LAGOS STATE MINISTRY

OF ENERGY AND MINERAL

RESOURCES

LAGOS STATE
ELECTRICITY
POLICY

PROVIDING UNIVERSAL AND RELIABLE

ELECTRICITY ACCESS TO OUR CITIZENS
 TABLE OF CONTENTS

Table of Contents 2
Governor’s Forward 4
Executive Summary 5

CHAPTER ONE

1.1 - 1.3 Introduction 7

1.4 - 1.6 The generation sector and natural gas 9
supply in Lagos
1.7 - 1.9 The transmission sector in Lagos 10 - 12
1.10 - 1.15 The distribution sector in Lagos 12 - 13
1.16 - 1.18 Lagos State 13 - 14
1.19 - 1.23 Lagos state Electricity supply challenge 14 - 15

CHAPTER TWO

2.1 - 2.2 Objectives 17

2.3 Short term objective 17
2.4 Medium term objective 17 - 18
2.4 Long term objective 18
2.6 - 2.7 Policy reviews and expected changes in 18
strategic objectives

CHAPTER THREE

3.1 - 3.3 Key requirements for establishing the Lagos 20

electricity market
3.4 - 3.6 An enabling constitutional/legal framework 20 - 21
3.7 - 3.9 Collaboration between the federal and state 21 - 22
government and with LASG
3.10 - 3.11 An autonomous and credible regulatory 22
entity
3.12 - 3.14 An integrated resource plan (IRP) 23
3.15 Competitive and transparent procurement of 23
resources

LAGOS STATE ELECTRICITY POLICY 2

 3.16 - 3.20 A bankable commercial framework 23 - 24 GOVERNOR’S FORWARD
3.21 - 3.24 Capable Licenses and market participant 25
3.25 - 3.27 An independent system operator (ISO) 25 - 26

Lagos State is the commercial viability of investments in emanating therefrom not

CHAPTER FOUR centre of the country with the Lagos State Electricity merely acceptable, but more
a considerable number of Market. The State Government importantly, the enablers of a
4.1 - 4.2 Moving towards a lower-carbon economy: 28 manufacturing and service will take direct responsibility better quality of life.
“off-grid” solutions (OGS), and demand industries. Lagos State for developing, growing, and
side management accounts for about 30% of regulating a Lagos Electricity I look forward to seeing this
the national GDP and 50% Market as prescribed in the major initiative of the State
4.3 - 4.8 Off grid solutions 28 - 29
of the non-oil GDP. This 1999 Constitution (amended). Government produce good
4.9 - 4.11 Demand side management 30
is powered by less than results for our people and in
1,000 Megawatts (MW) of Our aspirations, as espoused advance, thank all the citizens
CHAPTER FIVE electricity supply from the in the forthcoming Lagos State and residents of Lagos for
national grid delivered to the 30-year Development Plan giving us yet another chance
5.1 Policy-making, regulatory and executive 32 two electricity distribution (2021 – 2051), will be a mirage to be of service to you.
institution companies (Discos) in the without the availability of a Working with you and for you,
5.1.1 The Lagos state government 32 State. In reality, Lagos is reliable electricity sector. The we will together make Lagos
dependent almost entirely on desire for the achievement of State a 21st Century Economy.
5.1.2 The Lagos state ministry of energy and 32
a fleet of no less than 15,000 universal electricity access in
mineral resources
MW of back-up generator the State is a collective one DATED AT IKEJA THIS 19th
5.1.3 The Lagos electricity regulatory commission 32
capacity fuelled by expensive in which all stakeholders from DAY OF OCTOBER 2021
5.1.4 The Lagos independent system operator 32 and heavily polluting the Federal Government to our
5.1.5 The Lagos state electricity board 32 distillates like fuel oil, petrol people at the grassroots must BABAJIDE SANWO-OLU
and diesel. No progressive recognize their respective GOVERNOR
CHAPTER SIX and modern economy in roles and commit to acting in
the world has thrived in the good faith.
face of such combination of
6.1 - 6.3 Conclusion 36
electricity inadequacy and On behalf of the State
supply imbalance. Government, I am grateful
APPENDIX ONE 37
to all those who have
“Making Lagos A 21st Century engaged in providing
APPENDIX TWO 37 Economy”, a key component feedback to the State
of our T.H.E.M.E.S. agenda, is Government as we went
strategically aimed at growing through the consultation
the critical sectors in the State process leading to this
which is only possible with Policy document. I
reliable access to electricity. expect that the
citizens and
Lagos State has resolved residents of
to drive a new Policy and the State will
Strategic Framework that find this Policy
will significantly improve the and the Law

3 LAGOS STATE ELECTRICITY POLICY LAGOS STATE ELECTRICITY POLICY 4

EXECUTIVE SUMMARY

Lagos, in addition to being the commercial estimated 45,000MW of off-grid generators Government support for market
centre, is the most populous state in Nigeria. It in Nigeria is located within Lagos State alone. growth/customer satisfaction.
is home to one of the largest megacities in the Lagos has continued to witness a continuous 3) an autonomous, credible
world and is growing each minute. The State flow of new residential, commercial, and regulatory body.
is very important to the survival of a non-oil industrial developments and investments. 4) an integrated resource plan.
dependent Nigeria. It is home to Nigeria and As it tries to manage its evolution into a 21st 5) competitive and transparent
Sub-Saharan Africa’s most important financial century economy, with the attendant need to procurement of generation
centre outside Johannesburg, South Africa and meet urban planning standards and satisfy resources.
is home to the two most important seaports the demand for various social amenities and 6) a bankable commercial
and domestic and international airport hubs economic opportunities, the State needs to framework.
in the country. Lagos State would be the fifth establish the enabling environment for an 7) well-funded, well-managed
largest economy in Africa if it were a country. electricity market that supports the huge generation, transmission, and
This makes Lagos a major centre for both demand that this growth generates. This distribution players.
domestic and international trade as well as Lagos market must be separate from the 8) an Independent System Operator.
labour mobility. national electricity grid, but also be connected
with and complementary to the latter. Lagos This Policy articulates the vision of LASG on the
Energy supply is currently the single biggest cannot rely on the national grid alone for its necessary constitutional, legal, engineering,
infrastructure and developmental challenge in long term, sustainable socio-economic growth and commercial foundations for creating a
the State. Lagos depends entirely on Nigeria’s and significant growth in the standard of living viable sub-national electricity sector that
national grid for its public electricity supply, as of its citizens. caters fully to the needs of its citizens, while
does the rest of the country. Through its two enabling significant socio-economic growth
resident electricity distribution companies A major challenge the State must contend and development both for Lagos State and
(Discos) – Eko and Ikeja – it receives just about with is the highly skewed ratio between public the country at large.
1000MW for an average of no more than electricity supply and highly expensive, highly
12 hours daily, i.e., 12,000 megawatt-hours polluting, and economically inefficient off-
(MWh), for a population exceeding 27 million grid generators that actually powers Lagos
spread over a compact land mass. State. Several requirements are critical to
implementing a holistic solution that delivers
The uneven supply across the State for no clean, adequate, and reliable electricity supply
more than half a day, on average, makes off- within the geographical territory of the State
grid generators, self-generated electricity and to all its demographic/customer classes.
critical to socio-economic activity despite These include:
being extremely costly and environmentally
unfriendly. The Lagos State Electricity 1) an enabling constitutional and
Board (LSEB) conducted research in 2014 legal framework.
that demonstrated that 15,000MW of the 2) collaborative Federal and State

