THE ENERGY SECTOR IN WEST AND CENTRAL AFRICA:
BARRIERS AND OPPORTUNITIES
Mahama Kappiah
Executive Director
ECREEE
Regional Expert Meeting on Climate Change and Enhanced Renewable Energy Deployment
West and Central Africa
February 29th and 1st March 2016
Dakar Senegal3/1/2016 1
Outline
Context/Background
Barriers and Opportunities in the energy sector.
Strategic approaches to overcome the Barriers.
Conclusion
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Brief Background of WCA Sub Region 24 Growing Economies.
Total population of 433.5 million which is 6.2% of the world’s population. (UNICEF,2014).
Agriculture accounts for more than 35% of GDP in West Africa and in central Africa dominated by oil (45% in 2008) AfDB, 2011
Approximately 70% of people live in rural areas.
Low level of access to modern energy services by its citizens.
Energy Demand growing as part of the continents escalating energy demand.
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Energy Situation in West Africa
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28
13
87
59
19
72
1915
12
27
9
48
57
15
27
6 4
70
32
3
52
1 2 4
14
1.5
35 33
1
21
0
10
20
30
40
50
60
70
80
90
100
Benin BurkinaFaso
CaboVerde
Côte d’Ivoire
TheGambia
Ghana Guinea GuineaBissau
Liberia Mali Niger Nigeria Senegal SierraLeone
Togo
Shar
e (
%)
of
Po
pu
lati
on
Electricity Access Rates in ECOWAS Member States, 2010-2011
National Rate (%)
Urban Rate (%)
Rural Rate (%)
Source: ECREEE, IEA
Energy Situation in Central Africa
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0
10
20
30
40
50
60
70
80
90
100
Cameroon Central AfricanRepublic
Chad Congo, Dem. Rep. Congo, Rep. Equatorial Guinea Gabon
% of population Access to electricity
% of population Access to electricity
World Bank statistics 2012
Energy and Climate Change-Possible Nexus (1)
Becoming more and more intertwined - Existence of a nexus
The burning of fossil fuels for electricity and heat is the largest single source of global greenhouse gas emissions.
Stronger climate and energy policies needed to decarbonize the energy sector.
Renewable energy is a key decarbonizing technology.
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IPCC, 2014
Energy and Climate Change –Energy Impacts
Climate Change impacts on energy security
Impact on water resources - Dwindling Hydropower potential due to change in precipitation influencing droughts and floods.
Effect of natural disaster on energy infrastructure –Increased risk and subsequent cost.
Dwindling Biomass resources - resilience and regeneration capacity of forests resources are negatively affected by extreme climate conditions
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Energy and Climate Change
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Carbon dioxide emissions by country in thousands of metric tonnes
per annum, Very minimal in west and central sub region but Impacted
the most
https://commons.wikimedia.org/wiki/File:Countries_by_carbon_dioxide_emissions_world_map_deobfuscated.png
Opportunities for transforming the Energy Sector
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Climate change is a threat to sustainable development. Nonetheless, there are
many opportunities to link mitigation, adaptation and the pursuit of other
societal objectives through integrated responses( IPCC , 2014)
Develop cleaner low
carbon Economy
Promote Energy
Security
Create Economic
And Employment Opportunities
Opportunities for Improving Energy security
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Renewable Energy Resource Endowment for clean energy
Central African sub region:
• has the continent's largest hydro-electric potential( Accounts for 60% of Africa's hydropower potential) (AfDB 2011).
• Average solar radiation
West African sub region:
• 101 492 Gwh/year : Technically feasible Potential (IRENA REMAP,2015)
• Average solar radiation of 5-6 kWh/m2 per day throughout the year. (ECOWAS renewable energy policy, 2013).
Both Regions:
• Huge potential for all forms of bioenergy (e.g. biomass, biogas, biofuel);• Considerable wind power potential in some countries;
ECOWAS EXPERIENCE: Aggregated Targets for Grid-Connected RE as per National
Renewable Energy Action Plans (NREAPs)
0%
5%
10%
15%
20%
25%
30%
35%
0
5000
10000
15000
20000
25000
30000
35000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Rat
io R
E ca
pac
ity
to t
ota
l in
stal
led
ca
pai
cty
Inst
alle
d R
E ca
pac
ity
MW
Renewable Energy Generation Capacity Forecast
Hydro Solar Biomass Wind Ocean Storage RE/Installed capacity
ECOWAS EXPERIENCE: Emission abatement from Renewable Energy
The CO2 emission from the use of fossil fuel used in power generation plants
amounts to 20.7 million in 2012 (16% of the total emission).
Considering the implementation of the measures included in the
1. SE4ALL actions agendas (extension of access to electricity),
2. National Renewable Energy Action Plans (increase of the share of renewable energy)
3. National Energy Efficiency Action Plans (implementation of energy efficiency measures at
the demand point as well as in the grid).
The total emission abatement would amount to 39.4 million tonnes CO2 (EU
Technical Assistance Facility (TAF) for the “Sustainable Energy for All” (SE4ALL)
initiative 2014).
