Expert Urges Lagos to Unlock Idle Captive Power to Ease Energy Crisis

Lagos, Nigeria's economic powerhouse, is sitting on a paradoxical energy crisis, according to energy expert Odion Omonfoman. While the national grid falters, delivering a mere fraction of the power needed for over 200 million Nigerians, thousands of megawatts of captive power lie dormant behind factory walls, in hotel basements, and within gated estates. Omonfoman argues that this unused energy represents a significant policy failure and a missed opportunity.

The scale of this untapped resource is staggering. A Lagos State-backed study revealed that only about 20 percent of the state's electricity demand is met by the national grid. Meanwhile, household generators alone are estimated to provide between 7.3GW and 8.8GW, with a vast majority of households and MSMEs relying on them. This reliance comes at a brutal economic cost, with households spending an estimated N1.43 trillion annually on fuel, and commercial users an additional N5.3 trillion.

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The real scandal is not the inadequate public supply. It is that we have allowed vast installed private captive generation capacity to remain trapped behind the fence line, unavailable to the wider market even when their owners do not need all of it.

Omonfoman's critique focuses on the economic irrationality of this situation. He points out that many generators are drastically underutilized; a factory might install a 2MW generator but only use 1MW for much of the day. This excess, readily available power is currently wasted, even as small and medium-sized enterprises (SMEs) struggle with unreliable and expensive electricity. Unlocking this captive power, he contends, could revolutionize Lagos's energy landscape and boost its economy, provided the state government reforms its electricity market rules to facilitate its integration.

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A factory might install a 2MW gas generator to handle its peak load, but for 60 per cent of the day, it may only need 1MW. That excess 1MW — clean, synchronised, and ready — is currently wasted. In a city where SMEs are dying for lack of affordable and reliable electricity, this underutilization is economically irrational.