West Africa s Sustainable Energy Market

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1 ECOWAS SUSTAINABLE ENERGY WEEK Towards a Viable and Robust Energy Market in the ECOWAS region October 2016, Accra, Ghana West Africa s Sustainable Energy Market Mahama Kappiah Executive Director ECREEE

2 ECOWAS Overview and Energy Situation

3 ECOWAS Overview Area: 5,115,000 km 2 Population: 339 million (2014) GDP per capita: US$ 2,122 (2014) Electricity production: 59 TWh 32% from renewables Installed capacity: 16.1 GW of which 4,5 GW renewable energy (28%) Access to electricity: ~ 34% (2012) Access to modern energy for cooking: ~ 25% (2012)

4 ENERGY SITUATION IN WEST AFRICA Interrelated challenges of energy poverty, energy security and climate change mitigation and adaptation Low Access to Modern Energy Services One of the lowest energy consumption rates in the world; The poor spend more of their income on low quality energy services; Rural areas rely mainly on traditional biomass to meet their energy requirements; Household access to electricity services is only around 20% (40% in urban and 6-8% in rural areas) Energy Security Concerns High vulnerability to fossil fuel price volatility (60 % of electricity generation from oil) Gap between rising urban energy demand, available generation capacities and limited investment capital; High losses in the energy systems (e.g. high energy intensity and low demand and supply side efficiency); Climate Change Concerns Increasing energy related GHG emissions (new investments determine GHGs for the next years) Climate change impacts vulnerable West African energy systems (e.g. water flows, extreme weather events)

5 Total Primary Energy Supply in ECOWAS In 2013, total primary energy supply was 189 million toe Renewable 1% Fossil 21% Elec Import 0% biomass 78%

6 Power Sector in ECOWAS Solar PV 0% Wind 0% Other source 0% Coal 0% Electricity source Coal In 2013, total electricity generated was 59.5 TWh Hydro 30% Petroleum 18% Petroleum Gas biofuel Hydro biofuel 0% Gas 52% Solar PV Wind Other source

7 Significant RE Resources Biomass Solar Hydro Wind

8 ECREEE the ECOWAS Centre for Renewable Energy and Energy Efficiency Established by the ECOWAS Council of Ministers on November 23, 2008 to promote development of sustainable energy markets Secretariat is based in Praia, Cape Verde with National Focal Institutions (NFIs) across all 15 ECOWAS countries Officially inaugurated on the 6th July 2010 Appointed by the ECOWAS Energy Ministers as the SE4ALL Focal Point for West Africa Established with support of core partners:

9 ECREEE RESULT AREAS RESULT AREA 1: Effective regional RE&EE promotion agency created and efficiently managed RESULT AREA 2: Tailored policy, legal and regulatory frameworks created and implemented RESULT AREA 3: Capacities are strengthened and applied RESULT AREA 4: Knowledge management, awareness raising, networks and advocacy strengthened RESULT AREA 5: Business and Investment Promotion

10 ECREEE 6 Years of operation 12 regional Programs under implementation Towards Sustainable Energy Sustainable Energy Policy Program SE4ALL Program Capacity Building and Knowledge Management RURAL ELECTRIFICATION Program Energy Efficiency Program Project Development and Finance Program Bioenergy Program Solar Thermal Program Clean Cooking Program (WACCA) Program on Gender Mainstreaming in Energy Access Climate Change Program Small Hydro Power Program

11 REGIONAL SUSTAINABLE ENERGY POLICIES Adopted by the ECOWAS Authority of Heads of State and Government in 2013 ECREEE is coordinating the implementation of the RE and EE Policies Similar process to development, implementation and monitoring of the EU Directive 2009/28/EC on Renewable Energy Regional policies represent a voluntary contribution of ECOWAS to the SE4ALL Initiative ECREEE is the SE4ALL Focal Institution for ECOWAS Sustainable Energy Country Action Plans developed across the 15 Member States Developed in Partnership with European Union, RECP, EUEI-PDF UNIDO, Austria, Spain & GEF

