ENDA Energy, Environment, Development
Energy Security in West Africa The Case of Senegal
- Final report-
By Touria Dafrallah Enda Energy, Environment and Development Program
With the contribution of Mr Alioune Niang Ministry of Energy, Senegal
December 2009
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Executive Summary
The analysis of the Senegalese energy security situation presented in this report highlights the vulnerability of the country and the many challenges that it has to address. These challenges have to do with the need to reach development and economic growth targets, respond to the need of a young and growing population and mitigate the impacts of negative externalities (foreign dependence for conventional energy, vulnerability to climate change of biomass and hydro energy resources, etc) on the country energy supply.
This study looked at the socio-economic and energy profiles of Senegal, analyzed the energy security both at the national and household levels. The main findings of this study and key recommendations towards policy makers are summarized as follow:
Main findings:
Socio-economic and Energy profile of Senegal Like the majority of Sub Saharan African countries (SSA), the socio-economic situation of Senegal is characterised by a widening gap between demographic trends and economic growth. Although the GDP growth rate went from 5, 6% in 2004 to 6, 1% in 2005 (ADB, 2004), the Senegalese economy remains confronted to many difficulties. In terms of poverty, the country is ranked 157th out of 177 countries on the IDH (Index of Human development) scale.The country heavily relies on oil and oil derived products imports. Indeed, fossil fuels are the main type of energy used in Senegal. In addition the electricity produced is predominantly from thermal generation (90%) and the only source of hydropower is the Manantali dam with only 10% of the total production. This strong dependence on thermal generation is combined with a weak level of production efficiency (30% on average). There is also a strong dependence on biomass (firewood and charcoal) that heavily weights on household budgets. The transition to more modern (conventional) energy sources is a must in the current energy crisis especially in the context of a non-sustainable and inefficient management of forest resources combined to climate threats such as droughts and desertification. Shortages in the supply of electricity, LPG and other fuels during the current energy crisis (sharp increase in oil prices) confirm the vulnerability of the Senegalese energy system.
Energy security threats, measures and their impacts at National level The Senegalese energy supply is in a state of acute vulnerability. The vulnerability of the energy system at the national level is due primarily to the high dependency on foreign energy especially oil and petroleum products and the low diversification of energy sources as reflected by high values of the Herfindhal-Hirshman Index (HHI). A Net Energy Import Ratio (NEIR) above 50% shows that national resources cover less than half of the country’s energy needs. In addition, a significant part of the national energy supply comes from biomass. The NEIR ratio calculations excluding biomass give figures well above 90% and reflect the high foreign dependence of the country for conventional energy. This unsustainable dependency makes the country vulnerable to the Sharp fluctuations of oil prices in the international market and contributes to large increases in the countries energy bill. The recent energy crisis is a perfect illustration of the vulnerability of the country’s energy supply to unpredictable externalities. Prior to the 2005-2006 energy crisis, the vulnerability index 1 which measures the share of the energy bill on the country’s GDP ranged between 5 and 6 %. However, with the oil crisis there was a significant increase in the value of index 1 (9%) which describes the extent to which the energy bill drains the economic wealth of the country.
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The level of vulnerability can also be measured through the share of the energy bill in the total export earnings: Vulnerability (Index 2). During the crisis period the Index 2 has reached over 55 % compared to around 30 % prior to the crisis. The increase in the energy bill was somewhat attenuated by the fact that it was paid in foreign currency (USD) instead of FCFA. The high energy bill in 2006 (460, 8 billion FCFA) was somewhat attenuated by the decrease of the dollar value during the same period. If the USD-FCFA exchange rate had stayed at the 2000 level (711.976) the energy bill would have reached 627, 5 billion FCFA. This means an attenuation of the energy bill of around 167 billion CFA which represents around five times the total LPG subsidy.
The vulnerability of the overall energy system in Senegal is heightened by technical and infrastructural weaknesses such as insufficient storage and refining capacities, outdated production infrastructure and also by the lack of a security stock that meets international standards. The weakness of the energy infrastructure is mainly due to investment delays in production and storage infrastructure as well as refinery capacity. In addition, low energy efficiency in production, distribution and consumption sectors result in tremendous economic losses for the country.
Another characteristic of the Senegalese energy sector is the high dependency on biomass fuel and insufficient biomass resources which creates a situation of environmental vulnerability. The promotion of LPG as an alternative to biomass is threatened by the planned removal of the existing subsidy on cooking gas and the lack of control over the subsidies and their proper allocation or channeling to vulnerable groups.
Other factors that worsen the energy insecurity in Senegal are related to the inadequacy of energy policy measures. The Non sustainability of long term strategic energy options and the slow pace in implementing institutional reforms exacerbate the vulnerability of the Senegalese energy system. In addition we note the lack of sub-regional integration of energy policies.
The Department of energy in Senegal has recently elaborated a new Policy Paper with major measures to cope with the energy crisis and attenuate the energy vulnerability. Some key measures have been taken so far to strengthen the energy security of Senegal. For the hydrocarbon sector, the creation of a fund to secure petroleum products import is intended to insure a sustainable supply of petroleum products for the country. The increase in the government stake in refinery (SAR) is intended to help increase the output of the facility. Finally the expansion and the modernization of the refinery combined with support for the construction of storage facilities will help secure the supply in petroleum products for the country. In the Power generation sector, the hiring of power station from IPPs since May 2005 has secured an additional 48 MW capacity. The allocation of a grant (10 billion FCFA) along with a guarantee fund (12 billion FCFA) for fuel purchase should allow SENELEC to produce electricity consistently. A three month revolving credit from the Islamic Development Bank (17 billion FCFA) will also help the electricity utility (SENELEC) face its substantial fuel expenditures. An important investment program (175 Billion FCFA) will help in the gradual replacement of old power stations with low energy diesel generators. Other options are the use of renewable or alternative sources for electricity production and the development of sub-regional interconnection through OMVS and OMVG. For the biomass sector, with a dual context dominated by biomass and LPG, strategic measures will be aimed at securing the supply and demand for these two products. The continuation of the domestic energy program (PROGEDE) will strengthen both the supply and demand of biomass energy for households. The implementation in July 2009 of a program aimed at LPG supply and consisting in the application of true market prices is expected to support LPG imports and eliminate supplier’s speculations.
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Threats to energy security, measures for energy security and their Impacts at Household level
A number of threats to the energy security of Senegalese households has been identified. Overall, the lack of a reliable and sustainable supply of energy -especially electricity and LPG- impacts the quality of energy services provided to households. Frequent power outages leading to significant appliance damage and LPG shortages have been direct outcomes of the recent oil crisis. Furthermore, household supply-demand gap is accentuated by the sustained urbanization rate and demographic expansion (growing demand for energy and limited supply). Securing biomass energy supply at a sustainable price for households remains a quite challenging issue in the context of Senegal. Even though the government has set a Quota system, based on controlled permits for good management of charcoal production from forest resources, this could not prevent speculations of permits holders and intermediary agents in the supply chain of charcoal. This situation doesn’t not only contribute to the price rise of charcoal but also does it exclude grassroots communities from the profits generated in the biomass energy sub-sector.
The LPG program implemented since the early 70s has been successful in forcing a transition of most urban households from biomass fuels to LPG. This program has, in a way, fostered access to a clean cooking fuel, but, in another way, accentuated the dependence on imported LPG and worsened the energy vulnerability of the country. After boosting a significant development of the LPG market, the government has decided to withdraw the subsidy and let the market approach take it over. This subsidy removal is expected to lessen speculations around the LPG prices over the periods of LPG imports shortages, but leads to a brutal increase in LPG prices during energy crisis. Poor households are the most vulnerable group to tackle this transition due to the lack of financing mechanisms to facilitate access to a LPG ruled by international market fluctuations.
On the supply side, the investments of the government are not sufficient to address the infrastructure deficiency (lack of storage capacity and distribution facilities). As for the private sector involvement, the current institutional framework is not conducive to their contribution to the energy sector for the benefit of households’ access to clean energy. All these threats contribute to increase the vulnerability of households that are paying increasingly more for their energy needs to the detriment of other basic needs (health, education, nutrition, etc).
However, the introduction of some energy efficiency measures and the promotion of renewable energy were intended to address the energy access and management issues in the households’ sector. Some energy efficiency measures have been taken so far with initiatives such as PROGEDE (forests management, improved biomass stoves promotion, etc), the dissemination of low-energy bulbs by SENELEC, and the decision to apply a progressive tariff for electricity.
Various exemptions are granted to the Decentralized Rural Electrification concessions holders and are expected to contribute for the reduction of household’s electricity tariffs.
