Lagos power generation improves as it exceeds Nigeria’s national grid capacity
Lagos State power generation has reportedly improved and exceeded the whole of Nigeria’s grid capacity.
According to a report published by Africa Finance Corporation, concerns have now been raised over the growing epileptic and insufficient power supply in the country.
The reports also stated that if the current situation lingers, the total number of Africans without access to electricity would remain that same between now and 2030.
The reports, as titled, ‘State of Africa’s Infrastructure Report 2025,’ as reported on Monday, said that Africa is pegged back by energy bottleneck, as more Africans at danger of living without electricity by the end of 2030 unless swift action is taken.
Howbeit, the current development goes against plans by the World Bank, the African Development Bank (AFDB), and other partners to ensure all Africans domiciled in the Sub-Saharan Africa should have access to electricity by 2030.
Both financial institutions (the World Bank and African Development Bank) have vowed to spend $40bn to foster development and alleviate poverty in Africa.
The programme is targetted at expanding grid capacity, off-grid solution, and policy reforms to connect divisions in Africa’s growing energy.
But in the reports of AFC, it is stated that the targeted goals may no longer be achievable, as a crucial portion of electricity generation in Africa’s largest economies (Nigeria and South Africa) currently exists outside the national grids, through off-grid, embedded, and captive systems.
As the report states: “A growing share of generation is now occurring outside the grid, through off-grid, embedded and captive power systems, particularly in Africa’s largest economies, Nigeria and South Africa.
“These developments reflect not only market innovation but also the continued inability of centralised systems to meet rising urban and industrial demand. In Nigeria, unreliable public supply has pushed millions of households and firms to rely on petrol and diesel generators.”
It is stated that in Lagos only, total amount of off-grid capacity is estimated to be more than 19 gigawatts, exceeding the whole of national grid, which still struggles to produce 4 t0 5 gigawatts of constant electricity.
“Recent spatial data studies by SEforALL suggest that off-grid generation capacity in Lagos State alone could exceed 19GW, surpassing Nigeria’s entire grid-connected generation capacity.
“Captive generation is especially widespread among industrial and commercial users, with large enterprises investing in dedicated diesel and gas-fired power plants.
“This reflects not only market innovation but also the continued inability of centralised systems to meet rising urban and industrial demand,” the report added.
In all Nigeria, epileptic power supply has pushed numerous homes and business to bank on small petrol and diesel power generators.
Within large industrial and commercial users, industrial generators have been widely used, where various companies now build their own diesel or gas power plants.
The AFC noted that this situation is not inherent in Nigeria alone. In South Africa, a 2022 policy shift that removed licensing criteria for embedded electricity generation catalysed a boom.
At the end of 2022, licensed capacity rose from just 23 megawatts in 2019 to 4.5GW, engineered only by private sector investment. In 2024 alone, more than 1GW of private solar capacity was added.
Despite this series of development, released official statistics could not reveal the full extent. While solar panels installed on house roofs call for global attention, therma generation, which accounts for a large chunk of industrial self-generation, is often neglected.
Captive plants supplying mines, cement factories, or industrial estates can range between 20MW and 200MW per site. This report warns that while the spread of off-grid electricity may be visible like advancement, it is a sign of serious systemic failure.
“Estimates from local industry groups suggest that more than 1GW of private solar capacity was added in 2024 alone. Despite their scale and significance, these trends remain poorly captured in official statistics.
“Global data often focuses on off-grid renewables, largely solar rooftops, while thermal generation, a large component of industrial self-generation, is rarely tracked.
“Yet thermal installations matter: captive plants serving mines, cement factories, or industrial parks can range from 20MW to 200MW or more per site, representing substantial capacity additions.
“Importantly, the rise of off-grid and captive power underscores a deeper systemic failure. Going off-grid is not always the low-cost solution, it is a last resort.
“A 2019 study by the Energy for Growth Hub found that, once reliability is factored in, self-generated power costs roughly twice as much as grid electricity in Nigeria and South Africa, and up to four times more in Ethiopia.
“These high costs erode industrial competitiveness and highlight the economic penalty of inadequate grid investment,” it stated.
It also noted that rather the suitable result, the improvement in self-generation showed be seen as a market signal, an understandable sign of suppressed demand, investment potential, and the haste of expanding reliable and sustainable grid access.
“Going off-grid is not always a low-cost solution, it is often a last resort,” the report noted.
“These high costs erode industrial competitiveness and underscore the economic penalty of underinvesting in grid infrastructure.
“To correct course, Africa can tap into the world’s most underutilized energy resource base. The continent is home to the largest untapped hydropower potential, the largest conventional geothermal reserves, and receives some of the highest solar irradiation globally.
“The pipeline of planned generation projects reflect this potential and is evolving towards a greater mix of renewables and gas.
“But these resources remain largely stranded due to weak infrastructure and limited investment, turning abundance into constraint.”
The report also warned that Africa’s slow energy growth is rapidly becoming a threat to the continent’s development ambitions.
Between 2013 and 2023, power generation across the African continent increased by less than 2 per cent yearly, far below population growth, which falls at 2.42 per cent, and economic growth of 3 per cent.
For the first time in 20 years, per capita power consumption is reducing, a sign of crisis, not just in access but in the capacity to scale.
In comparison, other regions of the world have made important progress. Middle-East and Asia-Pacific published yearly electricity generation growth of 3.8 percent and 4.5 per cent, respectively, during same period.
During last year (2024), Africa added just 6.5GW of utility=scale power, a third of India’s 18GW renewable energy which was far behind the 48.6GW added by the United States.
“Africa’s electricity generation is expanding, but not at the pace required to meet the continent’s rising demand.
“The energy shortfall is the single biggest constraint on economic transformation and the continent’s most underappreciated investment opportunity,” the report stated.
Despite being a country the world looks at for abundant untapped energy resources, from hydropower and geothermal, these assets remain hugely stranded due to weak infrastructure and underinvestment.
With no dramatic improvement, energy experts warn, the region risks becoming trapped in “low-energy equilibrium”, a situation where power access statistics appears to boom, but the volume and reliability of supply remain too low to corroborate meaning growth.
“Taken together, these trends suggest that Africa is not merely experiencing a stagnation in electricity access but a deterioration in meaningful energy consumption.
“While connection figures have improved in some markets, the volume and reliability of supply remain insufficient to support a sustained structural transformation.
“Without a significant increase in investment, both in generation and in supporting infrastructure, the region risks entrenching a low-energy equilibrium that could undermine future growth and development.
“If current trends persist, the number of Africans without electricity access could stay unchanged between now and 2030,” it stated.
As demand for electricity intensifies alongside urbanisation and industrialisation, the taste before leaders of Africa is now stark: either improve or decline.
