NERC adopts new tariff tool for mini-grid regulation

The Nigerian Electricity Regulatory Commission has announced the formal adoption of the African Forum for Utility Regulators mini-grid Tariff Tool.

The commission announced the development in a statement posted on its official X handle on Friday.

“The Nigerian Electricity Regulatory Commission is pleased to announce the formal adoption and release of the African Forum for Utility Regulators mini-grid Tariff Tool,” the statement reads.

It said the tool, developed in partnership with AFUR and key stakeholders, “enhances the process of determining cost-reflective tariffs for mini-grid projects” to ensure fair and efficient pricing.

“The tool supports implementing the amended Mini-Grid Regulations 2023 by introducing new features such as Portfolio Applications, which allows developers to register multiple mini-grid sites under a single application,” the commission said.

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

“Furthermore, the AFUR mini-grid tariff tool is expected to be rolled out across 30 African countries in the coming years, bringing regulatory consistency to the mini-grid subsector and making it easier for project developers to operate across jurisdictions.”

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.

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 said it had built about 103 mini-grids across the country through the Nigeria Electrification Project initiative.

This development is expected to enhance the regulatory framework for mini-grids, contained in the amended Mini-Grid Regulations 2023 of the NERC.

This may also expect to enhance growth in the renewable energy sector and improve electricity supply in Nigeria if well implemented.