By Annette Ikponmwonba | November 5th, 2026
Key Points
· Lagos State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, says the state depends on an estimated 4.5 million fossil-fuel generator sets
· He said the national grid meets only about 20 per cent of electricity demand in the state
· A 2024 study by Sustainable Energy for All and the Lagos State Government put annual emissions from generators at about 39 million tonnes of carbon dioxide equivalent
· He described unreliable electricity as “the invisible constraint” on urban productivity
· Victoria Island Power, with 40MW of planned embedded capacity, and the rehabilitation of the 26MW Akute independent power plant were cited as examples of neighbourhood-scale solutions
· He proposed a six-part framework for urban regeneration and outcome-based contracts for infrastructure
Main Story
Lagos State depends on an estimated 4.5 million fossil-fuel generator sets as the national grid meets only about 20 per cent of electricity demand in the state, the Commissioner for Energy and Mineral Resources, Biodun Ogunleye, has disclosed. He said the widespread reliance on generators drives up energy costs for businesses and residents, while worsening noise and environmental pollution.
Ogunleye made the disclosure while delivering the lead presentation at a panel on Urban Renewal, Regeneration and the Transformation of Older Cities. He cited a 2024 study by Sustainable Energy for All and the Lagos State Government, which estimated that about 4.5 million generator sets operate in the state and put annual emissions from them at about 39 million tonnes of carbon dioxide equivalent.
Describing unreliable electricity as “the invisible constraint” on urban productivity, he argued that generator dependence has created an expensive parallel energy system. “The generator is not merely a backup device; at scale, it becomes an expensive parallel urban infrastructure system,” he said. He advocated a shift from a “generator-powered district”, marked by high fuel costs, noise, pollution and uneven reliability, to a serviced district supported by networked electricity, shared infrastructure, measured service standards and utility planning linked to land use.
The Issues
The figures show how far Lagos has had to build its own power supply around a weak national grid. Millions of generators mean that households and businesses carry high fuel and maintenance costs, which feed into the price of goods and services and reduce the competitiveness of local firms. The environmental toll, from noise and carbon emissions, is also considerable.
Ogunleye framed the problem as part of a wider challenge in older urban districts, where ageing and overloaded power, water and sanitation networks combine with flooding, heat, competition for land and housing affordability pressures. His point was that renewing an older city requires more than roads and buildings. “An older city does not need a new identity. It needs a new operating system,” he said.
Delivery is the open question. The projects he cited are still under development or scheduled, and the state’s new electricity market institutions are still working on investment, licensing, contracting and consumer protection. Whether they can move households and businesses away from generators at scale remains to be seen.
What’s Being Said
Ogunleye said dependable energy infrastructure should be located where people already live, work and trade. He pointed to Victoria Island Power, a commercial district upgrade with 40MW of planned embedded capacity and a 12.6km dedicated underground feeder network, and to the Akute independent power plant, a dormant asset with 26MW of base contracted capacity, which is scheduled for rehabilitation under a concession agreement in 2026 to supply public services.
He proposed a six-part regeneration framework covering physical infrastructure, utilities such as power, water, waste and digital services, economic activity, social protection and housing, cultural heritage, and climate resilience. He cited road, drainage and collector reconstruction on Lagos Island as an example, aimed at reducing flooding and improving movement and commerce while managing disruption and protecting traders and heritage. He stressed that existing residents must be able to remain and prosper in renewed neighbourhoods.
On the power market, he traced the groundwork to the 2024 Lagos State Electricity Law, followed by the creation of the Lagos State Electricity Regulatory Commission and the Lagos Independent System Operator in 2025 and 2026. “An energy market is an instrument of urban policy, not an end in itself,” he said.
What’s Next
Work on investment, licensing, contracting and consumer protection under the new electricity framework is continuing. Attention will turn to progress on Victoria Island Power and the Akute rehabilitation, which is scheduled for 2026, On financing, Ogunleye proposed planning urban districts as single units, with roads, drainage, power, water and land use coordinated before procurement. Public capital would fund common infrastructure, while private investment and public-private partnerships would finance service assets, using contracts that reward reliability, maintenance and resilience rather than construction alone, with safeguards for affordability and local commerce.
Bottom Line
Lagos is running on millions of generators because the grid covers only about a fifth of demand, and the state’s answer is neighbourhood-scale power and a new electricity market, though the real test will be whether these projects deliver reliable supply and relief from the cost of self-generation.
