FUTURE PROOFING

CITIESTHE LAGOS ENERGY SECTORRisk and opportunities for resilient growth of the Lagos energy sector

Lack

of p

ow

er generation major constraint on industrial grow

th

Lim

ited

acce

ss to power drives low density urban forms and spraw

l

No st

reet li

ghting impacts perceptions of safety

CITY TO HOUSEHOLD LEVEL IMPACTS

Damag

e to co

mpetitiveness of energy and carbon intensive sectors, impacting growth and jobs

Dispersed climate change impacts across multiple urban centres

Impa

cts o

n live

lihoods d

ue to disruptions to supply and/or price rises of household and industrial energy sources

Health impacts of air pollution

Im

pacts

on livelihoods due to poor access to utilities e.g. energy, water, sanitation

Impa

ct o

f poo

r nut

rition

al intake on health of vulnerable groups, including risks of fatalities and increased poverty

Regional conflict e.g. access to energy resources

Social unrest e.g. food riots and power black outs

Impa

ct o

f hab

itat d

estru

ction on su

pply of provisioning and regulating ecosystem services e.g. fuel wood for heating

Risk

s to

long

term

viab

ilit

y of a

gricultural production e.g. due to disruptions to water systems and lack of pow

er supply

Wid

espr

ea

d dam

age to buildings, infrastructure, industry and agriculture

Tim

e sp

ent c

ollec

ting wood and water could be used for productive activities

Stresse

s to basic services e.g. health systems

Fuelw

ood co

oking resulting in air quality and health problems

GLOBAL TO CITY LEVEL IMPACTS

REGIONAL TO CITY LEVEL (URBAN CATCHMENT) IMPACTS

HOUSEHOLD/PEOPLE

Spread of infectious diseases

Moving from risk to impact and opportunityThe Lagos State Government believes a long term perspective is essential for addressing present and future challenges related to the development of the energy sector in Lagos State.

For Atkins, the future is not a vague time horizon that allows decisions to be deferred – it is the guiding principle which governs our thinking now.

Lagos is a megacity of over 20 million people and the economic capital of Nigeria. Its rapid growth places pressure on resources and ecosystem services that support the needs of its citizens. Solutions have to create a new development path that enables the development goals in of the PATH Agenda to be achieved.

Cities like Lagos experience a complex web of interrelated environmental, social and economic risks. These range from climate change and energy security to shifting demographics, increased urbanisation and the rise of consumer expectations. What is less clear is the impact these changes will have in combination with each other, and the differential risks these pose for the city.

So how does a city make long term investment decisions that create value and provide services that are fit for the future?

The answer lies in future proofing. For Atkins it is about taking steps now to be resilient to whatever the future may hold. Utilising and developing capabilities of cities to respond to the risks associated with climate change, resource scarcity and damage to ecosystems in a way that supports inclusive urban development.

Future Proofing the Lagos Energy Sector The report accompanying this summary, Future Proofing the Lagos Energy Sector, focuses on the energy sector and its interdependent links with Agriculture, Transport & Housing – the Lagos State Government’s PATH (Power, Agriculture, Transportation and Housing) Agenda. These sectors are asset heavy and decisions taken today have consequences over long timescales.

Working with the Lagos State Government’s implementing agency for energy development – Lagos State Electricity Board, Atkins used scenario planning to investigate what the megacity of Lagos could plausibly look like in 2030. The scenarios are bounded by two highly uncertain drivers that will have a significant impact on the energy sector of the future:

Societal value placed on resources Consumer values and behaviours are hard to predict. Incomes are certain

to rise and lessons from developed economies highlight the difficulty of decoupling rising incomes from increased resource use. However, with technological advances and limited resources – will this be the same in future?

Energy price and availability Global energy demand is rising, traditional fossil fuels are ultimately finite

and climate change is with us, but we are yet to see a paradigm shift towards a low carbon energy economy. What will be the implications of this shift, if it occurs?

Whilst there are uncertainties affecting the future trajectory of the city, there are no-regrets pathways that can be taken today to prepare for an uncertain tomorrow.

Data and knowledge management – data is growing and becoming more comprehensive but it is not a panacea. Successful service delivery will continue to require critical thinking skills and an understanding of system connections.

Energy user engagement and understanding – user engagement is essential in all scenarios. There is value in developing understanding of the services and industries the energy sector supports.

Skills and workforce – a breadth of skills is required in all scenarios. Could the energy sector work with other emerging utilities to develop cross-sectoral skills at all levels, from apprenticeships to professional skills?

Innovation – the ability to innovate is fundamental to the success of organisations in all scenarios. Investing in the ability to identify and develop new technologies and processes is a no-regret pathway.