5 LAGOS STATE ELECTRICITY POLICY LAGOS STATE ELECTRICITY POLICY 6

 » 1.1 statutory corporation to take over the various
generation projects around the country.
Lagos has historically been the location for The generation projects were to be linked
“firsts” in electricity development in Nigeria; via a newly built transmission network and
the first ever electricity generating set, the the energy distributed to customers all over
first streetlights and first electric lamps in the country. This was followed by the Niger
the country were installed in Lagos in 1896 Dams Authority (NDA) in 1964, established to
at the site of what is now the Eko Electricity oversee the construction of a hydroelectric
Distribution Company Limited’s headquarters plant at Kainji on the River Niger.
at Marina. These occurred even before
Nigeria came into being. The Nigerian » 1.3
Electricity Supply Industry (NESI) has since
gone through several evolutions leading to its The supply of electricity to Lagos by ECN
present status. continued until 1972 when NEPA was created.
Supply into Lagos State was provided through
» 1.2 NEPA’s Lagos Zone, which evolved into
today’s Eko and Ikeja Electricity Distribution
After over 50 years of various piecemeal Companies (Discos) that were established
arrangements, the Electricity Corporation of following the enactment of the Electric Power
Nigeria (ECN) was established in 1951 as a Sector Reform Act, 2005.

CHAPTER ONE
INTRODUCTION

LAGOS STATE ELECTRICITY POLICY 8

The Generation Sector and The Transmission Sector in
Natural Gas Supply in Lagos Lagos

» 1.4 industrial and generation customers in the » 1.7 companies (Gencos) at 3 sites, Egbin,
Western part of the country. At the moment, Olorunsogo and Papalanto, Lagos State has
There is a single grid-connected generating the ELPS system has the additional capacity Electricity transmission in Lagos State is just Egbin Power Plc but constitutes the
plant within Lagos State as of today; this is to transport at least another 1bcf (enough undertaken by the Transmission Company of Region’s largest single largest sub-market in
the 1,320MW Egbin Power Plc. In keeping with to deliver at least 3,500MW of generation Nigeria (TCN). TCN holds two separate licenses the country, with four of Lagos Region’s five
the central dispatch operation of Nigeria’s capacity) to existing and prospective Gencos from the Nigerian Electricity Regulatory sub-regions and thirty-three (26 x 132kV and
single electricity market, energy from Egbin and IPPs in and around Lagos State. Commission (NERC) under which it operates 7 x 330kV) of its thirty-eight sub-stations
is delivered to the national grid from where two separate businesses. The Transmission dedicated entirely to the State.
some of it is transmitted back into Lagos. » 1.6 Services Provider (TSP) responsible for the
construction and maintenance of the 330kV » 1.8
» 1.5 Apart from the prospects of natural gas and 132kV transmission grid, comprising
supply to Lagos State via from ELPS, the transmission towers, lines, switchyards, TCN’s 4 Sub-Regions and 33 substations
Nigeria is dependent on natural gas to provide Nigeria LNG Limited has recently announced and substations. Even though TSP’s Lagos in Lagos State and their respective
more than 75% of its daily supply from the that it has signed contracts for the supply of Transmission Region covers five generating transformation capacities are:
national grid. Today, all gas thermal plants, liquefied natural gas to the Nigerian domestic
including Egbin, connected to the national grid gas market. While this is an exciting prospect,
are supplied with gas by Nigeria Gas Marketing it will be difficult to translate this into a steady
Company’s Escravos – Lagos Pipeline System and sustained commercial reality without
REGION SUB-REGION SUB- SUB- SUB-
(ELPS). The ELPS recently doubled in capacity a market, such as Lagos State, creating the
STATION STATION STATION
from 1bcf to a 2bcf system that supplies opportunity for it.
VOLTAGE CAPACITY
RATING(MVA)

LAGOS Ajah Ajah 132kV 280

Lekki * 120
Alagbon * 340
Akoka * 85
Amuwo-Odofin * 160
Apapa Road * 60
Ikorodu * 280
Oworonshoki * 150
Sub-total sub- 1,475 MVA
region 132kv
capacity

Akangba Akangba 132kV 360

Ilashe-Island * 30
Ijora * 135
Ilupeju * 105
Isolo * 105
Itire * 70
Ojo * 120
9 LAGOS STATE ELECTRICITY POLICY
REGION SUB-REGION SUB- SUB- SUB- REGION SUB-REGION SUB- SUB- SUB-
STATION STATION STATION STATION STATION STATION
VOLTAGE CAPACITY VOLTAGE CAPACITY
RATING(MVA) RATING(MVA)
Sub-total sub- 925 MVA Ikeja-West Ikeja-West * 1050
region 132kv Oke-Aro * 600
capacity
Sub-total sub- 1,650MVA
Egbin Egbin 132kV 30 region 330kv
Ikorodu * 280 capacity
Maryland * 180
Odogunyan * 240 GRAND TOTAL 3,960MVA
REGION 330kV
Sub-total sub- 925 MVA CAPACITY IN
region 132kv LAGOS STATE
capacity
Ikeja-West Alausa 132kV 135 » 1.9 Power Sector Reform Act, 2005 did not
Sub-Region Alimosho * 230 change the unitary structure of the NESI.
Ayobo * 120 1.9 The second transmission licence is Rather, it simply took the NEPA organisational
Ejigbo * 300 for System Operations. This concerns the structure and corporatized it. Each Zone of
Ogba * 165 safe operation of the transmission grid and NEPA’s Distribution Department became an
Oke-Aro * 120 the movement of energy across this grid incorporated company.
Sub-total sub- 1070 MVA from Gencos to Discos and large (or eligible
region 132kv customers) in accordance with the Grid Code. » 1.11
capacity System Operations has a National Control
Centre at Oshogbo and a Regional Control Each company thus created covered a number
GRAND TOTAL 4,200 MVA Centre at Ikeja-West that serves the entirety of States; and was responsible for providing
REGION 132kV
of Lagos State and parts of Ogun and Oyo every aspect of electricity distribution business
CAPACITY IN
LAGOS STATE States. from wires to customer care within those
States. Lagos State was, however, treated
LAGOS Ajah Ajah 330kV 450 differently. Due to its large population and
Alagbon * 300 The Distribution Sector in sophisticated customer base, two Discos were
Lekki * 300
Lagos created in 2006 to serve the State. These are
Sub-total sub- 1,050 MVA Eko Electricity Distribution Company Limited
region 330kv (Eko Disco) and Ikeja Electricity Distribution
capacity » 1.10 Company Limited (Ikeja Disco).