Solar electrification projects have had some positive impacts on poor households’ access to services. The impacts are rather in terms of women and children promotion through access to water, decrease in the daily chores (water pumping, collection and transport of firewood, manual extraction, grinding and transformation of cereal seeds) which result in time savings that can be better used for school homework and productive activities. In addition, there is a tendency towards costs reduction of renewable energy technologies due to the gradual scale-up of the market.
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Overall all, the impacts of the numerous measures for energy efficiency and renewable energies remain very limited and to make them more effective, the state should provide some supports through fiscal and financial incentives, awareness and interest building, education; incentives for the private sector, etc.
Key recommendations and policy options
The most recent policy paper elaborated in 2008, presents a comprehensive outlook of the energy sector and points toward strategic lines in order to secure energy for economic development and poverty alleviation and also to overcome the energy choc experienced due to the high dependence on oil products imports and the lack of financial capacities. The Policy Paper focuses on actions to secure energy imports, the extension and modernization of the oil refining and storage capacities, assistance to the utility for fuels supply and old plants replacement.
But again, all these actions are based on support from the government. The Private sector is called upon for limited interventions in power generation and distribution.
Though the government has been keen to the enhancement of storage capacities to secure a regular supply of oil products, it seems that the notion of strategic security storage is rather focused upstream; on the crude oil storage. One policy recommendation for coping with major unpredictable oil crisis is the installation of strategic storage capacity to allow oil products supply during oil shocks.
Biomass energy remains one of the critical vulnerability issues with a dual context dominated by biomass and LPG as domestic fuels. Sustainability of both fuels is threatened by external issues such as Climate Change (drought, desertification, etc) and international market fluctuations. In addition to continuing the present scattered actions, it is recommended to elaborate a comprehensive action plan to secure domestic fuels supply (for cooking, heating, etc.) including more alternatives sources of energy An in-depth analysis of the household energy sector is also recommended to determine the appropriate domestic energy mix taking into consideration technical, financial, geographical distribution and market aspects.
Renewable energy development remains among the options in the Policy Paper. It is recommended to concretize the policy will toward renewable through an appropriate action plan with the necessary incentives to overcome the identified financial and technical barriers and to promote a sustainable market transformation for renewable.
In terms of energy sources diversification, it is recommended to develop the sub-regional and continental cooperation. The OMVS, the OMVG and the WAPP offer appropriate frameworks for electricity generation form hydropower sources.
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Executive Summary ...... 2
List of Acronyms and Abbreviations ...... 8
Chapter 1- Introduction ...... 10
1.1. Background of the study ...... 10
1.2. Objective of the study ...... 11
1.3. Importance of the study ...... 11
1.4. Salient features of the energy sector in Senegal ...... 12
1.5. Rational for selection of Senegal for the case study ...... 12
1.6. Report structure ...... 13
1.7. Defining energy security in the case of Senegal ...... 13
Chapter 2- Methodology ...... 15
Chapter 3- Socio-Economic and Energy Profiles ...... 17
3.1. Main socio-economic indicators ...... 17
3.2 Current energy situation ...... 18
3.3. Energy scenarios / forecast ...... 23
3.4. National Resources availability ...... 24
3.5. Patterns of energy consumption in the households’ sector ...... 25
3.6. Energy efficiency in the households sector ...... 30
Chapter 4- Threats to energy security, energy security measures and their impacts at national level ..... 31
4.1. Threats to energy security ...... 31
4.2. Energy Security Measures and their impacts ...... 47
Chapter 5- Threats to energy security, energy security measures and their impacts at household level . 56
5.1. Threats to Energy Security ...... 56
5-2- Measures and their impact on energy security enhancement ...... 60
Chapter 6- Conclusion, recommendations and suggestions for the next phase ...... 72
Bibliography ...... 78
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List of Tables
Table 1: Pattern of the rural settlement by village size (2005) Table 2: Socio-economic indicators Table 3: Power equipment program Table 4: Energy resources of Senegal Table 5: Trends in the households’ energy consumption per product (ktoe) Table 6: Selected electrical appliances using energy (%) Table 7: Hydrocarbon deficit Table 8: Evolution of oil prices ($/barrel) Table 9: Recorded electricity breakdown Table 10: Evolution of investment budget of Senegal Table 11: Evolution of the peak power demand Table 12: Evolution of charges expenses and fuels Table 13: Evolution of rural subscribers (%) Table 14: Quantities of agricultural residue (1998) Table 15: Distribution of the expenditure of housing, water, electricity, gas and other fuels by sub group according to the type of residence Table 16: Powers of electric appliances used by households Table 17: Distribution of motorised vehicles by age Table 18: KWh cost according to the option of electrification
List of figures
Figure 1: Evolution of GDP and population in Senegal Figure 2: Domestic energy supply in Senegal Figure 3: Total final consumption per energy type Figure 4: Distribution of final consumption per product Figure 5: Distribution of final consumption per sector Figure 6: Sector consumption of conventional energy Figure 7: Electricity production in 2005 Figure 8: Trend of the electricity production Figure 9: Distribution of the energy Mix Figure 11: Trend of Households Energy Consumption per product Figure 10: Distribution of fuel types in the SENELEC production Figure 12: Distribution of the households according to their energy consumption Figure 13: Distribution of households according to the residence location and thus cooking fuel Figure 14: Evolution of LPG consumption Figure 15: Evolution of LPG Consumption according to the processing type Figure 16: LPG price with and without subsidies Figure 17: Distribution of the households according to the source of lighting Figure 18: Energy dependence rate Figure 19: Overall efficiency of SENELEC power stations Figure 20: Evolution of non-supplied energy Figure 21: Evolution of net energy production Figure 22: Evolution of LPG subsidy
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List of Acronyms and Abbreviations
ANSD Statistics and Demography National Agency- Agence Nationale Statistique et Démographie Senegalese Agency for Rural Electrification ASER (Agence Sénégalaise d’Electrification Rurale) BEE Energie Saving Bureau - Bureau d’Economie d’Energie BID Islamic Bank of Development (Banque Islamique de Développement) BOO Build Own and Operate EE Energy Efficiency Economic Community of West African States ECOWAS (Communauté Economique des Etats de l’Afrique de l’Ouest, CEDEAO) Professional training center CFPP (Centre de Formation Professionnelle et de Perfectionnement) CGSUV Centre for Global Studies University of Victoria CIF/FCA Cost, Insurance and Freight CSS Senegale Sugar Company (Compagnie Sucrière du Sénégal) Electricity Sector Regulation Commission CRSE (Commission de Régulation du Secteur de l’Electricité) DIPROM Company for Metal Products (Enterprise de Produits Métalliques) EDF Electricity of France (Electricité de France) ENDA Environment and Development in the Third World (Environnement et Développement du tiers Monde) ESAM Household Energy Survey in Senegal (Enquête Sénégalaise Auprès des Ménages) FAO Food and Agriculture Oganization FEMA Forum of Energy Ministers of Africa FCFA Franc CFA (Currency in Senegal and some other West Africa countries) FOB Free on Board Fund to Secure Petroleum Products Imports FSIPP (Fonds de Sécurisation des Importations de Produits Pétroliers) GNESD Global Network for Energy and Sustainable Development GTI Greenwich Turbine Incorporation GWh Gigawatt hour GDP Gross Domestic Product HIPC Heavily Indebted Poor Countries (Pays Pauvres Très Endettés) ICS Chemical Industries of Senegal (Industries Chimiques du Sénégal) IDH Human Development Index (Indice du Développement Humain) IPP Independent Power Production JICA Japenese International Cooperation Agency Ktoe Kilogramme tonnes oil equivalent LPDSE Energy Policy Paper (Lettres de Politique de Développement du Secteur de l’Energie) LPG Liquefied Petroleum gas LV, MV, HV Low, voltage, Middle Voltage, High voltage NGO Non Governmental Organization Gambia River Basin Development Organisation OMVG (Organisation de Mise en Valeur du Fleuve Gambie) Senegal River Basin Development Organisation OMVS (Organisation de Mise en Valeur du Fleuve Sénégal) PETROSEN Senegal Petroleum Comapny (Société des Pétroles du Sénégal)
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Pop Population PREDAS Regional Program to Promote Household and Alternative Energies in the Sahel PROGEDE Sustainable and Participatory Energy Management Project Recovery Plan of the Energy Sector PRSE (Plan de Redressement du Secteur de l’Energie) Senegalese-German Household Domestic Fuel Project PSACD (Programme Sénégalo-Allemand pour les Combustibles domestiques) PV Photovoltaic RE Renewable Energy RETs Renewable Energy Technologies SAR African Refinery Company (Société Africaine de Raffinage) SDE Water Supply Company (Société de Distribution d’Eau) SEMIS Energy Service in the Sahel (Service de l’Energie en milieu Sahélien) SENELEC Senegal National Electricity Company (Société Nationale d’Electricité du Sénégal) SENSTOCK Petroleum Products Storage Company (Société de Stockage de Produits Pétroliers) SICAP Cap-Vert Estate Company (Société Immobilière du Cap Vert) SIE Energy Information System (Système d’Information Energétique) SINAES (Société Industrielle Nationale de l’Application de l’Energie Solaire) National Society for Oil Seeds commercialization/ SONACOS (Société Nationale de Commercialisation des Oléagineux du Sénégal) SOCOCIM Cement Commercial Society (Société Commerciale du Ciment) SSD Decentralized Services Company (Société de Services Décentralisés) SWH Solar Water Heater TAG Gas Turbine (Turbine à Gaz) TBS Gross schooling rate (Taux Brut de Scolarisation) Toe Ton oil equivalent UPEA Urban and Peri-Urban Energy Access V / kV Volt / Kilo Volt W / kW / MW Watt / kilo Watt / Mega Watt Wp / kWp Watt peak / kilo Watt peak WAEMU-UEMOA West African Economic and Monetary Union (Union Economique et Monétaire Ouest Africaine) WAPP West African Power Pool
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Chapter 1- Introduction
1.1. Background of the study
In Senegal, the Energy sector Development Policy paper (LPDSE) published to cover a specific timeframe (generally many years) constitutes the guideline or basis for the energy sector development strategy. The Policy paper of 1997 focused on four main objectives: o Eliminate inefficiency factors o Reduce the supply costs burden for consumers o Expand funding for energy sector development o Encourage a sustainable and participatory management system for forest energy resources.
