 360MW of power to nearby countries and expects to raise this figure to 600MW once new transmission infrastructure is finished in the Lagos transmission corridor.
While discussing the recent integration of the Nigerian power grid with the West African Power Pool, he mentioned that the connection is currently in the testing phase and not yet a permanent synchronization, but it offers valuable insights for advancing other important reforms in the sector.
From his side, the Managing Director of NISO, Engr. Abdu Mohammed, stated that Nigeria created history by achieving a successful synchronization lasting four consecutive hours.
Electricity was transmitted from Nigeria and Niger across the entire West African sub-region, including Benin, Togo, Ghana, Côte d'Ivoire, Liberia, Sierra Leone, Guinea, Senegal, Mali, The Gambia, and Guinea Bissau, all functioning at a unified and stable frequency.
That accomplishment was not by chance. It stemmed from improved coordination, aligned operational methods, and clear system administration. It showcased what can be achieved when technical expertise, operational rigor, and organizational cooperation align," he stated.
Provided by SyndiGate Media Inc. (Syndigate.info).