12 First ECOWAS RE and EE Status Report Launched in November 2014 Collaboration with REN21 and UNIDO

13 ECOWAS Energy Access

14 ECOWAS Regional Objectives ENERGY ACCESS Provide access to clean cooking energy to 100% (60%) of the population by 2030 (2020), including 26% (20%) of LPG users Promoting 60,000 mini-grids and 2.6 million stand-alone systems across the region by 2020 RENEWABLE ENERGY By 2020(2030), 6.8% (5%) of generation capacity worth 634 MW (2000 MW) from biomass residues or dedicated plantations The share of renewable energy (incl. large hydro) of the overall electricity mix will increase to 35% (48%) in 2020 (2030) The share of new renewable energy such as wind, solar, small scale hydro and bioelectricity (excl. large hydro) will increase to 10% (19%) in 2020 (2030) The share of ethanol/biodiesel in transport fuels will increase to 5% (15%) in 2020 (2030)

15 thousand households electrification rate ECOWAS Targets on electricity access ECOWAS targets on electricity access The Electrification rate should increase from 34% (2012) to 88% (2030) Over 60 million households will gain access to electricity over the period % 39% 67% 77% 88% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Urban HH Rural HH Electrification rate

16 Thousand Households per year ECOWAS Planned Increase in Electrification Increase the number of households electrified (on grid and off grid) from 1.7 million per year to 4.7 million per year Annual number of connected Households Urban HH Rural HH

17 Thousand households Access rate ECOWAS Targets on modern & efficient fuel access The access to modern and efficient cooking fuel should increase from 25% (2012) to 83% (2030) Over 60 million households will gain access to modern and efficient cooking fuel over the period ECOWAS targets for access to modern & efficient cooking fuel 25% 31% 57% 72% 83% % 80% 70% 60% 50% 40% 30% 20% 10% 0% HH w modern energy (Butane, Biogas) HH w improved cookstoves Access rate

18 Tonne Butane kg butane / HH / year Planned Increase in Butane Consumption LPG consumption for cooking will increase from 0.5 to 3.5 million tonne per year The number of households gaining access to LPG will increase from 0.6 to 1.5 million per year ECOWAS targets for butane supply to Households 4,000,000 3,000,000 2,000,000 1,000,000 - Butane (tonne) kg butane/ HH / year -

19 Thousand households per year Planned Increase in Use of Improved Cook Stoves The number of households gaining access to improved cook stoves (ICS) will increase from 1.1 million to 2.7 million per year After 2020, the number of HH gaining access to ICS will decrease because of saturation of the urban market and penetration of butane Annual number of households gaining access to improved cook stoves ICS Rural HH Urban HH

20 ECOWAS National Energy Efficiency Action Plans (NEEAP)

21 ECOWAS Regional Objectives ENERGY EFFICIENCY Elimination of incandescent lamps by 2020 Reduce losses in electricity distribution from currently 15% - 40% to less than 10% by 2020 Achieve universal access to safe, clean, affordable, efficient and sustainable cooking for the entire population of ECOWAS by 2030 Create an ECOWAS technical committee for energy efficiency standards and labels, and adopt the first standards and labels on a regional scale for major energy-using equipment by the end of 2014 Create instruments to finance sustainable energy, including carbon financing, by the end of 2013

22 Firewood demand (tonne/an) Savings over baseline scenario ECOWAS Planned Evolution of Biomass Consumption The promotion of LPG and improved cook stoves will permit to curb the firewood demand below sustainable supply capacity: Less than 200 million ton per year in 2030, Instead of currently around 250 million ton per year Primary Firewood demand in ECOWAS region % % % % % Firewood baseline Firewood SE4ALL Savings (%) 70% 60% 50% 40% 30% 20% 10% 0%