Akangba Akangba * 960

In 1972, Decree N0. 24 was promulgated » 1.12
Sub-total sub- 960 MVA to merge the distribution and generation
region 330kv activities of ECN and NDA under one Eko Disco serves 1,500km2 in the southern
capacity corporate umbrella, National Electric Power part of Lagos, extending from Epe LGA in the
Egbin Egbin * 300 Authority (NEPA), thereby creating a single East to Badagry LGA in the West and as far
electricity market for the country. The reform north as Mushin LGA, an area with an estimated
Sub-total sub- 300 MVA
region 330kv of the sector introduced by the Electric population of 8m – 10m people. It serves over
capacity
LAGOS STATE ELECTRICITY POLICY 12
585,000 connected customers in 3 “Circles”, nominal capacity to receive and distribute (which is entirely privately operated) and is curtailed and made costlier for decades.
themselves subdivided into 10 “Districts”. The that much capacity through their networks. strategically located with land, air and sea Industries have been forced to resort to
EKEDC network is supplied from 2 of TCN’s connections to markets in the central and expensive off-grid generators, which makes
4 Lagos Sub-Regions and 12 of TCN’s 38 » 1.15 western Africa region, Europe, the Americas their products uncompetitive with imported
Lagos transmission sub-stations. The Disco and the rest of Nigeria. Lagos has also been goods. Consequently, many establishments,
aggregates total transformation capacity of A study by the Lagos State Electricity Board the first choice for investors within and into particularly multinationals, have had to leave
2500MVA. During the 2013 privatisation, the (LSEB) in 2014 reported that Lagos State Nigeria since long before independence. Lagos State or even Nigeria entirely. Those that
60% core investor interest in the Disco was aggregates total off-grid generator capacity have remained, particularly small and medium
acquired by West Power and Gas Limited, approximately 15,000MW, clearly indicating a » 1.17 scale businesses that would ordinarily employ
comprising a group of private investors with level of demand currently beyond the capacity the largest number of Lagosians, have been
varied energy sector experience. of the two Discos. This is still the case today, Lagos State also accounts for over 53% compelled to self-generate electricity. The
perhaps even more so. In an increasingly of manufacturing employment in Nigeria, consequent adverse effects are even more
» 1.13 distributed market and with the two Discos which alone contributes to 7% of national significant taking into account that many
unable to serve a fraction of demand with GDP. Manufacturing industries in Lagos small business persons are women and young
Ikeja Disco covers a larger population of Lagos little more than 12 hours of supply daily on State include food, beverages and tobacco, people for whom the difference between
State, approximately 17m people in an area average, socio economic activity in Lagos chemicals and pharmaceuticals, rubber and staying in business and losing their livelihoods
about 2,077 km2 in size in the northern LGAs State is powered by its fleet of power back-up foam, cement, plastic products, basic metals, is the availability of reliable electricity supply.
of the State. The Disco operates a network that generators and renewable energy systems. steel and fabricated metal products, pulp, and
serves over 1,300,000 connected customers paper products, electrical and electronics, Lagos State’s Electricity
via a network comprising 87 x 33kV feeders, textile manufacturing, furniture and wood
Supply Challenge
272 x 11kV feeders, 72 injection substations Lagos State products, motor vehicles and miscellaneous
and over 14,000 distribution substations. The assembly. Overall, manufacturing contributes
Ikeja Electric network is supplied via another 2 29.6% of the GDP of the Lagos State. However, » 1.19
of Sub-Regions of TCN’s Lagos Region and 17 » 1.16 industrial capacity utilization in Lagos has
of its Sub-Stations. As with Eko Disco, in 2013, hovered for over a decade below 50%, Eko and Ikeja Discos together receive less
60% equity was transferred in a privatisation Lagos State is the commercial and financial indicating huge potential for growth. The than 12,000MWh (12,000,000kWh) daily
sale to a core investor group controlled by the services capital of Nigeria and one of Africa’s primary reason for this underutilization is not from the national grid. On the other hand,
NEDC/KEPCO Consortium. few megacities. It houses the headquarters of the absence of markets but the poor supply running 15,000MW of back-up capacity for
all major financial service providers, corporate of electricity to the State. The Manufacturers another 12-hour daily average, is equivalent to
» 1.14 organisations and NGOs in Nigeria. Nigeria’s Association of Nigeria estimates that its 180,000MWh (180,000,000 kWh) of energy.
diplomatic community, despite moving to members in Lagos experience a daily average This would mean that only 6.25% of the
In spite of the significant nominal or nameplate Abuja, still maintains a significant presence in of 6 power outages, with only about 4 hours demand in Lagos is provided by the national
transformation capacities that TCN has in Lagos. With a population just under 27 Million, of electricity supply of uncertain quality. grid. When we compare a grid cost of ~N50/
Lagos State, the sum total of generation the State is ranked as having the fifth largest kWh and a diesel generator cost of ~N130/
capacity centrally dispatched into Lagos economy in Africa with a GDP of over $91 » 1.18 kWh, this means that Lagosians pay at least
State from the national grid has rarely been Billion (2014 estimate), over 20% of Nigeria’s an additional N14.4 billion (Fourteen billion,
more than 1000MW on a typical day, over an $420 Billion GDP. The State hosts over The growth of Lagos as a powerhouse of four hundred thousand Naira) daily or N5.3
average 12 hours daily. For a population just 2,000 industries and about 65% of Nigeria’s finance, trade, and industry not only in Trillion (Five trillion, three hundred billion) per
under 27 million this is grossly inadequate. commercial activities. It is also the location Nigeria but in Africa has happened during year for electricity. This is money that could
TCN has enough capacity to take up to a of Nigeria’s two largest and busiest seaports the past 2 decades without universal access be invested or spent of more productive use
further 2,500MW of capacity into Lagos State and its busiest international and domestic by citizens to publicly available, reliable and with a part of it captured by the Federal and
through its 132kV transmission network in airport terminals. Lagos features a relatively affordable energy supply. Commercial and State Governments as tax revenue. These are
the State. In turn, both Discos also have the good infrastructure stock, particularly in ICT industrial activity have been significantly also direct revenue losses to the two Discos

