Lagos State, in its drive to ensure affordable and accessible power for its citizens in two years, has developed its electricity bill. The 21-part provision bill particularly highlights that it is now illegal for anyone in the value chain to supply electricity on estimated billing.
Speaking on Channels TV during the Morning Brief show, Biodun Ogunleye, the Commissioner for Energy and Mineral Resources, Lagos State, stressed that the Lagos State Electricity Bill 2024 targets creating and sourcing low-cost energy solutions through low-cost generation options.
Lagos aims to transition to more efficient systems with the new electricity bill. They will target areas where the electricity distribution companies (Eko and Ikeja DisCos) are not performing optimally and ensure servicing of those segments.
He said, “We will provide for additional players. Rather than have a big DisCo, we will have smaller retailers and resellers that can deal and contract across the board. Ikeja and Eko DisCo will continue to operate the network. The additional market participants will agree with the regulatory commission on where and how to deal with those opportunities.”
Commenting on the state’s plan to build five hubs, Ogunleye stated that the hubs are part of the partnerships coming in to help strengthen the market’s outcomes. According to him, additional generation capacity is necessary for the market to be successful and independent.
Stating the state’s plans for power generation, the commissioner explained that some of the deficiencies in the market today include the lack of industry-supporting infrastructure. Many components and maintenance are still being domiciled in foreign currency.
“Lagos wants to take advantage of the new transmission line infrastructure from Geregu by the Transmission Company of Nigeria (TCN), ensuring power in the substations to service their 132Kv network properly. According to him, this will affect the whole value chain, which will involve engaging with the federal institutions in a way that will ensure low-cost efficiency.
“TCN needs to be involved in actively engaging as a market participant, ensuring that the shortfalls in the last mile, especially regarding metering, are addressed. The law makes it illegal for anyone to supply electricity on estimated billing. Market participants, resellers, and sellers must ensure they abide by these rules on a household, feeder-by-feeder basis,” he added.
In addition, the bill makes provisions for Lagos State to build generation plants by opening the doors for investors who want to develop and leverage other generation plants to get power. He further stressed Governor Sanwo-Olu’s plan to make electricity affordable and available to all Lagos citizens.
Breakdown of Low-cost solutions
Fossil fuel energy generation is primarily driven by foreign currency-denominated gaps, which has made the cost of power expensive. This is why the state is sourcing means to attract low-cost solutions by:
- They are engaging more than 2GW of renewables. Renewables are a lot cheaper in terms of operating costs.
- They are targeting incentives for retailers to utilise local feedstocks that they can use to enable availability within their network.
- Developing a net-metering policy that allows industries and operations locked down overnight to sell to the grid. They will work with their local grid service providers and ensure they offload excess power supply (from whatever energy source) to the network through appropriate mechanisms.
- Closing the pipeline restriction gaps in servicing the power plants will ensure open access to assets dedicated to the provision of electricity, ensuring a free market environment.
- Closing the gaps in transmission by taking care of the 132Kv to 33Kv, ensuring sustainability. TCN is working in Lagos.
In summary, Lagos focuses on creating a competitive market through smaller players, injecting renewables within the network, encouraging participants to service customers efficiently, and making business more profitable. Beyond TCN, there is a need for other actions in the value chain. People will get value for money, know their local providers, and challenge their assumptions.