A revision of these objectives took place in 2000 to integrate key aspects of an energy sector reform that was introduced by the government during the 1998-2000 period. The revised version of 2000 featured new governmental measures as well as a timetable for their implementation.
The 2003 Policy paper was geared toward sustainable development objectives and focused on the fight against poverty and also on outstanding social, economic and environmental issues. This Paper featured: i) the reorganization of the electricity sub-sector; ii) the strengthening of competitive market conditions and the improvement of product quality in the oil sub-sector iii) the step up of sedimentary basins promotion activities ; iv) the strengthening of sustainable management practices for forest resources.
The analysis of the 2003 Policy paper shows that priority is given to the following areas: • Population Access to modern energy solutions, in particular the electrification of rural areas; • Rationalization of the supply, production and distribution of energy, with a commitment to the long term interests of the country • The development of the local energy resources; • The protection of the environment through the diversification of domestic fuel types and the use of renewable energy sources and clean energy technologies.
More than four years after the adoption of the 2003 Energy Policy paper, the Senegalese energy sector is still unable to guarantee a sustainable supply of energy services in order to meet the many development challenges and alleviate poverty.
This vulnerability of the energy sector was most highlighted during the recent oil crisis, caused by an increase in oil prices on the international market. During this period the Senegalese energy sector was shaken by frequent power outages and fuel shortages (LPG and other fuels).
The nature of this energy crisis, characterized by a sharp rise in crude oil prices and persistent side effects, convinced the Senegalese Government to review its energy policies and draw a new strategy in the form of an Energy Policy paper for the 2007-2012 period.
This new policy will aim at achieving three major goals, namely: i) to guarantee a sufficient and sustainable supply of quality fuel for the country at lower costs; ii) to Increase access to energy services by the population; iii) to reduce the country vulnerability to negative externalities, in particular the fluctuations of oil prices in the international market.
The analysis of the impacts both at the macro and micro level of the various policies and measures undertaken by the government over more than two decades should help us appraise the relevance of the actions taken so far to contribute to energy security in the country.
In Senegal the concept of Energy security takes a new dimension when you consider country specific dynamics. In fact the issue of energy security was inadequately taken into account by the government and was only expressed through political statements that were not matched with corresponding concrete programs and incentive measures.
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The analysis of energy security in Senegal, focus of this study, should give us some insights on the energy situation of a developing country with very limited sources of conventional energy and where national resources are either threatened, as in the case of biomass, or unexploited in the case of renewable energy sources.
1.2. Objective of the study
General objectives: This paper describes energy security related issues specific to Senegal and main impacts of energy insecurity at the macro and household level. It also offers an analysis of the responses of main stakeholders to mitigate the impact of energy insecurity.
Specific objectives: a) At the national level:
1) Analyse the threats (present and future) to energy security in Senegal 2) Analyse the different measures/strategies for energy security in the context of Senegal 3) Study the impacts of the measures to improve energy security (past, existing and potential) b) At the household level:
1) Analyse the threats (present and future) to energy security; 2) Analyse the measures (past, existing, and potential) to improve the energy security and; 3) Analyse the impacts of the measures/strategies on energy security.
1.3. Importance of the study
Senegal is striving to achieve a harmonious and sustainable development. However, achieving this target has been difficult in a country that mainly relies on an unpredictable international oil market to fulfil its growing energy demand. To remediate to this situation, the country seeks to develop a strategy to strengthen its energy sector in a way that will allow both the enhancement of local energy production capacities and the improvement of living conditions for the most vulnerable part of its population.
Given its strong dependency on foreign energy and the fluctuation of the international oil market, Senegal is facing an energy crisis like most non-producing oil countries of the developing world. The impacts of this crisis are most reflected through the sharp increases in oil expenditures that affect the balance of payments at the macro-economic level, and the production system in general. It makes the energy system unbalanced, particularly on the households’ side where the purchasing power and living conditions are worsened. Since the first oil crisis of 1973 and later 1979, energy efficiency initiatives have been identified as potent strategies to attenuate the negative effects of foreign energy dependency on the economy.
We acknowledge the fact that, in the case of Senegal, speaking about energy efficiency measures seems unrealistic because the per capita energy consumption remains very low, 0.19 toe for the total final energy and 0.014 kWh/capita for electricity in 2006 (SIE Senegal, 2007). But, it is wise to remind that these low per capita figures reflect the fact that a large part of the country total population does not have access to conventional energy (electricity and oil products). Indeed the per capita energy consumption becomes important when we consider only that part of the population that is actually supplied with conventional energy. Accordingly, it can be potentially beneficial to introduce alternative energy sources (renewable energy), but also to use energy efficient equipments (such as light bulbs and electric household appliances which use less energy) and promote rational behaviour or habits in energy management.
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The present study highly relevant especially during, the ongoing energy crisis; it represents an opportunity to initiate an effective dialogue between the different stakeholders which will lead to the design of a guideline for energy policy making. Based on the analysis of the Senegal case, the results can be applied to neighbouring countries with similar characteristics: foreign oil dependency, Intensive use of biomass, high population growth rate.
1.4. Salient features of the energy sector in Senegal
The supply of primary energy is characterized by the prevalence of fossil fuels and biomass that account respectively for 52% and 43% of the total supply. Coal, hydro-electricity and natural gas account altogether for 5% whereas the contribution of renewable energies remains very negligible and does not go beyond 0.05% (2.5 MW).
The oil bill is paid in foreign currencies, which destabilize macro-economic aggregates. The Senegal oil bill went from 185 billion FCFA in 2000 to 327 billion FCFA in 2005, and 353 billion FCFA in 2006.
Ninety per cent (90%) of power generation is from thermal processes and hydro power accounts for only 10% (Direction de l’Energie, 2007).
The frequent oil shortages deteriorate the quality of service in the electricity sub-sector (frequent power outages) and affect the LPG supply which in turn increases the pressure on forest resources such as charcoal and wood.
A chronic dependency on foreign energy which accounts for nearly 55% of the country energy supply if biomass production is included and for around 98% if biomass is excluded. (Direction de l’Energie, 2007)
1.5. Rational for selection of Senegal for the case study
To explore the theme of Energy Security, we have chosen to conduct a case study of Senegal for three main reasons:
1- The energy dependency factor:
The energy sector is characterised by an inherent vulnerability due mainly to its strong dependency on foreign imports and the concentration of its supply around two main sources: oil and biomass. The respective share of biomass and hydrocarbons imports on the total energy supply of Senegal has reached respectively 35% and 53% in 2005 (Direction de l’Energie, 2007). Thus, this almost dual structure (imported oil and biomass) leads to potential risks for energy shortages and makes it difficult for Senegal to develop a sustainable and cost effective energy supply scheme or strategy. This situation results in two types of insecurities and vulnerabilities namely:
a- An economic and financial insecurity which is caused by soaring oil prices and the associated oil bill burden that negatively impacts the balance of payments. Two important sectors of the Senegalese economy use a large part of the total oil supply. They are the transportation and manufacturing industries which account respectively for 37% and 14% of national consumption (Direction de l’Energie, 2007). In those industries, energy expenses represent a significant part of production costs. Therefore, the ability of these sectors to maintain high productivity and remain competitive is strongly and directly affected by the rise in the price of oil and oil derived products.
