By Segun Ajayi
One of the things that makes Lagos State first among equals is her propensity to stand out from the crowd. It’s not by accident Lagos adopted the slogan, ‘Centre of Excellence’. And successive administrations in the state have been intentional in sustaining that legacy. Lagos leads while others follow, a position predicated on ingenious leadership it has benefited from over time. Aligned with that is an ambitious developmental framewwork the state is currently operating.
So, when a bill was signed into law two years ago that power generation and transmission be removed from the exclusive list in the Constitution to the concurrent, not a few Nigerians hailed the development. It came on the heels of an amendment to the Constitution which allows sub-nationals to generate, transmit, and distribute electricity in areas covered by the national grid. For Lagos State, it’s been a long wait for a constitutional nudge that would enable her fill the yawning gap created by the inadequacies of the grid system in meeting the state’s energy needs.
Flashback to the inception of the incumbent President Bola Tinubu as governor in 1999, Lagos State and a United Statespower company, Enron Power Nigeria Limited, signed an $800million deal to build a 5609-mw gas turbine power plant to supply electricity to Nigeria’s largest metropolitan area and commercial hub. It was an ambitious project estimated at N800 million. Hardly had the project taken off that the opposition by then Olusegun Obasanjo-led Federal Government resulted in its cancellation.
Almost 30 years down the line, another opportunity to liberate Lagos from epileptic national grid beckons. And the dynamic governor, Babajide Sanwo-Olu is not slacking on seizing the moment. The state government had initiated a robust electricity road map for a prospective 21st century economy like Lagos.
Coming from the threshold of history, the state government last month, invited bids for the construction of a 4,050 megawatts (MW) gas-fired power stations to fill a shortfall national grid supplies. With that, the state hoped to put an end to years of blackouts which have affected businesses and homes. Doesn’t it sound like broken record that Lagos, like her sister states is not insulated from major obstacles poor access to electricity poses to potential investors in Nigeria.
Coupled with that is the crucial provision of constant electricity to the fifth largest economy in Africa. But, although Lagos, with more than 20 million residents, requires 6,000 MW, it currently receives 2,000 MW from the grid, leaving a huge gap of 4,000 MW. Hopefully, government’s decision to remove electricity subsidy will attract potential investors hitherto, discouraged by “poor pricing of electricity”.
Going forward, the state government, under the auspices of the Clean Lagos Electricity Market Plan, has allocated four hubs for the construction of power plants. According to the plan by the state’s Ministry of Energy and Mineral Resources, the minimum expected generating capability for each of the four hubs is 500 MW. The energy will be generated by one or more generating firms and select companies will be required to arrange their financing on the basis of a power purchase contract with the state government.
Nigeria’s power infrastructure has capacity to generate 13,000MW of electricity but for the creaking grid which peaks at 5,000 MW. Even at that peak, power is not fully evacuateddue to weak transmission lines. Bedeviled by this chain of problems, the Nigerian Electricity Regulation Commission (NERC) began a process of reformation of the electricity sector. Pursuant to the powers conferred on it by Section 230 of the Electricity Act 2023, NERC issued orders for the transfer of regulatory oversight of the electricity market from NERC to the states’ Electricity Regulatory Commission (SERC).
Henceforth, the SERC will take over and regulate electricity market in their respective states. At the completion of the transfer of regulatory authority, the SERC will be empowered to grant licences and provide for regulatory frameworks for mini-grids, Independent Electricity Distribution Network/ Independent Electricity Distribution Network Operators, and Independent Electricity Transmission Network/Independent Electricity Transmission Network Operators within their respective states.
The transfer will empower Lagos SERC for instance, to regulate investment into electricity utilities within their states. The reform also had the purpose to create a competitive edge as state governments will be at liberty to implement the best investment policies to attract investors into electricity markets in their states.
Indeed, the project to light up Lagos is on course.
