Scaling Up Renewable Energy Program in Low Income Countries (SREP)

Transcription

1 République du Senegal Un Peuple Un But Une Foi Ministry of Energy Scaling Up Renewable Energy Program in Low Income Countries (SREP) April 2014

2 1- I- COUNTRY AND GOVERNMENT DEPARTMENTS SUBMITTING THE MANIFESTATION OF INTEREST COUNTRY: REPUBLIC OF SENEGAL The Republic of Senegal is among the 15 Member States of the Economic Community of West African States (ECOWAS). The country is bounded in the west by the Atlantic Ocean, in the north by Mauritania, in the East by Mali and in the South by the Republic of Guinea and Guinea-Bissau. The Gambia forms an enclave within Senegal penetrating more than 300 km inland. Some key indicators on Senegal 1 : Indicators Population (general population census in 2013) Surface area (km2) Urbanization rate in % (in 2013) 45 Total female population (in 2013) Total male population (in 2013) Intercensal rate of increase % 2.5 Density (N of inhabitants / km 2 ) in Per capita GNI in $US (in 2012) Goss national disposable income (in 2012) in billions of $ US GDP growth rate in % (in 2012) Inflation rate (in 2012) in % +1.4 Human Development Index (HDI, 2012) Senegal 1 Source : National Agency for Statistics and Demography

3 Tableau I: Key indicators on Senegal GOVERNEMENT DEPARTMENT: MINISTRY OF ENERGY Ministry responsible for defining and implementing the energy policy of the Republic of Senegal. The implementation of projects and programs is entrusted to the following entities: IMPLEMENTING ENTITIES: NATIONAL AGENCY FOR RENEWABLE ENERGY (ANER) ANER was established by Decree n of 17 May 2013 and primarily mandated to promote renewable energy in all sectors of activity. SENEGALESE AGENCY FOR RURAL ELECTRIFICATION (ASER) ASER, an autonomous service unit of the Ministry of Energy, was set up by Decree n of 30 December 1990 and primarily mandated to support the implementation of rural electrification development programs by providing the required technical and financial assistance to natural persons or corporate entities intervening in rural electrification. I. DESCRIPTION OF THE COUNTRY S SITUATION AND CONTEXT OF THE ENERGY SECTOR In Senegal, biomass and oil products still constitute 93.5% of the energy balance (figure 1), renewable energy sources (including hydropower) cover 0.6%, while mineral coal which appeared in this energy balance only in 2004 stand at 5.1%. The level of final energy consumption per capita is still very low, 0.21 toe in 2012, i.e. well below the African average (above 0.67 ton of oil equivalent (toe) and the world average (above 1.2 toe). Source: SIE-Senegal Source : UNDP Report

4 Figure 2: Domestic Supply per type of energy The weight of petroleum products in the country s energy supply is negatively reflected in the trade balance. In view of the current trends on the international oil market, this situation should be maintained, and even developed. The price of electricity in Senegal, primarily produced from hydrocarbons, is one of highest of the West African Economic and Monetary Union (UEMOA) zone. In terms of the populations' access to electricity, the level is still low and reveals a disparity between the urban and rural populations, judging by the electrification rate, which stands at 24% in rural areas and 90% in the urban areas. Despite of the strong dependence of its energy system on fossil fuels, Senegal has so far not been able to benefit from all its renewable energy resources available on its territory (interesting wind potential with average speed of 5 to 6 m/s on the northern coast, 3000h/annum of sunshine throughout the country and biomass resources from agricultural waste or residues, etc.). The country has embarked on the development of renewable energy sources since 1962 and enjoys a rich history in almost all the renewable energy sectors. However, the initiatives often took the form of pilot, fragmentary actions. Also, these numerous experiments and tests were not sufficiently capitalized to ensure that renewable energy sources fully play their part in the economic and social development of the country. Moreover, even though the political will was clearly expressed in national renewable energy policy documents, it was not underpinned by a prospective global vision, thus limiting the scope of actions undertaken, in spite of the existence of legal or administrative provisions in the 1970s and 1980s concerning incentives favorable to the use of renewable energy technologies. Despite the installation of these instruments, the use of renewable energy, particularly for the production of electricity, did not really take off except in the rural areas where autonomous solar systems and about ten photovoltaic power plants were installed within the framework of pilot rural electrification projects. However, in 1998, the law relating to the electricity sector drew the new electricity landscape of Senegal by introducing important reforms intended to accompany and support its liberalization with a view to promoting the development of the offer and access to electricity by independent operators. This major reform of the sector encouraged the introduction of the private sector in independent production and distribution segments in the rural areas. Moreover, since 2010, the energy sector registered significant improvement more favorable to the development of renewable energy with, in particular:

