Electricity: NERC Introduces New Framework To Cut Power Losses

The Nigerian Electricity Regulatory Commission (NERC) has introduced fresh regulations aimed at reducing electricity transmission losses and improving transparency across Nigeria’s national grid.

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The Commission disclosed that the new directive is anchored on Order No. NERC/2026/026, which establishes a strengthened framework for the reporting and monitoring of Regional Transmission Loss Factors across the country’s transmission network.

Data from the Nigerian Independent System Operator showed that the national average transmission loss factor stood at 8.71 per cent in 2024 before dropping to 7.24 per cent in 2025.

Despite the improvement, the figure still exceeds the 7 per cent benchmark set under the Multi-Year Tariff Order.

The Commission said the new order is designed to close this gap and enhance overall efficiency in the electricity market.

According to NERC, the directive, dated April 8, 2026, takes effect from April 13, 2026.

It is backed by provisions of the Electricity Act 2023, which empowers the Commission to regulate, monitor and enforce efficiency and accountability within the power sector.

In a statement shared via its official 𝕏 account, NERC outlined key requirements under the new framework.

“Under the new order, the Nigerian Independent System Operator (NISO) is required to install smart meters at all regional interconnection boundary points by December 2026 to ensure accurate measurement of energy flows,” the Commission said.

It added that NISO must also measure and document energy flow at power transformers in transmission substations.

“NISO is also expected to… submit quarterly regional reports on transmission losses to the regulator,” it stated.

The Commission further directed the system operator to submit a detailed action plan by July 2026 aimed at reducing losses to within approved benchmarks.

It set a target that transmission losses across all regions must not exceed 6.5 per cent by December 2026.

“The objective of this order is to enhance transparency, improve monitoring, and ensure efficiency in the management of transmission losses across the grid,” NERC said.

It stressed that accurate reporting remains critical to improving grid performance and ensuring fair pricing in the electricity market.

In addition to the transmission loss framework, NERC also announced the release of the Mini-Grid Regulations 2026.

The regulation, numbered NERC-R-001-2026, provides a comprehensive framework for the development, operation, and regulation of mini-grid systems across Nigeria.

According to the Commission, the policy is aimed at expanding electricity access, particularly in unserved and underserved communities, while ensuring safety, fair tariffs, and investor protection.

NERC explained that the new guidelines strengthen coordination among mini-grid developers, operators, distribution companies, and host communities, in line with the Electricity Act 2023.

The regulation covers:

• Isolated mini-grids operating independently of DisCos, with capacities of up to 5MW
• Interconnected mini-grids linked to existing distribution networks, with capacities of up to 10MW

Mini-grids below 100KW are required to be registered, while those above 100KW must obtain permits from the Commission.

30-day Permit Window, Stricter Reporting Rules

The Commission stated that permits for eligible mini-grid projects will be processed within 30 business days of application.

It also introduced new reporting obligations for operators.

“Mini-grids below 1MW will submit annual reports, while those above 1MW must submit quarterly reports,” NERC said.

NERC noted that it would carry out continuous monitoring and may publish industry data to improve transparency and accountability.

“The Mini-Grid Regulations 2026 provide a clear and structured framework for operators, ensuring safety, accountability, and improved electricity access in underserved communities,” the Commission said.

It added that the policy is expected to attract investment into the mini-grid sector and accelerate rural electrification.

The Commission emphasised that the new regulations form part of broader efforts to strengthen Nigeria’s electricity sector.

According to NERC, the combined measures are expected to improve infrastructure management, enhance regulatory oversight, and ensure sustainable energy development across the country.