Future Proofing the Lagos Energy sector should enable a secure, affordable low carbon energy supply that provides power to every Lagos State citizen. It will provide stability against the wider federal infrastructure shortfalls in the short term and resilience to the effects of climate change , resource scarcity and other risks (shown in the diagram on the opposite page) in the long term, as well as being flexible enough to accommodate the changing needs of the city.

The risks relevant to the city energy nexus operate at different levels

High carbon emissions – carbon price risk associated with regulation and/or market mechanisms for pricing carbon

High energy use – vulnerability to limited availability and/or rising prices of traditional energy sources

Global food supply impacted by climate change

Energy infrastructure deficit - reliance on household diesel generators and fuelwood

Lack of street lighting affords opportunities for crime and affects perceptions of personal safety

Sea level rise and flooding events threaten critical infrastructure

Temperature extremes increase cooling demand

Disruption to energy generation and distribution impacting city economy and livelihoods

Risks to food security – energy constraints limiting availability and/or rising prices of basic foodstuffs. Fish catches in tropical regions forecast to fall by up to 60% by 2050. Drought leads to increased pumping to extract and transfer water

Ecosystem services at risk from unplanned urbanisation

GLOBAL TO LOCAL RISKS REGIONAL TO LOCAL RISKS LOCAL RISKS

© 2014 Atkins Limited. All rights reserved.

FUTURE PROOFING

CITIESTHE LAGOS ENERGY SECTOR

LAGOS PATH AGENDA AND 2020 MEGACITY GOALSLagos State Government under the leadership of Governor Babatunde Raji Fashola (SAN) has identified Power, Agriculture, Transport and Housing (PATH) as the “Quickest drivers for post-recession economic recovery and poverty eradication”, noting their enabling capacity to accelerate inclusive development in Lagos.

Health and wellbeing: The city provides Lagosians with services and facilities to lead healthy lifestyles and wellbeing.

Poverty eradication: The PATH agenda and associated projects and programmes dramatically reduces numbers of urban poor.

Enabling infrastructure: Provision of essential infrastructure enables resilient growth of the city.

Economic growth: Inward investment and economic growth emerges in response to greatly improved physical conditions and inclusive policies and programmes.

Access to goods and services: Well planned infrastructure – e.g. energy, transport, landuse, food systems, all provide access to goods and services essential for economic growth and wellbeing.

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270% OF RURAL POPULATION EMPLOYED IN AGRICULTURE Addressing energy deficit in rural economy

supports food production and processing investment

More rural opportunities reduces migration

Provision of power will support technological innovation and production efficiencies

UP TO 60% OF FRESH PRODUCE WASTED IN SUPPLY CHAIN Energy will enable cold storage and

distribution networks, improving access to market, reducing waste and improving food hygiene

Stronger interstate trade links with reliable power

Higher temperatures resulting in greater evapo-transpiration and a larger water demand for crops can be managed

Shifting to local and regional food production model more adaptable and resilient to effects of climate change and regional insecurity

Local model reduces expenditure on food imports

10% OF FOOD CONSUMED IS PRODUCED IN LAGOS STATE

LAGOS IS THE LARGEST MEGACITY IN THE WORLD WITHOUT INTEGRATED MASS TRANSIT NETWORK Mass transit supports modal shift, reducing car dependency

Air quality and public health will be improved

Lagos State Strategic Transport Master Plan dependent on c.200MW of additional capacity to power rail and metro lines

1 MILLION REGISTERED CARS Rising incomes correspond to rising car

ownership exacerbating congestion

Integrated land use planning and transport can avoid car dependency

DAILY TRIPS DEMAND ESTIMATED TO REACH 30M/DAY IN 2030 Multimodal mass transit system will

improve movement efficiencies in the city

Linking landuse and transport planning will be essential to support sustainable urban form and reducing car dependency

In cities the spatial relationship between socio-economic activity; urban form and movement networks governs urban performance. Supporting integrated transport and landuse planning in Lagos will reduce congestion, improve local economic activity and reduce transport sector energy demand.

60% LIVE IN INFORMAL SETTLEMENTS Energy access is an important part of the

‘enabling’ approach to integrating informal settlements into the city

80% OF HOUSEHOLDS RELY ON DIESEL GENERATORS Households spending 50N/kWh for diesel

generation compared with 13N/kWh for grid electricity

Lack of access to power results in use of generators and hardwood fuel resulting in air quality problems and increasing risk of respiratory disease

40% OF POPULATION HAVE NO ACCESS TO POWER GRID Human capital and wellbeing improved with

access to utilities

Limited street lighting enables crime and impacts on personal safety

Infant mortality reduced through provision of reliable power to hospitals

Building regulations support energy conservation and efficiency

LAGOS IS A SPRAWLED CITY Improved access to power enables higher

density mixed use development (use of elevators)

Integrated land use and transport development and higher density development will help tackled encroachment into protected habitats

Integrated planning helps avoid locking in car dependency

Lagos aims to be a slum free city and provision of energy infrastructure is an essential component of this journey. Access to power will support the development of the basic social services presently absent in the city’s informal settlements and support economic growth and integration with the city.