13 LAGOS STATE ELECTRICITY POLICY LAGOS STATE ELECTRICITY POLICY 14

that could have been reinvested in delivering financial and economic losses, combine to
additional capacity and savings to customers. make the case for reform of the electricity
The losses to both State and national sector in Lagos State extremely urgent.
GDP are significant and manifest in low
manufacturing capacity utilisation, attendant » 1.22
under-employment and unemployment and
the massive socio-economic dislocation that Finally, there is the reality that socio-economic
they cause, high rates of crime, poor health activity in Lagos State, particularly from its
and education outcomes, low public sector 15,000-MW fleet of petrol-, diesel- and fuel
productivity, low fiscal/ tax collection rates, oil-burning off-grid electricity generators,
etc, not to mention the issues of national produces a very significant amount of
security that affect both Lagos and Nigeria. environmentally damaging emissions. As a
signatory to the 2016 global protocols on
» 1.20 climate change and with the 26th Conference
of Parties scheduled to hold in November
The State Government, in its 2014 report, 2021, we see the increasingly strident calls to
“Future Proofing Cities: The Lagos Energy impose limitations on the use of natural gas to
Sector, Risk and Opportunities for Resilient fuel electricity generation and transportation
Growth of the Lagos Energy Sector” projected as a warning and a call to dramatically increase
that demand for that year in Lagos was a total its natural gas utilisation before it is too late.
of 9,574MW, with 69% being residential and Naturally, this means a geometric increase
31% commercial/industrial. This projection in electricity generation, which cannot
was expected to grow to 29,212MW by 2030. happen without multiple efficient electricity
This was set against a backdrop of a projection distribution markets, rather than the extremely
that the national grid would, by 2015, have inefficient single electricity market Nigeria has
20,800MW available for supply to the country, today.
33,500MW by 2020 and 55,350MW by 2030.
Suffice to say that the national grid is nowhere » 1.23
near close to these meeting these projections
and demand for electricity in Lagos State This Policy sets out the State Government’s
continues to grow by the day. proposals on increasing the quantity and
quality of the energy delivered to residents
» 1.21 of Lagos State via a Lagos Electricity Market.
This current state of affairs was anticipated In other words: this policy maps a path to
in the 2014 Report, which noted that assure Lagos State residents of “electricity
“intervention may be needed at State level” reliability”, a phrase defined here as electricity
to meet the State’s electricity demands. It that is available to any customer in the State
has become clear that decisive intervention is Electricity Market in the desired quality and
indeed needed in the State and immediately. quantity, at the time it is needed with an
The apparent imbalance in sources and
quantities of electricity supply, the inability
adequate reserve margin, growing at a rate
faster than population growth.
CHAPTER TWO
to meet demand and their attendant massive OBJECTIVES

15 LAGOS STATE ELECTRICITY POLICY

» 2.1 entities in Lagos State no later than 31st located in the State. factors such as technological innovation and
December 2022; and commercial developments in international
This Policy seeks to provide to Lagosians and 2.4.6 The adoption of the cleanest, and domestic electricity markets. Other
the wider public full clarity as to the perspective 2.3.3 Delineate the LEM from the national commercially viable modern technologies to key factors to consider are climate change
of the State Government regarding the size electricity market by 31st December 2022. deliver electricity to residents of the State and the constant evolution in environmental
of the prospective Lagos Electricity Market, using diverse and secure sources of energy. management policy and practice, feedback
the stakeholders and players in this Market, from consumers, citizen groups, investors and
2.4.7 The implementation by the Lagos Off- capital providers and input from within the
their respective roles, and the constitutional,
Medium Term Grid Electrification Agency of a sustainable State Government itself.
legal, regulatory, technical, and commercial
foundations of this prospective Market. These programme for delivering a minimum of
must all fit together to form a fully functional, » 2.4 50MW and 1000MW/h of new capacity and » 2.7
steady, and reliable framework that provides energy per annum to the unserved and under-
universal access to electricity to all residents of Lagos State’s medium-term objectives (2023 served areas of the State; and The MEMR will establish channels of
the State. Considering that the sector is largely – 2028) for its electricity market are: communication with various stakeholders
owned, operated, and funded by the private 2.4.8 The development of Lagos State as and groups within and outside the State
sector, and the State Government’s conviction 2.4.1 To commence shadow trading of the a major global centre for innovation in the Government and the State, to enable feedback
that the private sector is the primary engine commercial and technical framework of the provision of electricity access to populations to be given and discussed. This feedback will
of growth, it only stands to reason that this LEM by 30th June 2023. in megacities. be used to adjust in policy execution as often
Policy (and the Law that will implement it) are as is necessary. In addition, the Ministry will
clearly be seen to enable and deepen private 2.4.2 To commence full commercial LEM Long Term (Post 2028) organise Electricity Policy Review workshops
sector investment. operations (credible, commercially-sound, no less than once every five years and the
technically compliant, well-funded, financially outcomes therefrom will be processed and
» 2.2 viable) by 31st December 2023; » 2.5 inputted into the Policy to produce subsequent
editions of the Policy.
Accordingly, this Policy will provide a path to 2.4.3 Establish the Market with a clear focus In the long term, the State Government
attaining a number of primary objectives: on ensuring minimal adverse environmental expects that by 31st December 2036, there will
impact and minimal recourse to Lagos State be a reliable supply of electricity in the Lagos
Government subsidies or guarantees. Electricity Sector deploying the most efficient
Short Term generation technologies and providing clean,
2.4.4 A minimum of 30% year-on-year growth adequate and constant access to all citizens
in capacity and 75% reliability (average 18 without general recourse to off-grid generator
» 2.3 hours of supply daily) 5 years from 2023 capacity.
with growth in peak energy traded in Lagos
Short term objectives (2021 – 2022) include: State from 1000MW and 12,000MW/h Policy Reviews and
2.3.1 Enact a comprehensive electricity law
daily in December 2022 to 4,500MW and Expected Changes in
81,000MW/h (including a 15% reserve margin)
by June 30, 2022 to implement the policy by June 2028.
Strategic Objectives
principles detailed herein and establish an
empowered Lagos Off-Grid Electrification 2.4.5 A significant reduction in off-grid » 2.6
Agency and a Lagos Electricity Regulatory generator emissions and the fostering of
Commission. a natural gas market in Lagos through This Electricity Policy is necessarily dynamic.
implementing a programme to transit from As the years go by, its stated objectives
2.3.2 Establish a regulatory framework for, distillate fuels to natural gas and renewable and the methods for attaining them will be
and license, all relevant electricity market sources to fuel the off-grid generator fleet reviewed and updated to take account of key

17 LAGOS STATE ELECTRICITY POLICY LAGOS STATE ELECTRICITY POLICY 18

 » 3.1 An Enabling Constitutional/
Electricity is increasingly becoming an
Legal Framework
unbundled, decentralized service for good
reason and this global trend is clearly
» 3.4
irreversible. Having pioneered electricity
sector reform on the continent by unbundling
A viable, State-focused electricity system
its single State-owned electricity company
starting in 2001, it is antithetical that the cannot be established without a proper legal
country remains a single electricity market, framework. This is provided by Sections 13
despite having in place the constitutional, and 14 of the Concurrent Legislative List, Part
demographic, social and economic conditions II, Second Schedule to the 1999 Constitution.
for continuing the unbundling of its single Section 13 provides: “13. The National Assembly
national electricity market to its logical may make laws for the Federation or any part
conclusion. thereof with respect to-

» 3.2 (a) electricity and the establishment of electric

power stations.
It is also clear that as with other successful
jurisdictions like Lagos with a significant
(b) the generation and transmission of
base of private sector activity, electricity, as
electricity in or to any part of the Federation
a manufactured commodity, is best provided
and from one State to another State.
within an organised, orderly market, by
private sector players; recognising always that
there must be special focus on providing the (c) the regulation of the right of any person
same universal access to the vulnerable and or authority to dam up or otherwise interfere
disadvantaged population at the base of the with the flow of water from sources in any part
societal pyramid. of the Federation.