As for the households sector, it accounts for 46% of the total energy consumption. Domestic fuels (wood and charcoal) accounts for 76% of the household consumption, oil products 17% and electricity 7%. Therefore, this sector is highly vulnerable to biomass shortages. This risk is increased by the constant threat of drought, and also deforestation caused by the lack of an integrated and comprehensive management strategy for natural resources.
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The growing use of LPG by households increases even more the already substantial energy bill of the country. This represents an additional burden for the government which is subsidizing this product, adding hence more pressure on public finances.
b- An environmental insecurity which is due to the massive and irrational harvesting of forest resources, mainly to meet the needs of the households , small and medium-size companies and the craft industry. Recent estimates indicate that 77.667 ha of forest have already disappeared due to an abusive exploitation of resources to meet energy needs (Direction de l’Energie, 2006) .This situation has severe implications on the biodiversity of forest ecosystems.
2- The political will and the various measures and initiatives taken
a- To secure access to energy sources: Since 1998 Senegal has undertaken reforms of its energy sector to enable a secure and sustainable access to energy by its population. Such reforms carried out in all energy sub- sectors need to be analyzed in order to assess their relevance in the efforts to achieve energy security.
b- To secure energy efficiency: After the second energy crisis which occurred in 1979, Senegal was one of the first countries in the region to recognize the necessity to secure its supply of energy through energy efficiency measures. Many initiatives were planned in several sectors of the economy.
3- Data availability
The choice of Senegal is also justified for technical reasons, related to the availability of usable data. Indeed, the majority of the West Africa countries have very limited continuous statistical data series that extends over long time periods .However, the set up of an Energy Information system (SIE) in Senegal has facilitated data collection and processing.
1.6. Report structure
This report on the topic `Energy Security' in Senegal includes the following chapters: • Presentation and analysis of different components of the energy sector • Identification and interpretation of the threats to energy security at national and household levels • Evaluation of the impacts of the energy insecurity at the macro-economic and household levels • Analysis of the measures and actions taken to reduce the impacts of the energy crisis • Identification of future actions related to the topic (in-depth study, political dialogue, strengthening of capacities, etc)
1.7. Defining energy security in the case of Senegal
The energy security, in the Senegal case, has to be discussed in a special context characterised by:
1- A high dependence on oil imports 2- Prevalence of thermal sources for power generation 3- The low storage capacity for imported energy and absence of strategic storage capacities 4- Prevalence of biomass in the total energy volume 5- A gap between energy supply and demand 6- Low use of renewable energy, in particular photovoltaic, thermal solar energy, and modern biomass and hydroelectricity for power production 7- Commitment to sub-regional co-operation 8- Important projects and population growth requiring capacity building
The definition of energy security in Senegal was discussed during the first debate on energy security organised on 11th February, 2008, which gave diverse results. Indeed, the issue of energy security was perceived
13 by the participants from many points of view including supply, diversification and energy efficiency, infrastructure, political aspect or regional co-operation.
The conclusion of the brainstorming session around the definition of energy security is presented in the synoptic table below: Point of view Defining Energy Security Technical, economic and financial capacity to secure an energy supply with a minimal shortage risk. To Make available the required energy to meet all the population needs To ensure a sustainable supply of energy so as to facilitate access by the economic actors to quality energy services at a good price. To ensure the supply of energy under the optimal conditions while cognizant of the obligation to Energy meet economic growth and poverty alleviation targets Supply and Continuous and secured supply of energy at low cost Access To meet the energy demand at any time while keeping the highest service standard To ensure a sustained supply to the populations in terms of energy resources under acceptable economic and environmental conditions. Energy security means that the government will take measures guarantee a correct and sustained supply of energy services for the country. First, ensure a regular supply and distribution of energy, then, reduce the external dependence. Energy in sufficient quantity at a moderate price Build infrastructure for storage, transport, and distribution. Consistent infrastructure investment in the energy sector. Infrastructure Increase in the fossil fuel storage capacity and make sure that harbour installations can accommodate larger size tankers. To have enough quality infrastructure Availability and diversification of energy sources, transformation capacity and products availability. Political will followed by concrete actions. Diversification Diversification of the energy sources. and Energy Investment in renewable energies and energy efficiency. Efficiency Sound Policies to control energy through energy efficiency and energy sources diversification measures that would allow for the same cost to stabilize or reduce oil prices. Energy management through saving and efficiency. To have legal and regulatory framework which guarantees that the country interests is taken into account in contract negotiations with multinationals , and also to secure the long run stability of the strategic options Policy Efficient communication policy Control of the energy sector in terms of information and decision – strengthening of the energy companies: incentives for the private sector, technology selection control, positive institutional environment - Environmental Safety. Regional To develop sub-regional interconnections in order to benefit from the support of development Cooperation structures.
The various definitions given confirm the lack of a common understanding of the Energy Security concept. Each actor defines it from either a supply or a demand point of view and based on technical or financial aspects. Most of the definitions provided were expressed in terms of potential measures to increase energy security. For the case of Senegal where energy supply relies on imported fossil fuels and decreasing forest resources, and where the technical efficiency of the energy system is low, and the storage capacity is insufficient, the appropriate definition of the Energy Security concept would be: Reduced vulnerability to interruption of energy imports (Diversification, technical efficiency, financial resources, storage capacities, etc) and availability of sustainable national resources (local resources, demand side management) in order to meet the growing energy needs in sustainable manner and at affordable prices.
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Chapter 2- Methodology
The study will be based on:
• A literature review and analysis: available energy policy papers (global review and sector analysis) and studies related to the theme. • Collection of socio-economic and energy information; • Discussions with experts in the field • Exchanges with the different stakeholders on the energy security topic: Organize a first debate meeting to introduce the aims of the study, to refine the concept of energy security in the context of Senegal, and to identify relevant issues. Organise meetings to present and refine the results of the various analyses.
The study will relate to:
• Analysis of the energy security through relevant indicators both at the macro-economic and households levels; • Evaluation of the impacts of energy insecurity through indicators at the macro-economic and households levels; • Presentation and analysis of measures and actions undertaken to reduce the impact of energy insecurity; • Proposal of future actions within the framework of the study; • Recommendations that would stimulate a political dialogue around the energy security issue.
The analysis of the energy security will be based on relevant indicators both at the macro-economic and households level.
At the macroeconomic level: The energy security will be evaluated through the following indicators:
• Dependency on energy imports: Net Energy Import Ratio
• Energy supply diversification: Herfindhal-Hirshman Index (HHI) (Grubb et al., 2006)
• Vulnerability index 1 = Expenditure on energy imports / GDP
• Vulnerability index 2 = Expenditure on energy imports / Total export earnings
• Storage capacity of the oil products: length of supplies autonomy
• Dependency on traditional energy: Biomass
• Investments in energy/national budget
• Productivity/efficiency of the energy system (Electric, oil, etc)
• Diversification of power generation sources (HHI) for power supply
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At the household level:
Energy security will be evaluated through the following indicators:
• Access rate per energy type: power, LPG, Biomass • The households’ energy mix: level of diversification of energy sources • Rate of energy services failure: power outages, LPG (shortages), Biomass (deforestation) • Household expenditure on energy • Distribution of cooking fuels
The impacts of energy insecurity at the macro-economic and national level will be analysed through the following indicators:
At the macro-economic level • Imported energy bill • Energy subsidy bill • Production costs of the alternative solutions: Power generators of Aggreko • Supply shortages frequency • Impacts on environment: use of traditional biomass, pressure on forest resources
At the household level • Households’ supply shortages: power and LPG shortages • Energy price increase
Impacts of the measures undertaken to reduce energy insecurity will be analysed through the following indicators:
At the Household level: • Evolution of the penetration rate of LPG • Decrease in the charcoal consumption (alternative energy) • Increase in the electrification level in rural and urban areas
At the Macroeconomic level: • Diversification of the actors involved (IPPs) • Increase in the SAR capital by increasing the governmental share • Increase in the share of renewable energies in the energy balance • Increase storage capacity
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Chapter 3- Socio-Economic and Energy Profiles
3.1. Main socio-economic indicators
Like the majority of Sub Saharan African countries (SSA), the socio-economic situation of Senegal is characterised by a widening gap between demographic trends and economic growth.
