LASG targets 3.5GW power supply, seeks private investment

The Lagos State Government is actively seeking private investment to transform its substantial electricity demand into a bankable market, targeting an ambitious 3.5 gigawatts to combat chronic power shortages. This strategic plan was a central theme at the Lagos State High-Level Strategic Power Town Hall, where government officials, regulators, and industry players discussed the persistent gap between the state's needs and the less than one gigawatt currently supplied by the national grid.

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We are no longer just talking about generating more electricity. We are talking about creating a market that works.

Officials emphasized that merely increasing generation capacity will not solve the problem without a robust system for contracting, delivering, metering, and ensuring payment for electricity. Rilwan Babalola, Special Adviser to the President on Power and Chairman of the Presidential Taskforce on Power Sector Reset and Restoration, highlighted Lagos's opportunity to pioneer a commercially viable electricity market within Nigeria's evolving decentralized power framework. He proposed the "Clean Lagos Electricity Market," initially testing a 500MW model focused on aggregating demand, direct contracting with suppliers, payment guarantees, and utilizing an open-access network.

Babalola cautioned against premature scaling of the initial 500MW phase, stressing the need to first prove that customers can be identified, electricity delivered and metered, and all participants paid transparently. Key questions for the proposed market include identifying demand concentration, customer bases, power and gas sources, network capacity, and establishing a commercially sustainable tariff. This initiative leverages new powers granted to states under the Electricity Act, allowing for sub-national electricity markets, though Babalola warned against creating isolated systems and stressed the need for coordination with federal regulators and the national grid.

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The first 500MW phase should not be scaled prematurely, arguing that Lagos must first establish that customers could be identified, electricity delivered and metered, and generators and other participants paid transparently.

Commissioner for Energy and Mineral Resources, Biodun Ogunleye, detailed the scale of the deficit, noting Lagos receives under 1GW from the national grid despite its transmission capacity of around 3.5GW. The state is pursuing an immediate goal of an additional 2GW, which would enable more distribution feeders to operate and improve electricity availability for households and businesses.

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Lagos currently receives less than 1GW from the national grid, despite the Transmission Company of Nigeria having the capacity to transmit about 3.5GW.