The Nigerian Electricity Regulatory Commission (NERC) has introduced two major regulatory changes aimed at reducing national grid inefficiency and accelerating rural electrification.
The first order on Transmission Loss Factor sets strategic targets to cut transmission losses, while the second establishes a comprehensive framework to license and integrate mini-grids for boosting electricity supply in unserved and underserved areas.
New Rules to Cut Transmission Losses
In the Order with No. NERC/2026/026, the Commission seeks to tackle persistent inefficiencies in the national grid.
It said the order is “to improve transparency and efficiency in Nigeria’s power grid through enhanced reporting of Regional Transmission Loss Factors (TLF).”
On the transmission loss reduction target, the national electricity regulator stated that while the national average TLF was 8.71 per cent in 2024 but was reduced to 7.24 percent in 2025 (exceeding the 7 per cent benchmark approved in Multi Year Tariff Order MYTO), the grid operators must reduce this to 6.5 per cent by December 2026.
It said that the Order, dated April 8, and takes effect April 13, 2026, is backed by provisions of the Electricity Act 2023, which empower NERC to regulate, monitor, and ensure efficiency in the electricity market.
The order said that the Transmission Company of Nigeria (TCN) must submit a detailed action plan by July 2026 for reduction of TLF to a value within the 7 per cent approved benchmarks in the regions, adding that the Nigerian Independent System Operator (NISO) must install smart meters at all interconnection points by December 2026 to ensure accurate, region-specific reporting.
The Commission further said the Order mandates NISO to “measure and document all energy flow of power transformers at transmission substations.
“NISO to file quarterly reports on TLF to NERC on a regional basis.
“TCN to file an action plan by July 2026 on the reduction of TLF to a value within the 7% approved benchmarks in the regions.
“TCN to ensure that TLF across transmission regions shall not exceed 6.5% by December 2026.”
The Commission added that the Order “is designed to strengthen accountability in transmission operations and support better grid performance through structured loss reporting.”
Framework for Mini-Grid Development
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To boost power access in underserved areas, NERC released the Mini-Grid Regulations 2026. The framework categorises systems as Isolated Mini-Grids and Interconnected Mini-Grids.
The Isolated Mini-Grids operate independently of the national grid, with capacities up to 5 Megawatts (MW), while the Interconnected Mini-Grids are usually linked to DisCo networks for coordinated operation, with capacities up to 10 MW.
Licensing and Compliance
For registration, the Order says systems under 100 Kilowatts (kW) require simple registration, while systems above 100kW must obtain a permit, processed within 30 business days.
The regulations require operators of systems under 1 MW to submit annual reports, while those above 1 MW must submit quarterly reports to ensure ongoing regulatory oversight.
These regulations signal a significant shift toward data-driven grid management and private sector-led rural electrification.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X