In 1976, the population of Senegal was estimated to be around 5.100.000 inhabitants. From this period the population has significantly increased reaching 6.900.000 in 1988 and 9.858.482 in 2005 (ANSD, 2007). According to official demographic forecasts from the Senegalese Statistics and Forecasting Agency (ANSD) the population in 2007 is 11.519.226 of which 23% lives in Dakar. The growth rate of the population is between 2.7 and 2.5 %; this corresponds to a doubling time over 25 years (ANSD, 2007).
The rural population accounts for 59% of the total population and it is spread over 13212 villages generally of very small size ,Indeed, 75% of the villages have less than 500 inhabitants (see table 1).
Table 1: Pattern of the rural settlement by village size (2005)
Location class Pop<500 500
This information on rural population distribution patterns could be used in the rural energy access decision making process. Indeed, it would help in the choice between centralized and distributed energy options (renewable energies, in particular solar energy or hybrid systems).
Decentralized photovoltaic generation technologies are already proven to be the least cost solution when the village lies further than 5.4 kilometers from the transmission grid (Contreras, 2007). In 2006, the labor force (active population) accounted for 51, 62 % of the total population (ESAM II, 2004). Unfortunately, only about 39,1% are working and the unemployment rate is 3, 2%.
Today, the rate of economic dependence or inactive persons (pupils, retired, etc) compared to the number of active persons accounts for 1, 6% (Report on the socio-economic development of Senegal, 2005).
In such a situation, there is a steady deterioration of the population’s social conditions. This affects negatively education, health, housing, etc.
The table below shows some socio-economic indicators for the country.
Table 2: Socio-economic indicators Indicators Values Year Population 11 343 328 2007 * Population growth rate 2,4 % 2004 Economic dependency rate (-15 et +65 years old) 1,6% 2005 Unemployment rate (15 to 64 years old) 3,2% 2005 Rate of active population 39,1% 2005 % of working children (6 to 17 years old) 28,8% 2005 Rate of maternal mortality (for 100 000 births) 401 2005 Proportional mortality Rate due to Malaria (%) 20 2003 Life expectancy (years) 54 2004 Occurrence of HIV /AIDS among adults (%) 0,7 2004
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Gross schooling rate (TBS) primary school 62,7% 2006 Illiteracy rate 40,9% 2006 Level of Electrification 42% 2005 Level of Urbanisation 40,7% 2006 GDP growth rate (%) 6,1 2005 Incidence of poverty on households (%) 53,9 2002 Incidence of individual poverty (%) 65 2002 Rank IDH over 177 countries 157 2004 Source: Report on the socio-economic development of Senegal, 2005. * Estimates
The combination of all these factors encourages rural and international migration, fosters insecurity and accelerates the development of informal settlements around the urban areas (peri-urban slums).
Moreover, the population is growing linearly with time, whereas the GDP is rather instable (fluctuating). Thus, from 1980 to 1986 the GDP was in a decreasing phase, and then started increasing from 1987 to 1993 right before the CFA devaluation1.
Although the GDP growth rate went from 5,6% in 2004 to 6,1% in 2005 (ADB, 2004), the Senegalese economy remains confronted to many difficulties. In terms of poverty, the country is ranked 157th out of 177 countries on the IDH (Index of Human development) scale.
Figure 1: Evolution of GDP and population in Senegal
Evolution of GDP and Population 12000
10000
8000
6000
4000
2000
0 1980 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 GDP (Market price, in millions of $ US) Population *1000
Source: Selected data on African countries, African Development Bank 2004
3.2 Current energy situation
3.2.1. Primary energy demand
The Senegalese primary energy consumption (2739 ktoe) includes in general oil products (51.7%) and biomass (43.51%) except charcoal, in addition to hydroelectricity; natural gas and solar energy (see figure1).
1Sharp devaluation of the CFA franc in 1994 to help African exports
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Figure 2: Domestic energy supply in Senegal
Source: SIE – 2006, Senegal
3.2.2 Energy consumption
The final energy consumption in Senegal is estimated at 1972 ktoe in 2005 that is 0.19 toe per capita (Direction de l’Energie, 2006). Final energy consumption went from 1920 ktoe in 2000 to 2203 in 2006 thus represents a 15% increase over 6 years (SIE, 2006). The distribution of this consumption in terms of energy type, product or sector is presented below.
Consumption per energy type The final energy consumption is dominated respectively by the fossil fuels (52.9%), biomass (34.5%), electricity (7.6%) and then mineral coal (4.8%) as indicated in the following graph.
Figure 3: Total final consumption per energy type
Source: Direction de l’Energie, 2006, Senegal
Firewood consumption reached more than 1 million tons in 2005, while charcoal production reached 342 thousand tons. This represents an annual consumption per capita of biomass fuel of 102.5 kg and 28.7 kg for wood and charcoal respectively (in 2005).
Biomass accounts for 34.8% of the total energy consumption in 2005 and 76% of the households’ final energy consumption.
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Consumption per product The graph below displays the distribution of the final consumption by product in 2005 and points to the fact that diesel oil and firewood are the main products with respectively 23.4% and 22.5%, followed by jet fuel with 12.7% and charcoal with 12.2%.
The prevalence of diesel reflects the increase in the vehicle fleet while high biomass consumption is due mainly to the urge to satisfy domestic energy needs (cooking) both in rural and urban areas.
Figure 4: Distribution of final consumption per product
Source: SIE - 2006, Senegal
Consumption per sector The households and transportation sectors account for 83% of the total final energy consumption in 2005. Household’s consumption prevails in the structure of final energy consumption with 45.8% and the transportation sector comes second with 40% of the total consumption.
The high share of households in the total final consumption profile can be explained by the fact that biomass is used in large quantities to meet the domestic energy needs.
Moreover, the share of the industrial sector remains low and accounts for only 14% of energy consumption. The agricultural sector which involves almost 60% of the population, consumes only 1.6% of the modern energy used in Senegal. Indeed this sector remains characterised by manual labour for the production and transformation of agricultural products.
Figure 5: Distribution of final consumption per sector
Source: SIE – 2006, Senegal
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When we exclude biomass from the consumption profile, the transportation sector takes the largest share with 56.6%, followed by the households sector. The sector distribution of conventional energy is as follow:
Figure 6: Sector consumption of conventional energy
Source: Enda Energy compilation, based on SIE – 2006, Senegal
The electricity sub-sector
The electricity sub-sector is characterized by the high thermal based generation for production (90%) and heavily relies on imported fossil fuels. This production comes from two sources: the public power company SENELEC that generates 83% of the electricity and the independent power producers (IPPs) that provide only 17% of the production. We note that only 10% of this production is from renewable sources .The graph below displays the distribution of power generation capacity in 2005.
Figure 7: Electricity production in 2005
Electricity production in 2005
600
500
400
300
200
100
0 2005
SENELEC Plants GTI Manantali Aggreko TOTAL
Source: SIE – 2006, Senegal
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Figure 8: Trend of the electricity production pattern
Modes de production d'électricité au Sénégal
2 500
2 000
1 500 GWh 1 000
500
- 2000 2001 2002 2003 2004 2005
Centrales Thermiques - Parc SENELEC Centrales Thermiques - Parc Autoproducteur Centrale Hydroélectrique Production décentralisée - Parc solaire Source: SIE – 2006, Senegal
Figure 9: Distribution of the energy Mix
70% 60% 50% 40% 30% 20% 10% 0% GTI MANANTALI SENELEC Power Plants AGGREKO Auto production/
Industries
Source: SIE – 2006, Senegal
Figure 10: Distribution of fuel types in the SENELEC production
Fuels 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Fuel Oil Diesel Oil Gasoil Natural Gas Kerosene
Source: SIE – 2006, Senegal
In 2002, after the Manantali2 dam started to generate power, the production of hydroelectricity became an important source in the energy mix of Senegal.
2 The Manantali Dam is a hydroelectric dam on the Bafing River, 90 km to the south-east of Bafoulabé, in Mali's Region. It is managed by the Organization for the Development of the Senegal River (OMVS). The dam irrigates 2,550 square kilometers of land and maintains the navigability of the Senegal River between Saint-Louis, Senegal and Ambidédi, Mali.
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3.3. Energy scenarios / forecast
This section includes forecasts developed by SENELEC for the electricity sub-sector, and SAR for the fossil fuel sub-sector. It also includes the energy independence forecast expressed in the new energy strategy of Senegal.
Other projections in terms of access to energy services are also presented. They relate to the objectives laid down in the ECOWAS White Paper3 , finalised and approved in 2006.