» 3.3 (d) the participation of the Federation in any

arrangement with another country for the
Eight factors may therefore be considered generation, transmission and distribution of
as key requirements for a viable Lagos electricity for any area partly within and partly
Electricity Market (LEM). These are: 1) an outside the Federation.
enabling constitutional and legal framework;
2) collaborative Federal and State
(f) the regulation of the right of any person
Government support for market growth/
or authority to use, work or operate any plant,
customer satisfaction; 3) an autonomous,
apparatus, equipment, or work designed for
credible regulatory body; 4) an integrated
the supply or use of electrical energy.
resource plan; 5) competitive and transparent
Section 14, in turn, provides: “14. A House of
CHAPTER THREE procurement of generation resources;
6) a bankable commercial framework; 7) Assembly may make laws for the State with
respect to:
KEY REQUIREMENTS FOR ESTABLISHING well-funded, well-managed generation,
transmission and distribution players; 8) an
THE LAGOS ELECTRICITY MARKET Independent System Operator. Each of these (a) electricity and the establishment in that
is discussed below: State of electric power stations.

LAGOS STATE ELECTRICITY POLICY 20

(b) the generation, transmission, and Collaboration between Federal Government to establish a transitional enables market participants to
distribution of electricity to areas not covered arrangement with unambiguous milestones transact with each other on a
by a national grid system within that State;
the Federal and State for passing specific regulatory responsibilities willing seller/willing buyer basis.
and Governments and within from the Federal to the State regulator. The 3) ensure safety, reliability and quality of
LASG various FG MDAs the State Government will service in the movement of electricity
(c) the establishment within that State of any engage with include the Office of the Vice- within the Lagos electricity market.
authority for the promotion and management President, the National Council on Privatisation/ 4) license participants in the State
of electric power stations established by the » 3.7 Bureau of Public Enterprises, the Central Bank electricity market.
State.” of Nigeria, the Nigerian Electricity Regulatory 5) with the ISO, undertake market
The 1999 Constitution makes clear that retail Commission (NERC), Federal Ministry of surveillance and monitoring; and
» 3.5 electricity markets (the distribution sector) Power, Nigeria Bulk Electricity Trading (NBET) 6) perform other activities that promote
are the responsibility of the States; and Limited, the Nigerian Electricity Management the efficiency and reliability of the
It is noted that Paragraph 3.1.3 of the National the National Electric Power Policy clearly Services Limited (NEMSA) and the Federal Lagos Electricity Market.
Electric Power Policy, 2001 defines the role of anticipates that there will be State electricity Competition and Consumer Protection
States in the Nigerian Power Sector thus: markets. The Federal Government has hitherto Commission (FCCPC). » 3.11
exercised regulatory responsibility by default,
“The State Governments will carry out their including over the distribution sector that is » 3.9 The State electricity law will uphold the
responsibilities for the development of off-grid constitutionally the exclusive responsibility of regulator’s autonomy in its decision making,
electrification and their joint responsibilities the States. Lagos State is now taking on its Within the State Government, existing MDAs funding, the appointment of its leaders and the
with the Federal Government on the electricity responsibilities and it is expected with key roles to play in the creation of a operation of its daily functions. The key tools
establishment of power stations as set out in that there will be an organised transition functional electricity market include the Lagos for these, which the law will also mandate and
the 1999 Constitution. The State role will also of responsibility for electricity operations State Environmental Protection Agency, the enable, are consultative public participation,
include regulation of off-grid non-centrally from the national electricity regulator to the Lagos State Consumer Protection Agency, access to non-governmental funding for
despatched electricity operations, which are State electricity regulator. This effectively their sector Ministries, the Ministry of Finance the substantial part of its operations, the
wholly limited within the State boundaries.” means that electricity distribution entities, and the Ministry of Budget and Economic recruitment and continuous training of leaders
independent electricity distribution networks Planning. and management staff, and, very importantly,
» 3.6 (IEDNs), captive generators, embedded curtailing the scope for political interference.
generators and non-grid scale renewable
An Autonomous and These are the vital enablers of accumulating
Reading these constitutional provisions along energy licensees focused entirely on the the competence and experience that are
Lagos market, will be transited to regulation Credible Regulatory Entity
with the National Electric Power Policy, it the primary safeguards of the regulator’s
becomes apparent that all electricity market by the LASG-established regulator. It is also existence and credibility.
operations, including generation, transmission anticipated that the FG, through NERC, will
continue to regulate cross border or wholesale
» 3.10
and distribution carried on entirely within a The regulator will act with competence
State, that are outside the instructions of the electricity trading, that is, generation and and autonomy and focus on designing
An autonomous and credible regulatory body
Nigerian Electricity System Operator, are “off- transmission across the Lagos State border. and fostering an efficient energy market in
will enable the State to fulfill its desire to have
grid” operations. Such off-grid operations are a robust state electricity supply system. The Lagos State and ensuring delivery of quality
the responsibility of State law and regulation. » 3.8 wholesale and retail service between players
regulatory agency will:
1) approve the competitive procurement and customers. The regulator will also have
This Policy is not proposing, and does not to deal with various cross-cutting issues that
of entities to provide generation ade
envisage, dual regulation of entities by both require collaboration with other State MDAs,
quacy for the State in accordance with
Federal and State electricity regulators. At particularly in the areas of environmental
the IRP discussed above.
all times, there will be only a single regulator protection and remediation and consumer
2) ensure a tariff methodology reflective
– Federal or State – for any relevant activity. protection.
of an efficient operating process and
The State Government will engage with the

21 LAGOS STATE ELECTRICITY POLICY LAGOS STATE ELECTRICITY POLICY 22

An Integrated Resource Plan implementation will be overseen by the fuel suppliers, on a mutual, not-for-profit basis of the State will consider the ability of the
State electricity regulator, until such a time that guarantees its full transparency and non- targeted end consumers to pay for services
(IRP) as an independent system operator (ISO) is preferential operations. to forestall financial debts or shortfalls in the
established for the State electricity market, market.

