The Lagos State Government is seeking to turn its huge electricity demand into a bankable market capable of attracting investment in generation and distribution, as the government targets about 3.5 gigawatts to tackle persistent power shortages across the state.

🇳🇬 Here's What Happened

The plan was discussed on Thursday at the Lagos State High-Level Strategic Power Town Hall, where government officials, regulators, electricity operators and investors examined why the state continues to receive less than one gigawatt from a national grid capable of transmitting considerably more.

The gap between available supply and Lagos’ electricity needs formed the central concern of the meeting, with officials arguing that simply adding generation capacity would not resolve the problem without a functioning system for contracting, delivering, metering and paying for electricity.

The Special Adviser to the President on Power and Chairman of the Presidential Taskforce on Power Sector Reset and Restoration, Rilwan Babalola, said Lagos now had an opportunity to demonstrate what a commercially viable electricity market could look like under Nigeria’s emerging decentralised power regime.

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He said the proposed Clean Lagos Electricity Market would initially test a 500MW model built around aggregating demand, contracting directly with power suppliers, guaranteeing payment and allowing electricity to move through an open-access network.

“We are no longer just talking about generating more electricity. We are talking about creating a market that works,” Babalola said.

He said 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.

Among the questions the proposed market must answer, he said, were where demand was concentrated, who the customers were, where the power and gas would come from, whether existing networks could carry the electricity and what tariff would make the system commercially sustainable.

The proposal comes as Lagos seeks to exploit new powers available to states under the Electricity Act and constitutional changes that permit sub-national electricity markets.

Babalola, however, warned that state-level regulation should not create isolated electricity systems, saying Lagos would still need to coordinate with federal regulators, the national transmission network and interstate electricity trading arrangements.

📰 Source: Punch Nigeria