Forecasts for energy independence by 2020
In the recently completed energy sector development policy paper (February 2008), the Senegalese Government reaffirmed its commitment to initiate a Reform of the Energy sector (PRSE). This plan should allow Senegal to lower its dependence on fossil fuels of at least 20% by 2020, by exploring options such as renewable energies, hydro electricity and bio-fuels.
Electricity Sub- sector: Development plans for 2007-2015
The strategic objectives for the development of the production capacity are as follows: • Introduction of high capacity power plants to meet the demand • Diversification of the energy sources with the introduction of mineral coal and hydropower within the framework of the OMVS and OMVG • Increase production plants availability • Secure fuels supplies and increase the storage capacity
Planning of production system development:
Planned infrastructure: 60 MW in 2008, 2x70 MW in 2009-2010 and 125 MW in 2015 through IPP Coal plants
Planned unit withdrawal: 2x2 MW in 2008 and 2x2 MW in 2009
Secure balance between Supply and Demand • Combine the following actions to reduce the deficit which is estimated to be 25,9 MW in 2007 and 36,5 MW in 2008 ; • Repowering of 20MW plants and set up 60MW plants, introduction of Aggreko Power Generators for 2x13MW • Short term OMVS program to control electricity demand
The table below displays the planned equipment program
3 In December 2003, ECOWAS was mandated by its Member States to define a Regional Policy for Access to Energy. Alongside UEMOA, a regional framework was created in consultation with multiple sectors to ensure dialogue between Member States and the region. This framework is made up of National Multi-sectoral Committees for each country, grouping all the sectors concerned. Each of the committees is represented by the 2 members in charge of energy and the PRSP within the Regional Multi-sectoral Committee. The participatory process put in place allowed the White Paper to be drawn up for a regional policy for access to energy services for rural and peri-urban populations. Based on the consensus as to the necessity to develop access to energy and to put in place national strategies necessary supported by the regional framework, the White Paper proposes an action plan and investment program.
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Table 3: Power equipment program PROJECTS Capacity Deadline SENELEC Production New power station of KAHONE 2 60 MW 2008 Second extension of the power station of Ziguinchor 5 MW 2009 Extension of the power station of Tambacounda 2 x 3 MW 2009 Rehabilitation C3 (Sections 301, 302, 303) 2008 Upgrade C4 2008 Rehabilitation Program of C3 2007-2015 Total SENELEC investment (Billion Francs CFA) 73,213 Projects in IPP BOO Diesel at Tobène 2x70 2009 BOO Charcoal at Sendou 125 MW 2011 2nd Charcoal Project 125 MW 2015 Total IPP investment (Billion Francs CFA) 277 Sub-region Production Hydro power projects of Félou 60 MW 2011 Hydro power projects of Gouina 140 MW 2012 *Hydro power projects of Sambagalou 125 MW 2012 Hydro power project of Kaléta 240 MW 2012 Total SENELEC investment (Billion Francs CFA) 474,55 Source: SENELEC, 2008
Projections in the oil sub-sector
The planning in this sub-sector are mainly about increasing production capacities through: • Increase the SAR refinery distillation activities to reach 2 then to 3 million Tons • Increase reforming activities from 14 to 20T/h in order to ensure the increase in LPG production. • Storage network development • Extension of the sea line and the capacity to allow large crude oil tankers up to 160,000 T to anchor in the harbour • Extension of the sea line and build up of the capacity to accommodate LPG tankers up to 15,000 T to anchor in the harbour
The forecasts included in the ECOWAS White Paper
The expected results of the regional policy relate to the improvement of the access to energy services by 2015 expressed in these figures:
• 100% of the total population will have access to a modern cooking fuels; • At least 60% of people living in rural areas will reside in localities with access to motive power to boost productivity and also have access to modern community services; • 66% of the population living in rural and urban areas will have access to individual electricity services.
These objectives are laid down in Senegal through the energy development policy paper which aims particularly at reaching a rate of rural electrification of 50%; 95% in urban areas that is 75% at the national level in 2012
3.4. National Resources availability
Energy Resources
Senegal has an oil potential of approximately 100 million cubic meters in the southern part of the country (Casamance), but no drilling has been done yet. This oil is rich in bituminous product which means that only 30% of the potential resources will be converted in oil.
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There is a natural gas reserve estimated at ten 10 billion cubic meters however that figure needs to be confirmed before taking the decision of using it to produce electricity through combined cycles.
In 2005, the production of natural gas from the Gadiaga field reached 15.9 million m3.This production was supplied to SENELEC for electricity production using gas turbines (TAG). However, electricity produced from natural gas remains insignificant in comparison to generation from imported fossil fuels.
A peat field estimated at 52 million cubic meters was identified, a long time ago, on the main coastal area (grande cote). However, an environmental assessment recommended not to go ahead with exploitation plans. Indeed, the peat layer acts as a sponge which holds moisture and reduces water infiltration. This makes the Niayes4 very suitable for farming activities.
Apart from fossil fuel, Senegal has a strong renewable energy potential. Biomass is estimated at 250 Million m3 in 2005, solar energy at 6kWh/m²/day and average wind speed can reach up to 5m/s in some areas. In addition, hydroelectricity contributes significantly to the country energy production and has a potential of 1000 MW.
Table 4: Energy resources of Senegal Resources Sites Potential Biomass Mainly in Tambacounda, Kolda, Casamance 331,3 millions m3 Oil In Dome Flore in Casamance (Heavy oil ) 100 millions m3 Natural gas Senegal 10 milliards m3 Diamniadio 400 millions m3 Peat Niayes 390 millions m3 Hydro-electricity Senegal river andt Gambie 1000 MW Solar photovoltaic Whole country 6kWh/m²/day, 3000 hours sunshine Wind Energy The large coast 5 m/s Sources: ENDA-GNESD, RETS I Study, 2005
Other Energy Types
Agricultural and animal residues represent a very interesting energy potential, but they are either under-exploited or simply wasted. Only few industries, in particular agro-industries, like SONACOS (vegetable oil production) and CSS (sugar cane company), use agricultural residues (peanut shells, bagasse, etc) for co-generation. For a few years, the government has expressed a real interest in the promotion of biogas. Bio-diesel draws a very strong interest. Senegal has defined an important production program of bio-diesel based on Jatropha (NJP5).
3.5. Patterns of energy consumption in the households’ sector
In Senegal, households use energy mainly for cooking, lighting, refrigeration and ventilation. Firewood is the main energy resource used in the Senegalese households (450 Ktoe/year since 2000). It is followed by charcoal which exceeds 200 ktoe. LPG is in third position and rapidly growing owing to the financial incentives introduced by the government (LPG subsidy). Electricity and kerosene contribute to a lesser extent to the households needs.
4 The Niayes are a geographic region in the north east of Senegal characterized by dunes and very suitable for the development of fruit and vegetable farming 5 National Jatropha Program
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Table 5: Trends in the households’ energy consumption per product (k toe) 2000 2001 2002 2003 2004 2005 Firewood 435,7 446,4 453,3 453,3 447,1 444,6 Charcoal 227,1 231 209,1 231,6 230,4 241 LPG 111,5 109,6 116,5 127,5 138,8 147,9 Kerosene 19,9 21 22,2 21,7 17,9 10 Electricity 34,2 40,4 44,4 49,9 49,6 59,5 TOTAL 822,3 848,5 845,5 883,9 883,6 903,1 Source: SIE-Senegal, 2006
Figure 11: Households Energy Consumption per product (ktoe)
Source: SIE-2006, Senegal
The distribution of households according to fuel consumption shows that wood is used by nearly 50% of the households, followed by charcoal (26.7%), the LPG (16.4%), then electricity (6.6%) and kerosene (1.1%).
Figure 12: Distribution of the households according to their energy consumption
Source: ESAM II
Uses of energy in the Senegal household sector
We note that there is no information available on per capita or per household consumption for cooking and lighting and other end uses in urban areas. In addition as of yet no study was conducted to assess the differences in different types of energy use (LPG, electricity, kerosene, charcoal, fuelwood) between the poor and non-poor households. We present below all the information available on energy patterns by households.
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Cooking: For the cooking energy requirements, the use of fuels varies according to the area. Indeed, LPG dominates in urban environments (69.5% of urban households use LPG). In fact, 87.2% of the Dakar households and 45.9% of the households in the other cities use LPG. It represents, indeed, the cooking energy of the most affluent households. On the other hand, in rural areas and at the national level biomass predominates (81.9% and 51.5% of households use charcoal or firewood for cooking).