5 - the promulgation of two orientation laws on the promotion of renewable energy and biofuels (law n of 20 December 2010 and law n of 15 December 2010 respectively) ; - the adoption of Decree n on the application of the orientation law on renewable energy and relating to the conditions of purchase and remuneration of electricity produced by power plants from renewable energy sources as well as the conditions of their connection to the network; - the adoption of the Decree n on the application of the orientation law on renewable energy relating to the conditions of purchase and remuneration of the surplus electric power of renewable origin resulting from a production for clean consumption; - the creation, by Decree n of 17 May 2013, of the National Agency for Renewable Energy (ANER) to better deal with the promotion of the use of renewable energy, including bioenergy. Moreover, the State took measures to exempt from taxes and duties, the equipment intended for rural electrification in Also, with the signing of the Energy Sector Development Policy Letter (LPDSE ) in October 2012, the Government of Senegal was resolutely committed to promoting renewable energy. Indeed, taking into consideration the new orientation of this letter, the Government of Senegal was committed to achieving a renewable energy penetration rate of 20% in 2017 in the installed capacity, in order to reinforce the energy mix. Besides, special emphasis was laid on the acceleration of access to electricity for the rural populations with an objective set at 60% in 2016, the achievement of which depends, to a large extent, on the use of renewable energy technologies. At the institutional level, the implementation of this policy relies on four institutions of the sector required to play a decisive role in their different fields of intervention. These are: - SENELEC (National Electricity Company) to develop independent production from renewable sources (injection to the network; - CRSE (Commission for the Regulation of the Electricity Sector), organ for the regulation of the sector responsible for the definition of tariffs applicable by operators and the follow-up of concession contracts; - ASER (Senegalese Agency for Rural Electrification) to develop rural electrification through an approach based on public-private partnership and on the division of the country into ten rural electrification concessions awarded to

6 private national and international operators and the promotion of locally initiated rural electrification projects (ERIL); - ANER (National Agency for Renewable Energy) to promote the use of renewable energy (including the bioenergy) in all the sectors of activity (in particular agriculture, health, education, livestock production, etc.). III. REASON FOR THE FINANCING OF SOME SECTORS BY THE SREP The marginal use of renewable energy in the various sub-sectors mentioned above is mainly due: - the sometimes high cost of investments; - the preponderance of the extension of the network like rural electrification technology, - the non-existence of a feed-in tariff specific to electricity produced from renewable energy; - the insufficiency of technical data on the resources; - the non-existence of appropriate financing and tax incentive mechanisms, - the inadequate financing devoted to research and development programs for a better understanding of technology by nationals ; - the weak commitment of the national private sector. However, on the basis of orientation laid down in the Energy Sector Development Policy Letter (LPDSE), special provisions to help overcome these obstacles were made by the Government. In the field of rural electrification, the intervention strategy adopted the concept of technological neutrality which promotes the use of decentralized electrification technologies that are extremely suitable for sparsely populated rural habitations dispersed across a large area of national territory with partially covered electricity infrastructure needs. To implement this innovative approach on rural electrification realized within a framework of public-private partnership, the government of Senegal, allocates specific subsidies to renewable energy technologies for the implementation of priority programs for the electrification of habitations, depending on the financial resources available and based on an Output Based Aid (OBA) approach. In the same vein, the strategy for the promotion of renewable energy is operationalized through the generalization of solar street lighting and the electrification of basic social infrastructure (schools, health structures etc.).

7 In view of the above-mentioned factors, the mobilization of funding at the level of the SREP would help step up the necessary financial resources dedicated, inter alia, to the subsidies granted by the State for the promotion of renewable sources of energy in rural and peri-urban electrification. This mechanism will contribute, to a significant degree, to the access of rural areas of Senegal to large-scale electricity, in view of the ambitious objective of the Government to increase the rural population with access to electricity to nearly in 2016 against in IV. ENABLING ENVIRONMENT IN TERMS OF POLICIES AND REGULATIONS At the regulatory level, the reforms in the energy sector, which were initiated in 1998 through law n of 14 April, 1998, mark a watershed in the development of energy policies with the reinforcement of the institutional framework through the creation, among others, of the Senegalese Agency for Rural Electrification (ASER) and the Commission for the Regulation of the Electricity Sector (CRSE). It should be noted that other actors intervene in the promotion of renewable energies, namely: Private operators assignees of rural electrification concessions; The traditional operator SENELEC, entrusted with ensuring the densification and extension of the electricity network in its rural concession, in view of the electrification obligations that the State has mandated it to discharge; The National Agency for Renewable Energy (ANER) mandated to promote the use of renewable energies, particularly in the rural areas. The reforms being are being completed in order to provide the country with a better environment likely to reinforce the performance of the sector. With effect from 2010, Senegal has two orientation laws relating to the promotion of renewable energies and biofuels (law n of 20 December 2010 and law n of 15 December 2010 respectively); The first law was completed in 2011 by the adoption of two implementing decrees: - Decree n on the conditions of purchase and remuneration of electricity produced by power plants from renewable energy sources as well as the conditions of their connection to the network; - Decree n on the conditions of purchase and remuneration of the surplus electric power of renewable origin resulting from a production for clean consumption;

