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