Figure 13: Distribution of households according to the residence location and thus cooking fuel
Source: ESAM II
LPG consumption trends in Senegal: LPG consumption in Senegal needs to be highlighted given the many impacts for households and the government. A program to promote LPG use in Senegalese households is carried out since 1974.This program was developed to attenuate the effects of drought and deforestation. The goal of the program was to increase LPG consumption and decrease the reliance on biomass among the most vulnerable part of the population. At first (1974) a cooking stove with an attached LPG cylinder containing 2.7 kg LPG was promoted and later in 1983 a more solid cooking stove with a 6 kg LPG cylinder which was better adapted to the cooking habits and income levels was also subsidized. In addition the Senegalese government exempted all LPG-related equipment from custom duty and eventually subsidized the LPG itself in 1976.
This program, which focused on the distribution of 2.7 and 6kg LPG bottles (Called popular gas6), has resulted in an annual increase in LPG consumption from 3.000 Tons in 1974 to nearly 140.000 Tons in 2005; this represents an average annual growth rate of 10 to 12% (Direction de l’Energie, 2007).
The transition from biomass to LPG was gradually achieved, especially in the urban area. It resulted in a new domestic fuel consumption profile in urban areas characterized by the use of LPG and charcoal. However, in peri- urban and rural areas firewood and charcoal remain the main domestic fuels.
LPG accounts for 7.6% of the total energy consumption in 2006 and 16.40% of final energy consumption among the households. Its consumption per capita is 12.5 kg per year.
6 Popular gas is the name given to 6 and 2.75 kg LPG bottles because they are the most popular bottle sizes among poor households.
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Figure 14: Evolution of LPG consumption
Source: SIE – 2006, Senegal
Figure 15: Evolution of LPG Consumption according to the size of the bottle Botlles amount Evolution of LPG Consumption by bottle size 120000
100000
80000
60000
40000
20000
0
83 85 86 87 88 89 91 93 94 95 96 97 99 01 02 03 19 1984 19 19 19 19 19 1990 19 1992 19 19 19 19 19 1998 19 2000 20 20 20 Blip banekh (2.7 kg) Nopalé ( 6 kg) Total of Popular Bottle size (2,7kg + 6 kg) Total of traditional bottle (12.5 & 38 kg) Total
Source: SIE – 2006, Senegal
The LPG subsidy has led to a very significant price reduction of the 2.7 kg and 6 kg LPG bottles. The graph below displays the price of this product with and without subsidy.
Figure 16: LPG price with and without subsidies
Costs FCFA LPG price with and without subsidies
6000 5000 4000 3000 2000 1000 0 9 Kg 6 Kg 2,7Kg Prices without subsidies Price with subsidies
Source: SIE - 2006 Senegal
The sustained LPG consumption trend and the increase in the cost of fossil fuel in the international market led to a significant increase in the volume of LPG subsidy to the point where the government took the decision to gradually remove the subsidy. The immediate effect of the subsidy withdrawal was a dramatic change in the price of LPG .Indeed, the price of the 6 kg bottle went from 1,300 CFA francs to 2,500 CFA francs in 2006.
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Following this decision to remove gradually the subsidy, and apply true market prices, household’s energy security becomes a significant issue in a context where the level of energy access remains weak and the basic social needs are not met.
The LPG program has ensured a relative energy security (LPG supply) to the benefit of the households, but it has in addition, contributed to the deepening of the energy insecurity of the country at a macro-economic level. Indeed, the increase in the demand for LPG had an immediate corollary effect. The increase in the LPG demand contributes to the overall dependency of the country on foreign energy and its vulnerability to negative externalities (unpredictable fossil fuel international market) .In addition, the high consumption rate calls for the development of additional infrastructure to strengthen storage capacities for the product and attenuate the vulnerability of the country to fossil fuel shortages in general and LPG shortage in particular.
This aspect will be discussed in the section devoted to the analysis of the energy security among the households.
Lighting At the national level, 41% of the households use electricity for lighting. This proportion varies according to geographic areas. Indeed, 76.1% of the households in urban environment (85.7% in Dakar) use electricity for lighting against only 9.9% in rural areas.
Kerosene lamps are the second source of lighting (28.4% at the national level) and represent the first source of lighting in rural areas (44% of the households).
Apart from these two sources, the households also use candles, LPG, solar and power generator and biomass. Some energy types like candles are mainly used in substitution of electricity in urban areas during power outages. The figure below displays the distribution of the households according to sources of lighting.
Figure 17: Distribution of the households according to the energy source of lighting
Source: ESAM II, 2004
Electrical appliances In rural areas the most used appliances are those that use low amounts of energy to run (e.g. radios).The use of high energy consumption (sewing machines, Refrigerator/freezer , etc) appliances is still very weak in rural areas. The lack of financial resources also justifies the difficulties to purchase electrical appliances.
Table 6: Selected electrical appliances using energy (%) Equipments Dakar Other towns Urban Rural Senegal Television 55 39 48 7 26 Radio 81 75 79 73 76 Refrigerator/ Freezer 38 25 32 2 16 Modern cooker 9 4 7 2 4 Iron 8 3 6 0 3 Car 11 7 9 1 5 Sewing machine 10 10 10 3 6 Source: ESAM II
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3.6. Energy efficiency in the households sector
In the household sector there is significant energy efficiency potential for both cooking fuels and electricity uses. The energy efficiency options can be differentiated according to the income levels of the households as follows:
Wealthy households They use increasingly more modern and cleaner fuels and devices such as LPG and improved stoves for their cooking needs. This is in fact the main reason behind the success of the introduction of LPG in Senegal. Indeed, the LPG subsidy program has more benefited rich households who have enough financial resources to purchase modern LPG stoves and LPG cylinders. The transition of wealthy households to LPG and the introduction of more efficient biomass stoves have all contributed to biomass energy efficiency. Substitution from traditional cooking equipment to improved stoves increases energy efficiency from 15% to 40%. In the electricity sector, there is strong energy efficiency potential through the introduction of low energy bulbs in wealthy households. Accordingly, SENELEC has developed a pilot energy efficiency project covering 688 households to evaluate its feasibility on a larger scale. This will help assess the effectiveness of this measure in improving energy service quality (reduction of power outages caused by peak demand that often cannot be met) and in decreasing households’ electric bills.
Poor/rural households They still use biomass (wood and charcoal) to satisfy their cooking needs. The three-stone stove, with an efficiency of 0.1%, remains the most used cooking device in poor urban and rural areas. Improved stoves, with an energy efficiency of up to 40%, make a weak penetration in those areas because of the high upfront prices and the lack of organisation and financing mechanisms to make them affordable to all. In addition, in spite of the subsidy, access to LPG by poor has remained low because of various barriers such as financial capacities to purchase LPG devices and lack of distribution outlets at decentralised level to meet the demand of the scattered habitat in rural areas. The development of domestic biogas, as cooking energy efficiency option, has experienced a low progress. Several initiatives were launched but their impacts have remained weak. In the electricity sector, a Clean Development Mechanism (CDM) energy efficiency project (Senegal Rural Lighting Efficiency project)7 is being developed by ASER with support from the World Bank. The ASER Rural Energy Efficient Lighting Program is a component of a rural electrification plan that will provide communities (around 365,000 rural households within five years) with affordable access to power. This program will provide about 1,500,000 compact fluorescent lamps that will be installed instead of incandescent light bulbs at the time of rural electricity connection in Senegal. These energy efficient light bulbs can run up to five or six times longer than a conventional bulb and will result in savings on households’ power bills and in decreasing greenhouse gas emissions.
7 This Senegal Rural Lighting Efficiency project is based on the installation of Compact Fluorescent Lamps (CFLs) in newly electrified households and buildings, instead of the commonly used and least cost option, the Incandescent Light Bulbs (ILBs). ASER finances the rural domestic consumer’s interior installations. Between 2008 and the end of 2013, the installation of 1.5 million CFLs in Senegal rural areas will generate mean annual electricity savings of 45 GWh.
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Chapter 4- Threats to energy security, energy security measures and their impacts at national level
The following chapter focuses on the identification of the different threats to energy security and gives some indicators that will help evaluate the vulnerability of the energy sector at the macro-economic level. This analysis is conducted for the different energy sub-sectors (hydrocarbons, electricity, biomass) and focuses on the availability of resources as well as financial, technical and institutional aspects.
In addition, the chapter describes the different measures taken so far to attenuate energy insecurity and tries to appraise the impact of these measures at the national level.