Commerce and industry’s potential contribution to energy use and carbon emissions is significant and growing. Future strategies will need to address this sector in combination with the other needs identified in the city. This recognises the role commerce and industry will play in the economic life of Lagos.

Reliable, secure, affordable power provision is an essential element of infrastructure for Lagos State’s SPAAG (Strategic Programme for Accelerated Agricultural Growth).

HOUSING AND BUILT ENVIRONMENT

COMMERCE AND INDUSTRY

TRANSPORT

AGRICULTURE

OPPORTUNITIES OPPORTUNITIES

AGRICULTURE4

10% OF FOOD CONSUMED IS

PRODUCED IN LAGOS STATE

70% OF RURAL POPULATION

EMPLOYED IN AGRICULTURE

60% OF FRESH PRODUCE

WASTED IN SUPPLY CHAIN

TRANSPORT

LARGESTMEGACITY IN THE WORLD

WITHOUT INTEGRATED MASS TRANSIT NETWORK

7% ANNUAL INCREASE IN

CAR OWNERSHIP

30MTRIPS PER DAY IN 2030

1

3HO

USIN

G & BUILT ENVIRONMENT

60% LIVE IN INFORMAL

SETTLEMENTS

80% OF HOUSEHOLDS RELY

ON DIESEL GENERATORS

40% OF POPULATION HAVE NO ACCESS TO POWER GRID

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ENERGY1 5432

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OPPORTUNITIES

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FUTURE PROOFING LAGOS ENERGY SECTOR – POTENTIAL INTERVENTIONS Development of offshore gas

Embedded generation – Independent Power Projects (conventional and renewable)

Municipal Energy Fund to finance rural and urban solar projects

Community biogas projects

Offshore wind

Compressed Natural Gas transportation

Promotion of energy efficient appliances

Building regulations

LAGOS ENERGY SECTOR 2030. INCLUSIVE, RESILIENT AND ADAPTABLE 100% access to electricity

State has control and accountability for energy infrastructure

Independent Power Projects result in stable and reliable power supply, lower air pollution and carbon emissions

Renewable energy accounts for at least 20% of state energy mix

Incentives and education programs support energy conservation

Building regulations improve energy performance

Street lighting covers 100% of commercial and residential areas

Fossil fuel subsidies reformed and investment in sustainable energy

LAGOS ENERGY SECTOR TODAY. HIGH RISK AND VULNERABLE Power deficit equal to 9,000-10,000MW and low

utilisation of generating capacity

40% have no access to the electricity grid and inadequate transmission capacity

150kWh/yr average annual energy consumption

80% population relying on diesel generators

Governance challenges Federal – State ownership / management of assets

Minimal renewable energy in Lagos State energy mix

Fossil fuel subsidies in place

Physical environment and cli m

ate changePopulation growth and urbanisation

Agriculture and food security

Ener

gy

Fina

nce

Workforce and skills

Transport secto

r gro

wth

© Atkins Ltd except where stated otherwise.

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Alastair McMahonCities, Atkins

Euston Tower, 286 Euston Road, London NW1 3AT

Tel: +44 20 7121 2227

Mob: +44 7815 24 3218

Email: alastair.mcmahon@atkinsglobal.com

Web: www.atkinsglobal.com/fpc

RISKS FACING THE LAGOS

ENERGY SECTOR

30+ million Lagos State population in 2030

200,000 engineers will be required for the energy sector over the next 15 years

10% of food consumed is produced in Lagos State

200MW New generation capacity required for planned mass transit infrastructure

$14 to $33 billion is required to fund investment in energy generation by 2030 depending on technology

16,000 – 27,000MW of new generation capacity required in Lagos State by 2030

EIGHT-FOLD increase in population exposed to storm surges by the 2070s

Damilola OgunbiyiGeneral Manager, The Lagos State Electricity Board

Old Works Yard Road, Old Secretariat Ikeja, GRA, Lagos

Tel: +234 803 5761 293

Mob: +234 703 7628 899

Email: dogunbiyi@lseb.gov.ng

Web: www.lseb.gov.ng

If you are interested in finding out more about Future Proofing the Lagos Energy Sector or how Atkins can support your strategy development, please get in touch with us.

130% 130% increase in days over 35°C (in an average year) by the 2050s

130% 130% increase in days over 35°C (in an average year) by the 2050s

7 million tonnes of municipal solid waste in Lagos State by 2030. 80% increase on current levels

7 million tonnes of municipal solid waste in Lagos State by 2030. 80% increase on current levels