Electricity: NERC adopts new tariff for mini grids

Electricity: NERC adopts new tariff for mini grids

The Nigerian Electricity Regulatory Commission (NERC) has announced its formal adoption of the African Forum for Utility Regulators (AFUR) mini-grid Tariff Tool,  “to ensure fair and efficient pricing”.

In a statement the NERC issued on its official X page on Friday, it was noted that the tool was developed through a collaboration between the commission and the AFUR, as well as other key stakeholders in the energy sector.

The AFUR mini-grid tariff tool supports the implementation of the amended Mini-Grid Regulations 2023 and would enhance the process of determining cost-reflective tariffs for mini-grid projects.

The commission further noted that the tool has new features such as Portfolio Applications, “which allows developers to register multiple mini-grid sites under a single application.” 

“This simplifies processes, fosters efficient regulatory oversight, and benefits from economies of scale, helping to reduce end-user tariffs for mini-grid projects,” it added.

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According to the commission, the adoption of this tool is expected to bring regulatory consistency to the mini-grid subsector, making it easier for project developers to operate across jurisdictions.

The tool, which is set to be rolled out across 30 African countries in the coming years, is expected to reduce end-user tariffs for mini-grid projects, promoting affordable and reliable electricity access.

NERC has mandated all mini-grid developers to start using the AFUR mini-grid tariff tool to file permit applications at the Commission from Monday, December 16, 2024.

About Mini-Grids

A mini-grid is a small-scale, local energy grid that provides electricity to a specific community, village, or group of consumers.

It is typically designed to operate in isolation from the main national grid and to serve a limited number of consumers.

Mini-grids are often built to explore renewable energy sources such as solar,  wind, hydro, and biomass.

Experts say the development of mini-grids will help mitigate Nigeria’s power crisis, especially as the national grid suffers persistent breakdowns.

Last year, the Rural Electrification Agency (REA) said it had built about 103 mini-grids across the country through the Nigeria Electrification Project (NEP) initiative.

Electricity: NERC adopts new tariff for mini grids