NERC Adopts AFUR Mini-Grid Tariff Tool to Enhance Electricity Access

By DAYO ADESULU

The Nigerian Electricity Regulatory Commission (NERC) has formally adopted the African Forum for Utility Regulators (AFUR) Mini-Grid Tariff Tool, marking a significant step toward improving electricity access and affordability in Nigeria.

In a statement shared on its official X (formerly Twitter) handle on Friday, NERC highlighted that the tool was developed in collaboration with AFUR and other key stakeholders. It is designed to streamline the determination of cost-reflective tariffs for mini-grid projects, ensuring fair and efficient pricing mechanisms.

Key Features and Benefits

According to NERC, the tariff tool supports the implementation of the amended Mini-Grid Regulations 2023 by introducing several new features:

• Portfolio Applications: Developers can register multiple mini-grid sites under a single application, simplifying regulatory processes and fostering economies of scale.
• Reduced End-User Tariffs: The tool leverages efficiencies to lower costs, promoting more affordable electricity for consumers.
• Cross-Border Consistency: Over the next few years, the tool is expected to be rolled out across 30 African countries, creating regulatory consistency and easing operations for project developers across jurisdictions.

Mandatory Usage and Implementation Timeline

NERC has mandated that all mini-grid developers begin utilizing the AFUR Mini-Grid Tariff Tool to file permit applications starting from Monday, December 16, 2024. This initiative is expected to modernize Nigeria’s regulatory framework for mini-grids and bolster renewable energy development.

Understanding Mini-Grids

Mini-grids are small, localized energy grids designed to provide electricity to specific communities or groups of consumers. Operating independently from the national grid, they often harness renewable energy sources like solar, wind, hydro, and biomass.

In Nigeria, mini-grids have been identified as a critical solution to the nation’s power challenges, especially as the national grid continues to experience frequent breakdowns. The Rural Electrification Agency, through its Nigeria Electrification Project initiative, has already established around 103 mini-grids nationwide.

Implications for Nigeria’s Power Sector

The adoption of the AFUR Mini-Grid Tariff Tool aligns with NERC’s broader goal of enhancing regulatory oversight while promoting growth in the renewable energy sector. By enabling fair pricing and simplifying processes, the tool is expected to:

• Expand electricity access to underserved and remote communities.
• Improve reliability and affordability of electricity supply.
• Foster greater participation in Nigeria’s renewable energy market.

NERC’s emphasis on collaboration with stakeholders, including the National Identity Management Commission and the National Population Commission, further underscores its commitment to ensuring a robust and inclusive framework for mini-grids.

A Path to a Sustainable Future

If effectively implemented, the adoption of this tariff tool could significantly mitigate Nigeria’s electricity crisis, empower local communities, and accelerate the transition toward sustainable energy solutions.