» 3.12 at which point the ISO will take over custody » 3.17
of the plan and oversee the execution of its » 3.19
processes. Given the steady progression towards
The Lagos Integrated Resource Plan (IRP)
decentralisation and the increased use of The bankability of this commercial framework
will outline a framework to meet future
electricity demand in the State by establishing
Competitive and technology in providing energy services to is based on revenue streams derived via a

the availability of fuel and electricity Transparent Procurement of customers, there will be significant scope tariff methodology founded on the following
for the further disaggregation of distribution basic principles:
generation resources available within the Resources
services within the State. All such services,
State and ensuring that these resources
depending on their sophistication and capital/ 3.19.1 Transparent generation procurement
are transparently allocated to credible and
capable private sector players who will then » 3.15 management requirements will be subject to processes.
some form of licensing. Licensing processes
deliver energy into the Lagos Electricity
A competitive and transparent framework for will be simple, automated, and efficient. The 3.19.2 Consistent and apolitical response to
Market. Implementing the Plan requires the
procuring new generation capacity based on relationships between players in the Market macroeconomic signals.
deployment of power system planning tools
projections made in the IRP will be mandated will be governed by a set of typical industry
with the objective of determining the least
by the State Regulator. The procurement codes and guidelines established by the 3.19.3 Willing buyer-willing seller transactions
cost method of meeting all identified demand.
of new generation will in turn be a major regulatory body via a consultative process. in every sector of the Lagos electricity market
It will also consider the wide range of supply-
factor in determining end-user tariffs by the The Market will also have an industry- from fuel supply through generation and
and demand-side resources, their potential
contracting buyers and sellers, based on their led dispute resolution mechanism that transmission to distribution (wholesale and
means of deployment, the constraints to such
different transaction cost components. Such emphasizes alternative dispute resolution. retail).
deployment and their financial, economic, and
willing buyer-willing seller negotiations will These essential elements will be provided for
environmental impact with regard to meeting
in turn be guided by the tariff methodology in the State electricity law and the focus will 3.19.4 Competition in the generation and
projected future energy needs.
established by the Regulator. be to establish a commercially and financially distribution retail sectors, although probably
viable and technically sound LEM into which not in the wires business; and
» 3.13
A Bankable Commercial entry is via a simple, uncomplicated licensing
mechanism, with most of the energy consumed 3.19.5 Accounting separation between each
Lagos State commenced the process of Framework by customers being based on willing buyer/ business segment of the Market
developing its IRP in H2 2022 with the
willing seller transactions.
support of the USAID Power Africa Nigeria
Power Sector Program (PA-NPSP). The State » 3.16 » 3.20
now has a draft IRP, which will be refined and
» 3.18
The Lagos Electricity Market (LEM) will be The methodology or methodologies by
updated. A completed plan will be issued and
owned and operated substantially by the Also important to the success of the LEM is which electricity tariffs in the State are to
adopted as a foundational document for the
private sector under a commercial framework, the need to identify clusters of credit worthy be determined will be established following
establishment of the Lagos Energy Market by
also guided by the IRP and the State tariff wholesale and retail end-customers that will consultations undertaken by the regulatory
Q4 2021. The IRP will thereafter be regularly
methodology. TCN will be encouraged to buy electricity from the Market. Provision body. These consultations will also identify
reviewed in line with regulations to be issued
incorporate its transmission network in the would be made for sustainable arrangements those vulnerable and less economically viable
by the Regulator to ensure that it remains
State under a separate corporate entity that for funding either or both capital and recurrent segments of the market that will benefit from
relevant to the needs of Lagosians.
would seek and obtain a transmission licence costs of providing access to vulnerable or capital cost support measures implemented
economically under-privileged citizens. For by the LSEB or its successor agency.
» 3.14 from the State regulator. The Lagos ISO,
when established, will also be owned by all the sound financial health of the LEM, the IRP

The IRP will be in the custody of, and its market participants, possibly including key

23 LAGOS STATE ELECTRICITY POLICY LAGOS STATE ELECTRICITY POLICY 24

Capable Licensees and State and will be subject to the approval by both in sources of supply and grid connections
the State regulator under procurement rules to deliver supply to customers will in turn create
Market Participants established by the latter. The nature of the ISO a need for a State-based independent system
is outlined below. operator (ISO). In any of these scenarios, an
» 3.21 ISO is vital to the efficient, non-discriminatory
» 3.24 scheduling and dispatch, as well as the
The Lagos Electricity Market will have at reliable and timely administration of trading
least six sets of players: fuel suppliers (likely The envisaged rules on energy efficiency and settlement systems based on contracts
natural gas suppliers), generation companies, and the control of emissions from the State’s between multiple generation, transmission,
a transmission entity, an independent system huge fleet of off-grid generator sets and the and distribution market participants.
operator (ISO), distribution entities and prospect of multiple IPPs locating in and
electricity trading companies. Each of them, around Lagos State mean that increasing » 3.27
individually, must be capable of playing their quantities of natural gas will be required year-
part in the LEM; which means that they must on-year in a market whose growth will be The opportunity therefore arises for all market
be well-funded and competently managed. steadily progressive and exponential and will participants in the Lagos Electricity Market to
It is likely that natural gas suppliers, whilst not plateau in the foreseeable future. establish a mutually owned independent entity
they are not to be directly regulated by the to develop relevant market rules and apply
Regulator, will have a key role in the Market An Independent System them in directing the flows of bulk electricity
and equivalent cash amongst these market
and therefore, membership of key electricity Operator (ISO) participants. The Lagos ISO will also manage
stakeholder groups, by virtue of which they will
have the responsibility to support compliance the State electricity market’s connection with
with relevant electricity industry codes and the national grid; especially given the future
» 3.25
regulations. prospect of traders located inside Lagos State
buying from IPPs outside the State. The ISO,
Apart from the envisaged increase in natural
» 3.22 being mutualized and not-for-profit, will be
gas-fired generation in the State from both
empowered to take responsibility for systems
onshore and offshore resources, there are also
Given the State’s relatively small physical planning and the competitive procurement of
prospects for electricity supply from grid-
footprint and its substantially built-up nature, bulk electricity and ancillary services for least
scale and (perhaps in future) home-based
a number of IPPs may be located outside the cost trading of electricity in the State under
renewable energy systems. These potential
State but sell their output directly into the the Lagos IRP.
sources of supply create the prospects
Lagos electricity market. This wholesale cross- for developing multiple generation and
border trade will be regulated under rules transmission connections in and around the
established by NERC but once the energy so State to receive bulk energy from IPPs and
traded arrives in the Lagos electricity market, move them to customer clusters within the
its retail, by State-licensed distribution entities, State.
will be based on commercial and technical
rules established by the State electricity » 3.26
regulator.
As new bilateral PPAs are agreed and existing
» 3.23 ones are expanded under the IRP, new and
expanded transmission grid capacity will be
The Lagos IRP will be implemented by the required to receive and deliver increasing
ISO in consultation with stakeholders in the amounts of energy. The prospective expansion

