NERC Rolls Out New Rules to Reduce Power Losses, Boost Grid Efficiency

The Nigerian Electricity Regulatory Commission (NERC) has unveiled a new regulatory framework aimed at cutting electricity transmission losses and improving transparency within the country’s power grid.

The initiative, contained in Order No. NERC/2026/026, introduces stricter guidelines for monitoring and reporting Regional Transmission Loss Factors across Nigeria’s transmission network.

According to data from the Nigerian Independent System Operator (NISO), the national average transmission loss dropped from 8.71 per cent in 2024 to 7.24 per cent in 2025. Despite the improvement, the figure remains above the 7 per cent benchmark set under the Multi-Year Tariff Order.

NERC said the new directive is designed to bridge this gap and improve efficiency across the electricity market. The order, issued on April 8, 2026, officially takes effect from April 13, 2026, and is backed by provisions of the Electricity Act 2023.

In a statement posted on its official 𝕏 account, the Commission outlined key requirements under the framework. It directed NISO to install smart meters at all regional interconnection points by December 2026 to ensure accurate tracking of energy flows. The system operator is also required to measure and document electricity movement at transmission substations and submit quarterly reports on regional transmission losses.

Additionally, NISO must present a detailed action plan by July 2026 to reduce losses in line with approved limits. NERC has set a target of bringing transmission losses down to a maximum of 6.5 per cent across all regions by December 2026.

The Commission noted that the policy is aimed at improving transparency, strengthening monitoring systems, and enhancing overall grid performance. It stressed that accurate data reporting is essential for efficient operations and fair electricity pricing.

Alongside the transmission framework, NERC also introduced the Mini-Grid Regulations 2026 to support power supply expansion, especially in underserved communities.

The regulation provides clear guidelines for the development and operation of mini-grids. It covers isolated systems operating independently of distribution companies with capacities of up to 5MW, as well as interconnected systems linked to existing networks with capacities of up to 10MW.

Under the new rules, mini-grids below 100KW must be registered, while those above that threshold are required to obtain permits. NERC also stated that applications for eligible projects will be processed within 30 business days.

Reporting requirements have also been updated, with operators of mini-grids below 1MW expected to submit annual reports, while those above 1MW must file quarterly reports.

The Commission said it will maintain continuous oversight of the sector and may publish industry data to promote accountability.