8 These two regulatory texts are decisive for the interventions of both the private and the public sectors even though the elements required to fix the repurchasing tariffs have not yet been adopted 3. However, the principle of competitive bidding is henceforth adopted for all new renewable power plant installations and government procurement procedures will be used in accordance with Decree n of 25 April 2007 instituting the Government Procurement Code. At the strategic level, the energy policy of Senegal lays emphasis on the following priority objectives: - diversify energy in order to reduce the vulnerability of the country to exogenous hazards, in particular those of the global oil market; - promote the development of renewable energy; - extend the populations' access to modern energy services while ensuring a more equitable distribution of efforts, giving priority to underprivileged regions and the vulnerable segments; - promote energy management and energy effectiveness. V. INSTITUTIONAL AND TECHNICAL CAPACITIES The complexity of the administrative procedures and the increased requirement of public utility users in terms of speediness, effectiveness and continuity led the State to create, in the energy sector since 1999, decentralized bodies under the name of agencies such as ASER, ANER and the Agency for Energy Saving and Management (AEME). The latter provides more flexibility in public management, which made it possible to appreciably improve performance in the implementation of projects and programs in the energy sector. These various structures, with the support of development partners (World Bank, African Development Bank, the European Union, German Co-operation, the French Development Agency, the West African Economic and Monetary Union, the Dutch Cooperation, the World Environment Fund, Spanish Co-operation) implement projects concerning: 1. The installation of photovoltaic systems and the realization of 09 solar power plants for an amount of $US The implementation of six (06) out of ten (10) rural electrification concessions for a total cost of $US with the private sector contributing 49.15%; 3. The realization of Locally Initiated Rural Electrification projects (ERIL) for an amount of $US ; 3 The consultant appointed to look into the issue has just submitted (last March) his report on the Project on technical assistance for the implementation of the Law on renewable energies in Senegal.

9 4. Solar street lighting with phase I estimated at $US ; 5. The electrification of 120 health facilities for an amount of $US ; The actions undertaken within the framework of these projects contributed significantly to stepping up the rural electrification rate from 15% in 2006 to 26% in However, the achievement of a rural electrification rate of 60% in 2016 and a renewable energy penetration rate of 20% on the power capacity installed in 2017 is still dependent on the mobilization of additional financial resources to complement resources provided by the State. The sluggishness of procurement and disbursement procedures can constitute risks that may affect the efficient implementation of the projects /programs and the achievement of the above-mentioned strategic objectives. VI. PROGRAMS OF MULTILATERAL DEVELOPMENT BANKS AND DEVELOPMENT PARTNERS The table below describes the projects and programs being implemented or in preparation with the support of development partners. Projects/Programs Development partners Areas of intervention Links with the SREP Program Diffusion of de access to Rural Electricity Services (DASER) IDA, European Union, KFW, French Development Agency (AFD), African Development Bank (ADB) -Implementation of 04 rural electrification concessions not yet assigned; -Densification in the 6 already assigned; -Development multisectoral projects. of energy Mobilization of additional resources to facilitate universal access and the doubling of the share of renewable energies in connection with Senegal s accession to the SE4ALL initiative. Promotion of Locally Initiated Projects for Rural Electrification (ERIL) and the development of rural women s entrepreneurship through the use of productive electricity use Dutch Cooperation, German Cooperation Electrification of remote sites with renewable energy technologies (mini network and individual system) and distribution of solar lanterns Mobilization of additional resources to complement the efforts of the State of Senegal

10 Ten-Year Solarpowered Public Lighting Program West Economic Monetary (UEMOA) African and Union Promotion of renewable energies Mobilization of additional resources for the sustainability of the program Contribution to the performance of the health sector in the rural areas Infrastructure development (ORIO) facility Electrification of health facilities in the rural and peri-urban areas Mobilization of additional resources for the generalization of the project throughout the country Table 3: Summary of projects