Nigeria’s electricity regulator has introduced new rules aimed at reducing transmission losses and enhancing oversight of the national grid. The Nigerian Electricity Regulatory Commission (NERC) announced these measures under Order No. NERC/2026/026, which seeks to improve the reporting and monitoring of Regional Transmission Loss Factors—an issue that has significantly hindered efficiency in the country’s power sector. Official data indicates that transmission losses decreased from an average of 8.71 percent in 2024 to 7.24 percent in 2025. Although this represents progress, the figure still exceeds the 7 percent benchmark established under the Multi-Year Tariff Order (MYTO).
The new framework, effective from April 13, 2026, is supported by the Electricity Act 2023, which grants NERC the authority to enforce efficiency and accountability. According to the order, the Nigerian Independent System Operator (NISO) is required to install smart meters at all regional interconnection boundary points by December 2026 to facilitate accurate measurement of energy flows. Additionally, NISO must monitor and document energy flow at power transformers in transmission substations and submit quarterly regional loss reports to the regulator. By July 2026, NISO is expected to present a plan aimed at reducing losses to within approved benchmarks, targeting a maximum of 6.5 percent by the end of the year. NERC emphasizes that these measures are designed to enhance transparency, improve infrastructure management, and ensure fair pricing across the electricity market. Accurate loss reporting is deemed crucial for boosting grid performance and reinforcing regulatory oversight.
In a separate initiative, NERC has also introduced the Mini-Grid Regulations 2026 (NERC-R-001-2026), which establish a new framework for the development, operation, and regulation of mini-grid systems, particularly in unserved and underserved communities. These rules apply to isolated mini-grids with capacities up to 5 MW and interconnected mini-grids linked to distribution networks with capacities of up to 10 MW. Mini-grids with capacities below 100 kW must be registered, while those exceeding 100 kW require a permit, which NERC has committed to processing within 30 business days. Reporting obligations vary based on size, with annual reports required for systems below 1 MW and quarterly reports for larger systems. NERC will conduct ongoing monitoring and may publish industry data to enhance transparency.
The regulator states that these new rules aim to encourage private investment, ensure safety, and protect consumers while accelerating rural electrification. Together, the transmission and mini-grid reforms are part of broader efforts to expand electricity access, strengthen regulation, and support sustainable energy development across Nigeria.
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