Major Barriers for RE in the Energy sector
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• -Business as usual models e.g grid extension
•High technology cost
• Limited access to funding
•Perceived Financing risks
• Inadequate skills to install, operate and maintain RE technologies
•High Transaction cost and Bureaucratic procedures
•Uneven and weak policies in different countries
Lack of appropriate and comprehensive
Policy, Regulatory and Institutional
Framework
Lack of Informational and technical capacity
Lack of Innovative Business Ideas
Limited Finance and Investments
Strategic Approaches To Improving Access despite Barriers
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Approach Focus Areas/ Barriers Addressed Examples
RE PROMOTION POLICIES Target Price setting and cost reduction , facilitate pubic investment and ensure power grid access
FiTs, competitive Bidding , renewable resource obligations, subsidies and rebates
EMISSION REDUCTION POLICIES
Target Energy sector Emissions and environmental externalities
Emission Cap and Trade, ghgreduction projects , renewable energy mandates and crediting
DISTRIBUTED GENERATION POLICIES
Target lowering the cost of transmission and distribution infrastructure . Targets renewable energy and point of end use
Net metering, Interconnection regulations
RURAL ELECTRIFICATION POLICIES (POPULAR IN ECOWAS)
Promote off grid energy supply for rural areas
Energy service concessions,productive uses , microcredit
POWER SECTOR RESTRUCTURING POLICIES
Competition I supplying wholesale generation
Competitive wholesale power markets, competitive retail market, Self generation
Activities for removing barriers for Grid-Connected RE
Technical assistance for improving the legal and regulatoryframeworks
Technical assistance for grid connected RE project development.
Documentation and analysis of experiences with RE flagship projects.
Regional knowledge exchange and capacity building.
WWW.ECREEE.ORG
Experiences with RE Flagship Projects in the ECOWAS Region
• Cabeólica wind project in Cabo Verde
• Navrongo Solar PV project in Ghana
WWW.ECREEE.ORG
The information on project experiences on the following slides is
mainly based on publicly available information. ECREEE is just
starting to conduct more in-depth research on this topic, the results
of which will be published upon completion.
For more information visit : http://www.ecreee.org/TA-flagship-
projects
The Cabeólica Wind Project in Cabo Verde – Key Facts
First wind PPP in Sub-Saharan Africa.
Four wind parks on different islands with a combined generation capacity of 25.5 MW.
Public-private partnership project; shareholders: GoCV, Electra SARL (national utility), InfraCo Africa, Finnish Fund for Industrial Cooperation, Africa Finance Corporation.
Investment cost: €56 million.
Registered as CDM project and All electricity sold to national utility Electra on the basis of a 20-year take-or-pay PPA.
WWW.ECREEE.ORG
The Cabeólica Project – Selected Experiences I
Demonstrated the feasibility of large-scale power generation with RE in Cabo Verde.
Significant share in Cabo Verde‘s electricity mix: Average share of 18-30% of electricity mix depending on island; up to 60% on certain days.
Diversification of supply, reduced impact of volatile oil price.
Developer had to achieve a minimum project size to increase interest of DFIs and contractors.
Challenges during construction: trucks and cranes had to be imported.
WWW.ECREEE.ORG
Navrongo Solar PV Project in Ghana – Key Facts
2.5 MWp solar PV project developed in 2013.
First project under VRA‘s Renewable Energy Development Programme
Competitive process for selecting EPC contractor incl. O&M during first 6 months.
Development in phases:
• 1.9MWp commissioned in February 2013• Additional 600kWp commissioned in July
2013
WWW.ECREEE.ORG
Navrongo Solar PV Project in Ghana – Selected Experiences
Competitive procurement allowed to minimize CAPEX.
Need for timely planning and construction of transmission infrastructure to avoid delays.
Need for adequate securityduring construction andoperation to avoid theft of solar modules.
WWW.ECREEE.ORG
Photo: VRA
Activities to remove barriers for Mini Grids
ECREEE Launched The ECOWAS Programme on Access to Sustainable Electricity Services (EPASES) for 2015-2020. The initiative is committed to supplying 22% of rural population with mini-grid and stand-alone systems through:
The implementation of 60,000 mini-grids by 2020 with a total capacity of 3,600 MW in order to serve 71.4 million people for a total investment of €13.2 Billion across six years.”
ECREEE already implementing 40 clean minigrids in Senegal for 3,000 Households in 40 villages in Casamanceand Tambacounda regions. With a total capacity of 800kWp. 3/1/2016
The distributed generation is already playing an important role to promote access to electricity
0
10
20
30
40
50
60
70
80
90
100
Benin BurkinaFaso
Cabo Verde Côted'Ivoire
Gambia Ghana Guinea GuineaBissau
Liberia Mali Niger Nigeria Senegal SierraLeone
Togo
Shar
e o
f P
op
ula
tio
n
(Pe
rce
nt)
Share of Electrified Population Relying on Grid-connected or Distributed Systems in ECOWAS Member States
Mini-grid or stand-alone systems Grid-connected
Source: ECREEE, IRENA
# existing clean energy mini-grids
0 3 02 0 0 12 1 29 0 107 1 0Several
Source: ECREEE
ECREEE Advancing the Low Carbon Development Agenda
• Launched a program on Climate Change to support West African countries in meeting their mitigation commitments under the United Nations Framework Convention on Climate Change.
• The program will seek to support ECOWAS countries to monitor and report greenhouse gas emissions reductions resulting from renewable energy deployment and the implementation of energy efficiency measures in the ECOWAS region.
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Conclusion Energy security remains a grave problem for countries in West and
central Africa.
The energy sector faces a number of challenges, climate change being one of them. Confronting these challenges is a complex task and requires an innovative integrated approach to energy policing.
Efforts need to be to focused on adopting the right clean technologies; this will require improved institutional and technical capacity as well as huge investments.
Renewable energy technologies now provide economical solutions for off-grid and mini-grid electrification in remote areas and the opportunities should be seized.
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Thank You for listening!
Mahama Kappiah
Executive Director
ECOWAS Center For Renewable Energy and Energy Efficiency
ECREEE
3/1/2016