25 LAGOS STATE ELECTRICITY POLICY LAGOS STATE ELECTRICITY POLICY 26

 » 4.1 still significant populations in various areas
within the State that are underserved or even
As Lagos State’s population continues to unserved by the existing national grid and
grow and the State itself continues along the who have no access to, or cannot afford the
inevitable road towards mass urbanization, cost of maintaining off-grid generators. The
its energy needs will also continue to grow. draft Lagos IRP load forecast estimates that
Just as it is impossible to ignore the global 31% of households in Lagos were connected
demand for economies to deploy policy tools to the national grid in 2020 based on the total
in lowering their carbon emissions/footprint,
number of registered customers. This implies
so also is it apparent that the State cannot
that currently, 69% of households in Lagos
continue to depend for its energy needs
are effectively unconnected or off-grid. The
on the fleet of distillate-burning off-grid
load forecast also assumes that the highest
generators that are the true baseload source
of electricity in the State. The demand on the number of registered customers in Lagos as
State Government, therefore, is to develop at 2019 are residential customers (1,294,448)
policy options and tools that contribute to compared to those in the commercial
meeting the demand for access to electricity (341,582) and industrial (6,323) customer
while steadily lowering in real terms the classes. These numbers demonstrate that it
carbon emissions that meeting this demand would take an inordinately long time to get
generates. Lagos State’s 27 Million residents, particularly
those in the unserved and under-served
» 4.2 households to be grid connected even before
taking demographic growth into account.
Today, Lagos State’s electricity needs are met
by approximately 16,000MW of electrical
» 4.4
capacity comprising 1000MW from the grid
(and in turn, this is supplied approximately
Many unserved and under-served areas of the
25% by hydroelectric and 75% by natural gas
State aggregate sufficient demand but are
thermal plants). On the other hand, the other
15,000MW – the off-grid generator fleet that perceived as being “unviable” or unable to
really drives Lagos forward – is powered almost afford service. According to a Power for All
entirely by distillate fuels, with a very small Report , the cost of a single grid connection
percentage being generated by renewables is about $2,500. On the other hand, a typical
and an even smaller percentage being natural Solar Home System project typically costs
gas-fired. This vividly illustrates the extent of less than $100 per connection which can
work that is yet to be done in significantly be delivered within a matter of hours, with
reducing carbon emissions generated in the an extensive reach constrained only by the
State from this activity. availability of technical personnel, project

CHAPTER FOUR Off-Grid Solutions

management capacity and capex funding.
Furthermore, although mini grid projects are
MOVING TOWARDS A LOWER-CARBON more expensive, they are faster and cheaper
than grid extension projects as they typically
ECONOMY: “OFF-GRID” SOLUTIONS (OGS), » 4.3 cost about $500 per connection with a delivery
AND DEMAND SIDE MANAGEMENT timeline of about 4 months. (Power for All
Regardless of the significant stock of Report (2016) Decentralized Renewables: The
generation capacity in Lagos, there are Fast Track to Universal Energy Access.)

LAGOS STATE ELECTRICITY POLICY 28

» 4.5 that would be best suited for the utilization of
OGS Demand Side Management Strategy and Plan that:

In Lagos, where issues of poverty reduction, (DSM) 4.11.1 Defines the State’s short-, medium-
social equity and inclusion are critical, OGS 4.7.3 Articulates the role of the State in
and long-term DSM program targets and
presents solutions that enable the delivery of incentivizing and providing the enabling
environment to catalyse private sector » 4.9 incentives.
clean energy access to the people, particularly
investment in creating an OGS ecosystem.
to the poor and vulnerable. Very importantly, 4.11.2 Articulates the role of the State
The State Government will promote strategies
OGS also offers the prospect of cost-effective, in incentivizing and creating an enabling
4.7.4 Establishes a Lagos State Off-grid to conserve energy and reduce overall demand
fast, and cleaner means of electricity for the environment to encourage the DSM measures.
Electrification Agency as the executing agency for electricity (particularly during identified
SMEs that are the backbone of the State’s
for the State OGS Strategy and Plan working peak periods). These DSM measures are
economy. Effectively deployed, OGS can play with relevant State, Federal Government 4.11.3 Defines the role of key stakeholders in
expected to benefit all stakeholders – Lagos
a significant role in catalysing job creation and MDAs and private sector players. the implementation of the policy.
residents, electricity utilities, and the society
socio-economic development.
at large; reduce electricity bills, reduce the
4.7.5 Provides a basis for developing 4.11.4 Outlines a process to periodically
overall electricity demand, improve reliability,
» 4.6 education, research, sensitization, consumer identify the gaps between current and target
reduce public electricity expenditure, and
protection, and capacity building programmes levels, develop action plans on how, when, and
improve economic development.
OGS also offer a cost-efficient way to improve for OGS in the State. by whom the gaps will be addressed.
the resilience and independence of public and
4.7.6 Sets out regulatory principles applicable » 4.10
social infrastructure, which is a key element 4.11.5 Establishes priority activities to be
of this Administration’s T.H.E.M.E.S. agenda. to OGS and e-waste in the State.
Electricity supply has remained inconsistent, implemented annually.
From 2015 till date, Lagos State, with funding
4.7.7 Promotes gender and social inclusion unreliable, and inadequate thus far, and
support from the UK Government under 4.11.6 Ensures a DSM program monitoring
in driving electricity access; large commercial and industrial users are
the Solar Nigeria Programme, has powered system for data collection and track impact.
largely self-supplying. Nevertheless, supply is
172 schools and 11 rural primary health care
4.7.8 Recognizes OGS as a vital component expected to grow, and the State Government
centres in the State via off-grid solar systems. 4.11.7 Incorporates DSM in the State’s
of the State IRP; and will establish and drive the implementation of
In addition, off-grid solar systems were Integrated Resource Planning and Data
measures designed to encourage residents of
deployed to public health centres and medical 4.7.9 Provides a Monitoring & Evaluation gathering.
the State to modify levels, patterns, timing, and
laboratories during the COVID-19 pandemic (M&E) framework to track the implementation quantities of electricity that they consume;
by the private sector and government. These of the State OGS Strategy and Plan, and 4.11.8 Assigns responsibility for the
such that the cost of growing the Lagos
existing programmes will be expanded, and attainment of the State’s OGS objectives. specification, collection, storage, maintenance,
Electricity Market becomes more efficient and
new ones will be initiated in an institutional and supply of relevant DSM data, according to
reliable.
and structured manner. » 4.8 the requirements of the IRP and international

