▪The Lagos State government recently released a 40-page document titled “Lagos State Electricity Policy” that outlines the state’s plans to provide efficient electricity to residents.
▪The policy includes establishing a Lagos Electricity Market, encouraging the use of renewable energy, short-term plans, medium-term plans, long-term plans, investment prospects, and an efficient Off-Grid System.
▪Lagos State is the most populated state in Nigeria with a GDP larger than most countries on the continent.
Lagos State is home to over 20 million people, making it the most populated state in Nigeria. Available records show the state is the continent’s 5th largest economy, with a GDP larger than most countries on the continent. It is, therefore, not surprising that Lagos is the commercial capital of Nigeria, with more than half of the country’s industrial investments headquartered in the state. The state also accounts for most of the non-oil revenue in the country.
In times past, the Lagos State government have taken steps to improve electricity in the state but electricity generation under the purview of the Federal Government made it impossible. In 1999, the Lagos State Government under Bola Ahmed Tinubu signed a multi-million-dollar deal to distribute electricity to about 8 million residents of the state.
Despite its commercial potential, Lagos relies on electricity from the grid. In 2022, The Commissioner of the Lagos State Ministry of Energy and Mineral Resources, Olalere Odusote, announced that 80% of the electricity used in the state was from generators (off-grid).
In March 2023, a bill was passed to allow states to generate, transmit and distribute electricity in areas covered by the national grid. What this means is that states like Lagos can now generate electricity to complement what it gets from the national grid. A 40-page document titled LAGOS STATE ELECTRICITY POLICY released earlier highlights the state’s plan to increase and provide efficient electricity to residents. Let’s take a closer look at the document and its entailment.
IT PLANS TO ESTABLISH THE LAGOS ELECTRICITY MARKET
The policy identifies the need for a Lagos Electricity Market, which will ensure an increase in the quality and quantity of services to Lagos residents. It provides a deregulated market for electricity which will include several major players like the Transmission, Distribution companies, among others.
It will provide a framework and map for the private sector, commercial viability, service delivery, and others in the electricity sector. This policy also provides the constitutional, legal, regulatory, technical, and commercial foundations of the market.
IT WILL ENCOURAGE THE USE OF RENEWABLE ENERGY
The policy document noted that renewable sources of energy are crucial to not just the feasibility of the policy, but to the increased generation of power in the state. Lagos state gets approximately 16,000MW to push its economy and provide electricity to the state; of which 1000MW is from the grid, while 15000MW comes from off-grid (which includes a small percentage of renewable sources).
After the announcement giving states the power to generate electricity, Lagos State Governor, Babajide Sanwo-Olu through his verified social media platforms announced Lagos State’s plan for its off-grid strategy. He also noted the state’s commitment to increasing renewable energy usage in the state by announcing the state will be able to generate 1 gigawatt of solar energy by 2030.
SHORT TERM PLANS
In the short term, the policy within a one-year timeframe between 2021-2022 plans to implement a policy which will be detailed about the establishment and empower the Lagos State Off-Grid Electrification Agency and the Lagos Electricity Regulatory Commission. The short term is to provide a background to improving the efficiency and reliability of power supply in the state. It also includes licensing all electricity markets in the state to create a regulatory framework by December 31, 2022.
The medium-term includes a range of goals expected to take place between 2023-2028. It includes a fully operational Lagos Electricity Market which will be credible, commercially oriented, technically compliant, well-funded and financially feasible by 31 December 2023. Furthermore, an annual growth of at least 30 per cent and 75 per cent n the capacity and reliability of electricity in the state respectively; within 5 years’ electricity should witness growth from 1000MW and 12,00MW/h in 2022 to 4,500MW and 81,000MW/h by 2028.
While the state relies on off-grid plants located in the state, it aims to see a reduction in emissions from off-grid generators and move from distillate fuels to natural gas and renewable sources which will help climate change. Also, the introduction, implementation, and use of modern technology to deliver electricity to residents.
The policy also highlights the underserved and un-served areas in the state, with this, the government aims to implement the Lagos Off-Grid Electrification Agency which will deliver a minimum of 50MW and 1000Mw/h of new capacity annually to these areas. Also, Lagos State is a global force and leading innovation centre in the provision of electricity access to populations in megacities.
LONG TERM PLANS
with the short and medium-term goals implemented and achieved, the state expects that by the end of 2036, Lagos residents will have a reliable and constant power supply. Also, the electricity sector in the state will be diversified, sustainable and able to meet the demands of residents. Also, the electricity generated will be clean, and commercially viable and also promote sustainable economic growth and development.
One of the most important things for any industry or policy is investment opportunities. The policy highlights the state’s role through the Ministry of Energy and Mineral Resources to incentivize and provide an enabling environment for private sector investment. Investment in the Lagos Electricity Market will include a mix of sources such as international organizations, private investors, distribution companies, and Independent Power Producers, among others.
The Lagos State Government recognizes the heterogeneous nature of the state, Hence the need to further create an efficient Off-Grid System (OGS). The OGS since the start of the present administration of the state in 2015 has always been a part of the state’s THEMES agenda. The OGS will be coordinated through the Ministry of Energy and Mineral Resources to define a clear short, medium, and long-term goal; create maps, and clusters, among others for areas which will be best suited for OGS.
Note that the OGS will mostly serve rural areas which necessarily do not have access to electricity from the grid, thereby creating a cost-efficient model and ending the reliance on off-grid solutions like generators which asides from emission and environmental concerns, are also expensive.
The policy highlights the different key players in electricity in Lagos. With a Public-Private partnership in view, the public will play a major role in ensuring effective and efficient electricity is delivered to residents in the state. The government will mostly be in charge of policy implementation, monitoring and evaluation among others.
The key players from the government include the Lagos State Government, the Lagos State Ministry of Energy and Mineral Resource, the Lagos Electricity Regulatory Commission, the Lagos Independent System Operator, and the Lagos State Electricity Board. All key players highlighted have different roles to play in ensuring the targets and goals are met.
The policy also notes the state’s intention to drive Demand Side Management measures which will introduce and promote strategies to conserve energy and manage and regulate the amount of energy that is consumed during peak hours. It also seeks to achieve a reduction in the overall electricity demand. It will also seek to reduce electricity bills, energy efficiency and drive economic development.
This is an essential component of the policy. The state recognizes electricity demands are evolving and as such, there’s a need to make evidence-based decisions, evaluate the current system in place, identify the gaps and seek to improve.