23 ECOWAS National Renewable Energy Action Plan (NREAP)

24 ECOWAS Regional Objectives RENEWABLE ENERGY By 2020(2030), 6.8% (5%) of generation capacity worth 634 MW (2000 MW) from biomass residues or dedicated plantations The share of renewable energy (incl. large hydro) of the overall electricity mix will increase to 35% (48%) in 2020 (2030) The share of new renewable energy such as wind, solar, small scale hydro and bioelectricity (excl. large hydro) will increase to 10% (19%) in 2020 (2030) The share of ethanol/biodiesel in transport fuels will increase to 5% (15%) in 2020 (2030)

25 Installed RE capacity MW Ratio RE capacity to total installed capaicty ECOWAS Planned Increase in RE Generation Capacity The share of renewable generation capacity will stay around 20% Renewable Energy Generation Capacity Forecast % 30% 25% 20% 15% 10% 5% 0% Hydro Solar Biomass Wind Ocean Storage RE/Installed capacity

26 Implementing the Action Plans The success of these action plans will require that they are based on national potentials and socio-economic assessments; underpinned by concrete laws, incentives and measures as well as a clear financing strategy and technically well designed interventions.

27 Regional initiatives and strategies

28 Public Private Partnerships in ECOWAS Cabo Verde: Cabeolica 26 MW Wind power project is the result of a PPP between the Gov. of Cabo Verde, Electra (Utility) and InfraCo Africa. The Gambia: The Tanji 900 kw Wind power project resulted from a PPP between the Gov. of Gambia through a GEF-UNIDO fund and Gamwind Ltd.

29 Policy Instruments for Promoting Grid-Connected 1. Feed-in tariffs (FIT) Three countries in the region (Gambia, Ghana, Nigeria), introduced or are planning to introduce FITs for RE incl. solar PV, but limited results so far (20 MW in GHA). 2. Net metering (NM) Four countries in the region introduced NM (Cabo Verde, Gambia, Ghana and Senegal), but limited uptake so far.

30 Overview of IPP tenders in the Region 1st process completed in 2014, 2nd in preparation On-going On-going On-going In preparation In preparation Currently supported by ECREEE EOI launched in 2014, shortlist completed, on-hold On-going ECREEE Support under discussion

31 Competitive Tendering & Bidding in the ECOWAS IPP tenders Several countries in the region have conducted, are conducting or planning to conduct IPP tenders (for Nigeria, Mali, Sierra Leone) Process driven by MoE, regulator, utility or PPP unit Some are site-specific, some are open With and without support from international organizations With and without credit enhancement In some countries, the process was started but not followed through

32 The Regional Dimension Joint initiative with IRENA on West Africa Clean Energy Corridors incl. corridors for solar energy, hydropower and wind The European Union pledged support for the Corridors Initiative So far no cross-border trade of electricity from RE, but this is expected to increase as more and larger projects come online Will be reflected during the revision of the Regional ECOWAS Electricity Transmission and Generation Master Plan

33 ECREEE wants to move ahead with a strategic approach based on the corridors: 2 GW solar, hydro, wind and biomass

34 Way Forward Identification of high resource potential and environmentally sustainable zones for development of cost effective renewable energy power plants National and regional planning and support mechanisms for integration of cost effective RE power options into national and regional master plans for power generation and transmission Enabling policy, regulatory and institutional frameworks to promote investments Facilitate project pipeline development and access to finance and risk mitigation mechanisms Capacity building to plan, operate, maintain and govern power systems with higher shares of renewable electricity generation and reduce technical and commercial losses Public awareness and incentives regarding benefits and uptake of energy efficiency measures

35 Strong Partnerships are KEY CORE NEW INVESTMENT TECHNICAL OTHER

36 Thank You Mahama Kappiah Executive Director ECREEE ECREEE Secretariat Achada Santo Antonio ECREEE Building, 2nd floor C.P. 288, Praia, Cabo Verde Tel: , /24/2016