The OGS Plan will identify all unserved or » 4.11 standards; and
» 4.7
underserved areas and communities of the
The Ministry of Energy and Mineral Resources 4.11.9 Provides for annual reviews, audits
The Ministry of Energy and Mineral Resources State by name and identify the OGS most likely
will be the coordinating authority for DSM and reporting to the DSM programs including
to be cost-effective in serving each identified
will be the coordinating authority for OGS their costs and benefits (including targets and
area or community. It will also discuss the schemes in the State and develop a State DSM
schemes in the State. It will and develop a achievements).
nature of incentives that may be provided
State OGS Strategy and Plan that:
to these areas and communities and the
operators that wish to undertake connections
4.7.1 Defines the State’s short-, medium-, to these communities; identify the key players
and long-term targets for OGS. in implementing the Plan and the roles they
will be expected to play either on their own or
4.7.2 Maps areas, communities and clusters in collaboration with the Lagos State Off-grid
Electricity Agency.
29 LAGOS STATE ELECTRICITY POLICY
 » 5.1 objective will be the creation of a credible, rules-
and contract-based electricity market for the
The key public sector institutions in the Lagos State into which capable, well-managed, well-
Electricity Market and their roles are: financed entities are incentivised to enter and
remain. To this end, the State Government will
5.1.1 The Lagos State Government: seek out and appoint well-qualified citizens as
The three arms of Government in the State Commissioners and staff of the Regulator and
will provide a platform for the coordination of provide them with enough financial, physical
policies by the Executive, the making of laws and training resources to enable them settle
by the Legislature and subsidiary legislation down quickly to their very important tasks.
by the regulator. The Judiciary will continue to
play its established role in interpreting relevant 5.1.4 The Lagos Independent System
laws and resolving disputes involving market Operator: The nature of the Lagos ISO has
participants that are properly brought before also been discussed previously in Paragraphs
it. The Judiciary will also exercise jurisdiction 3.25 – 3.27. The Lagos State Government,
in adjudicating all cases of electricity theft, through the Ministry of Energy and Mineral
malpractice, and other criminal matters under Resources will foster the establishment of the
the enabling Law to be enacted hereafter. ISO by creating a unit that will take custody
Special arrangements will be made by the of its draft IRP already prepared and design
Ministry of Energy and Mineral Resources, the various processes and the technical and
working with the State Ministry of Justice commercial frameworks for establishing the
and the Lagos State Police Command to Lagos ISO.
focus directly and sharply on electricity-
related crimes and ensure their immediate 5.1.5 The Lagos State Electricity Board
prosecution. (LSEB): The LSEB is the implementing
agency under the Lagos State Ministry of
5.1.2 The Lagos State Ministry of Energy Energy & Mineral Resources responsible for
and Mineral Resources: the State’s independent power project and
The Ministry will lead the Executive Branch role, public lighting programmes. Its 1980 enabling
and represent the State, in policy development Law also confers on it the power to undertake
in all aspects of electricity, energy and their generation, transmission and distribution
related issues. In addition, the Ministry will have of electricity to areas not covered by the
supervisory responsibility for the Lagos State national grid system within Lagos State. The
Off-grid Electrification Agency and manage Law to implement this Policy will re-establish
the relationship between the Executive and this entity and focus it particularly on working
the State House of Assembly in the latter’s with stakeholders to bring electricity access
exercise of its oversight responsibility. to the unserved and underserved areas Lagos
through a State Electrification Fund that

CHAPTER FIVE 5.1.3 The Lagos Electricity Regulatory

Commission: The nature and regulatory
it will custody and deploy via transparent
procurement process. This successor agency
POLICY-MAKING, REGULATORY AND responsibilities of the Lagos electricity will also continue to maintain focus on the

EXECUTIVE INSTITUTIONS regulator have been discussed in Paragraphs LSEB’s historical responsibility for public
lighting.
3.10 – 3.11 above. The Regulator’s primary

LAGOS STATE ELECTRICITY POLICY 32

33 LAGOS STATE ELECTRICITY POLICY
 » 6.1 directions across the State border. The LEM
will enable the location of more electricity
This Lagos State Electricity Policy details the generation companies using various
Lagos State Government’s strategic intent technologies within the State, the construction
for assuring universal reliable electricity of both low and high voltage transmission
supply to the residents of Lagos State. The lines across the State and the establishment
framework described here will be more of an ISO for Lagos State. It will also develop
particularly enacted in a law that identifies a commercial framework to enable energy
key stakeholders in the market and defines trading between generators and distribution
their roles in delivering service to residents entities within the State. Such a policy/legal
of Lagos State. It will also establish the key framework will be the reference point for
elements of the commercial framework in operations, financing and related activities in
which electricity procurement and market the Lagos electricity market.
operations are to be carried out. In addition,
the Law will provide for a standard regulatory » 6.3
framework for enabling participation and
operations in the market as well as enhancing This Policy will serve as a key enabler for Lagos
and protecting consumer rights. Furthermore, State’s aspiration to become an advanced
the Law will outline the methods for enabling economy by driving the achievement of
universal access to electricity by the unserved universal access to reliable and affordable
and underserved population in the State electricity in the State. This will improve
through the State Electricity Fund that it will the ease of doing business and boost the
establish under the custody of the LSEB. economic growth of the State. We look
forward to the unqualified support of all
» 6.2 relevant stakeholders as we seek to realise the
laudable objectives of this Policy together.
The Lagos Electricity Market (LEM) will be
independent of, but also connected with, the ENGR. OLALERE ODUSOTE

national grid system particularly regarding HON. COMMISSIONER

MINISTRY OF ENERGY AND MINERAL RESOURCES
cross border electricity trading in both
LAGOS STATE GOVERNMENT

CHAPTER SIX
CONCLUSION
APPENDIX ONE

These TCN sub-stations deliver energy into the

EKEDC network through 42 x 132/33kV trans-
formers. These in turn feed energy through 87 x
33kV feeders comprising 50 underground and
37 overhead feeders. These 87 feeders supply
104 x 33/11kV transformers across 52 injection
substations. These 104 transformers feed into
300 x 11kV feeders. Delivering energy directly
to customers from these 387 33kV and 11kV
feeders are are 9,079 x 11kV/0.415kV distribu-
tion transformers and 1601 x 33/0.415kV dis-
tribution transformers. The Disco’s total 415v
line length is almost 8,000km. The current
reported total transformation capacity of the
EKEDC network is 1,537.5MVA (approximately
1,230MW of capacity).

APPENDIX TWO

TCN’s Ikeja-West and Egbin Sub-Regions

deliver a total transformation capacity of
2,375MVA via 17 TCN 132kV/33kv transmission
sub-stations. 89 33kV feeders, comprising
of 21 underground and 68 overhead feeders
supply 33/11kV power transformers across 113
injection substations. 281 11kV feeders are en-
ergized for onward downstream power distri-
bution. There are 16,412 11/0.415kV distribution
transformers and 1,302 33/0.415kV distribu-
tion transformers served by Ikeja Disco, with a
total line length of almost 37,000km. The to-
tal transformational capacity of the 11/0.415kV
and the 33/0.415kV distribution transformers
are 3,499.9MVA (4,200MW) and 991.9MVA
(1,190MW) respectively.

37 LAGOS STATE ELECTRICITY POLICY