Lagos State Governor Babajide Sanwo-Olu has reaffirmed his administration’s commitment to ending persistent power outages, by setting a target of increasing electricity supply to about 3.5 gigawatts (GW).
He spoke at the Lagos State High-Level Strategic Power town hall meeting held to examine the state’s electricity challenges and develop practical solutions to improve generation, transmission and distribution.
The engagement brought together key stakeholders across the electricity value chain, including regulators, distribution companies, transmission operators, investors, asset managers and representatives of the Federal Government.
Speaking at the event, Special Adviser to the President on Power and Chairman of the Presidential Task Force on Power Sector Reset and Restoration, Dr Rilwan Babalola, said the challenge facing Lagos and Nigeria was no longer simply about generating more electricity, but building a functional and sustainable electricity market.
Babalola said the country must move away from a system in which government continuously acted as buyer, guarantor and absorber of losses across the electricity value chain.
He said the proposed Clean Lagos Electricity Market (CLEM) could provide a model for converting Lagos’ huge electricity demand into a structured and investible market through demand aggregation, bilateral contracting, open access, payment assurance and transparent settlement.
He said the proposed initial 500MW CLEM project must first demonstrate that electricity could be reliably delivered, properly metered and paid for before the model was expanded.
Babalola said stakeholders must establish the location of demand and customers, sources of electricity and gas, the capacity of the network to deliver the power, appropriate tariffs and a transparent payment system for generators, network operators and gas suppliers.
He highlighted the opportunities created by the decentralisation of the electricity sector following constitutional amendments and the Electricity Act, which allow states to establish and regulate their electricity markets.
He, however, cautioned against fragmentation, stressing the need for coordination between state electricity markets, Nigerian Electricity Regulatory Commission (NERC), interstate electricity trading and national transmission network.
Lagos State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, said the town hall was convened to end what he described as the ‘culture of blackout’ in Lagos.
Ogunleye said the state had conducted studies and assembled critical stakeholders to identify the challenges affecting electricity supply and agree on practical solutions.
He disclosed that Lagos currently receives less than one gigawatt from the national grid, despite the Transmission Company of Nigeria (TCN) having the capacity to transmit about 3.5GW.
The commissioner said the state was working to secure an additional 2GW, with the ultimate objective of moving towards 3.5GW of electricity supply.
He said achieving the target would enable more electricity feeders to operate and improve power supply to homes, businesses and industries across the state.
Ogunleye added that newly-inaugurated substations would strengthen the state’s electricity infrastructure, while the government would work with distribution companies to monitor selected feeders and measure improvements in supply.
On electricity tariffs, he said consumers should not be made to ‘pay for darkness’, stressing that improved metering and infrastructure must accompany any tariff increase.
The Chief Executive Officer of the Lagos State Electricity Regulatory Commission (LASERC), Temitope George, identified inadequate generation and transmission capacity, energy theft, vandalism and non-payment of electricity bills as some of the major challenges confronting the sector.
George said electricity demand in Lagos, which had previously exceeded 1,500MW, had recently fallen below 1,000MW.
She urged consumers to pay for electricity consumed, warning that non-payment distorted the electricity market and ultimately affected the ability of other consumers to enjoy reliable supply.
The regulator also disclosed that the state was restructuring its existing Independent Power Projects to make them bankable without placing excessive pressure on government finances.
George said Lagos was also exploring embedded power generation to complement electricity from the national grid and reduce dependence on the national system.
She said the ongoing decentralisation of the electricity sector should lead to a more efficient electricity market in Lagos.