The State government has disclosed that households and businesses are increasingly turning to private electricity generation as persistent power supply challenges continue to undermine economic activities, with an estimated 4.5 million fossil-fuel generators powering homes, offices and businesses across the state.
The staggering figure, disclosed by the State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, underscores the depth of the electricity crisis confronting Africa’s most populous city, where the national grid reportedly meets only about 20 per cent of the state’s electricity demand.
The development has further exposed the enormous cost of unreliable public power supply to businesses and households, many of which have been forced to depend on petrol and diesel generators to keep their operations running.
Speaking at a panel discussion on Urban Renewal, Regeneration and the Transformation of Older Cities, Ogunleye cited a 2024 study conducted by Sustainable Energy for All in collaboration with the Lagos State Government, which estimated that about 4.5 million fossil-fuel generators were operating in the state.
The study also put annual carbon dioxide equivalent emissions from the generators at approximately 39 million tonnes, highlighting the environmental consequences of Lagos’ dependence on private electricity generation.
Describing unreliable electricity as an invisible constraint on urban productivity, the commissioner argued that the widespread use of generators had created an expensive parallel energy infrastructure, with residents and businesses bearing additional costs to compensate for the inadequacies of the national grid.
“The generator is not merely a backup device; at scale, it becomes an expensive parallel urban infrastructure system,” he said.
Ogunleye advocated a transition from what he described as a generator-powered district, characterised by high fuel costs, noise, pollution and unreliable electricity, to a serviced urban environment supported by dependable networked electricity and shared infrastructure.
He stressed that reliable electricity infrastructure must be developed around existing residential, commercial and industrial communities rather than treated as an isolated investment.
As part of efforts to address the challenge, the commissioner identified the Victoria Island Power project, which has a planned embedded generation capacity of 40 megawatts and a 12.6-kilometre dedicated underground feeder network, as one of the initiatives expected to improve electricity supply to businesses in the commercial district.
He also disclosed that the Akute independent power plant, an existing but dormant facility with 26MW of base contracted capacity, was scheduled for rehabilitation under a concession agreement in 2026 to provide electricity for public services.
The commissioner traced the institutional framework for Lagos’ electricity market reforms to the Lagos State Electricity Law enacted in 2024, followed by the establishment of the Lagos State Electricity Regulatory Commission and the Lagos Independent System Operator in 2025–26.
According to him, work on investment, licensing, contracting and consumer protection is ongoing as the state seeks to develop an electricity market capable of supporting its growing economic and population demands.
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