The paper presents a model of hopping conductivity at direct and alternating current, developed on the basis of the quantum phenomenon of electron tunnelling between neighbouring potential wells. The tunnelling takes place between neutral potential wells, resulting in an electrical dipole and additional thermally activated polarisation. An important parameter of the model is the time of existence of the dipole (relaxation time). After this time, the electron with the probability p can hop to the third well, which causes a direct current flow, or return with the probability (1 − p) to the first well, thus causing the flow of high frequency current. The model shows that for direct or low frequency current, the current density and conductivity do not depend on the frequency. In the high frequency region, the current density does not depend on the frequency either. Low-frequency conductivity is 2p times smaller than high-frequency conductivity. In the transitional region there is a frequency dependence of the current density. A formula was derived for the dependence of the relaxation time on the distance between neighbouring potential wells and temperature. The dependence of the hopping probability on activation energy, potential dipole energy and temperature was determined. A model of hopping conductivity at direct and alternating current was used to analyse the experimental frequency dependence of conductivity and permittivity of the composite of electrotechnical pressboard, mineral oil and water nanoparticles. It was found that there is a high compatibility of the experimental course with the model. It was also found that in the composite of electrotechnical pressboard, mineral oil and water nanodrops there are at least two mechanisms of changes in low frequency and high frequency conductivity. For the low-frequency stage, the value of the probability of p1 ≈ 0.2 and the relaxation time τ1 ≈ 0.02 s. The probability of hops for the high-frequency growth stage is p2 ≈ 0.0005 and the value of relaxation time τ2 ≈ 2 × 10−7 s. The occurrence of two episodes of increase in conductivity is related to the presence in the composite of electrotechnical pressboard, mineral oil and water nanoparticles of differences in distances between neighbouring nanoparticles. For a large number of nanoparticles randomly distributed in the percolation channel, the distribution of the probability of the occurrence of the distance is in a good approximation normal. This means that in the percolation channel there are pairs of neighbouring wells, the distances between which are both much smaller than the average and much larger. A pair of wells, the distance between which is smaller than medium, participates in the conductivity on the high-frequency stage with a short relaxation time. On the other hand, a pair of neighbouring wells for which the distance is greater than average causes a high resistance to DC or low-frequency current flow as well as a higher relaxation time. On the basis of the dependences designated in laboratory tests of low-frequency conductivity (10−4 Hz) from the moisture content, using the elements of quantum mechanics, the dimensions of water nanoparticles in electrotechnical pressboard impregnated with mineral insulating oil were determined. It was found that nanoparticles contain on average about 200 molecules of water, and their diameters are about 2.24 nm. This approach allowed to calculate the dielectric permittivity of cellulose and to determine that water nanoparticles are located inside the cellulose fibres.Graphical abstract