The main indicators used in our analysis of vulnerability are:
• Foreign energy dependency and the fluctuation of the international oil market: the Net Energy Import Ratio (NEIR). • The energy import bill in FCFA and in US Dollars • The exchange rate : FCFA/US Dollars • The level of diversification of energy sources and energy suppliers: The Hirschmann-Herfindahl Index (HHI). This indicator can be used in the case of Senegal to measure the level of concentration for the energy sources and also the energy suppliers. • The share of energy bill in the GDP : Vulnerability Index 1=Bill in FCFA X Intensity X Bill in $ X Exchange rate • The ratio energy bill/export revenues: Vulnerability Index 2 • The storage of imported energy products (vulnerability of the infrastructure):Security Stock • Energy intensity: energy supply level/ GDP: measures the efficiency of the overall energy system and its responsiveness to the variation of the oil market. • Biomass dependence: the share of biomass in the total supply of primary energy. This indicator is useful because of the limited biomass resources: forest degradation (Quota policy) • Technological shortcomings (vulnerability of the infrastructure ):productivity of the power and refining infrastructure (technology obsolescence) • Energy policies: the strategic decisions in the energy sector are not fully implemented (follow up measures). • Institutional framework
4.1. Threats to energy security
The energy situation in Senegal as described in chapter 3 highlights a state of energy vulnerability and a number of threats to energy security with various levels of impacts. In this chapter the most important identified threats to be analyzed are as follows: • High external dependency for energy supply • Low diversification of energy sources and high dependency on oil • Sharp fluctuations of oil prices and heavy energy bill • Low strategic storage capacity • Investment delays in production and storage infrastructure as well as refinery capacity • High dependency on biomass and insufficient biomass resources • Lack of control on LPG subsidies and their proper allocation or channeling to the target groups • Low energy efficiency in production, distribution and consumption sectors.
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Other factors worsen the energy insecurity in Senegal:
• Non sustainability of long term strategic energy options • Slow pace in implementing institutional reforms in the energy sector • Climate hazards leading to insufficient hydro power production • Lack of sub-regional integration for energy policies • Global geopolitical situation
The current energy crisis due to the sharp increase of world energy prices shows and confirms once more the acuity of energy security threats faced by the country.
4.1.1. Main threats
The analysis of different threats in this chapter will be carried out following a sub-sector approach focused on the hydrocarbons and electricity sub-sectors which are the main supply chains of energy. Furthermore, these sub- sectors are the most exposed to external fluctuations in oil prices. The biomass sector will also be addressed in the analysis given its significant contribution to the energy system in Senegal and its extensive use in combination with other commercial energy sources particularly for household supply.
Threats will be presented and analyzed based on the main selected indicators.
A- Hydrocarbon sub-sector Senegal is confronted to a situation of strong foreign dependence for its energy supply. The Net Energy Import Ratio (NEIR) is above 50% and shows that national resources cover less than half of the energy needs. The NEI is increasing over the years and shows the need to import increasingly more energy products to meet the growing needs of the country.
Evolution of the NEIR: Biomass included
2000 2001 2002 2003 2004 2005 2006 NEI (kToe) 1424.5 1469.4 1461.1 1488.1 1631.7 1510.7 1751.4 DS (kToe) 1206.4 1235.1 1288.3 1294.4 1302.9 1240.8 1240.2 NEI+DS (kToe) 2630.9 2704,5 2749.4 2782.5 2934.6 2751.5 2991.6 NEIR=NEI/(NEI+DS) % 54.14 54.033 53.14 53.48 55.6 54.9 58.54 Source: data from SIE, Senegal compiled by ENDA Energy
The NEI ratio is more important, almost a 100%, when we exclude biomass from our calculations. This shows the high foreign dependence of the country for conventional energy.
Evolution of the NEIR: Biomass Excluded 2000 2001 2002 2003 2004 2005 2006 NEI (kToe) 1424.5 1469.4 1461.1 1488.1 1631.7 1510.7 1751.4 DS (kToe)-Biomass 12.4 17 49 72.1 75.1 48.9 33.3 NEI+DS (kToe) 1436.9 1486.4 1519.1 1560.2 1706.8 1559.6 1784.7 NEIR=NEI/(NEI+DS) % 99.13 98.85 96.18 95.37 95.59 96.86 98.1 Source: data SIE, Senegal compiled by ENDA Energy
Energy imports results in a high oil bill that is paid in foreign currency. The energy bill has grown substantially especially after the 2006-2007 oil crises. This high energy bill in 2006 (460,8 billion FCFA) was somewhat attenuated by the decrease of the dollar value during the same period. If the exchange rate had stayed at the 2000 level (711.976) the energy bill would have reached 627,5 billion FCFA.
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This means an attenuation of the energy bill of around 167 billion CFA which represents around five times the total LPG subsidy.
• To complete the analysis of the impacts of foreign dependence it is important to assess the level of energy vulnerability through the analysis of the diversification level of the energy sources. Foreign dependency does not necessarily mean vulnerability if the supply sources are well diversified8.
The HHI index computed for the case of Senegal’s supply in primary energy can give some ideas about the level of concentration of the energy sources.
The HHI is computed using the following energy sources:
1- Biomass, Charcoal, Oil and petroleum products, Natural Gas, Other energy sources 2- Biomass, Charcoal, Oil, Natural Gas, Other energy sources and petroleum products taken separately
For configuration 1, we have: 2000 2001 2002 2003 2004 2005 2006 HHI 4972 4978 4884 4831 4580 4540 4765
The high HHI values reflect the weak level of diversification of energy types in the supply of primary energy. In fact the energy supply of Senegal is focused mainly on biomass, fossil fuels and to a lesser extent hydropower and natural gas. The drop in the index in 2002 and later in 2004 shows a slight diversification trend with the introduction of natural gas in 2002 and coal in 2004.This decreasing trend is sustained until 2006 where we go back to a higher level of concentration because of the lack of supply in crude oil: Imports consisted mainly of the major companies’ imports because of the refinery shut down in 2003.
For configuration 2, the HHI index is as follows: 2000 2001 2002 2003 2004 2005 2006 HHI 3494 3406 3320 3873 3610 3670 3629
When we use a non aggregated approach (configuration 2) for HHI calculation the HHI values are smaller and show the diversification of imports through the import of refined products in addition to crude oil. In summary the level of concentration remains high in both configurations because the energy mix does not include alternatives such as nuclear and renewable energy types and hydroelectricity accounts for a small share of the total supply.
Other aspects of vulnerability related to the energy system
The consequences of the strong foreign energy dependency at the macroeconomic level can be analyzed through the vulnerability index that measures the share of the energy bill in the GDP; that is Vulnerability Index1.
2000 2001 2002 2003 2004 2005 2006 Energy Imports Expenditure 184.252 212.1 198.100 247,200 278,500 431,600 460,800 Milliard FCFA GDP/PIB (Milliard FCFA) 3114.0 3575.5 3717.6 3960.8 4198.5 4536.4 4842.5 Index 1 (%) * 5.91 5.93 5.33 5.82 6.04 9.46 9.59 Source: ANSD/MEF *ENDA Energy Calculations
8 Denis Babusiaux, Edgard Gnansounou and Jacques Percebois, ENERGY VULNERABILITY: THE RIGHT INDICATORS
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Prior to the energy crisis (2005-2006) the vulnerability index 1 ranged between 5 and 6 %. However, with the crisis there was a significant increase in the value of index 1 which describes the extent to which the energy bill drains the economic wealth of the country.
Since the imports are made in USD and to take into the fluctuations of the exchange rate of the period 200-2006 we calculated the index 1 using the energy import expenditure in USD. This shows that if the exchange rate did not decrease during the crisis period the vulnerability would have been more important. The vulnerability index 1 varied from around 9.5 to 18.2 in the period 2005-2006.
2000 2001 2002 2003 2004 2005 2006 Energy Imports 258.9 289.5 284.2 425.3 527.2 818.2 881.3 Expenditure Millions USD GDP/PIB 3114.0 3575.5 3717.6 3960.8 4198.5 4536.4 4842.5 Milliard FCFA Exchange rate 711.976 733.039 696.988 581.200 528.285 527.468 522.890 FCFA/USD* **Index 1 % 8.3 8.1 7.6 10.7 12.5 18.01 18.2 * UNP Statistical Yearbook (Fifty-first issue) 2008 **ENDA Energy Calculations
At the macro-economic level the vulnerability can be measured through the share of the energy bill in the total export earnings: Vulnerability index 2.
2000 2001 2002 2003 2004 2005 2006 Energy Imports 184.252 212.1 198.1 247,2 278,5 431,6 460,8 Expenditure Milliard FCFA Export Earning 654.9 735.3 743.4 730,6 797,4 832,4 833,5 Milliards FCFA Index 2 28.1 28.8 26.6 31.6 32.0 51.9 56.6 Source: BCEAO
During the crisis period the share of the energy bill in the total export earnings has reached over 55 % compared to around 30 % prior to the crisis.
Deficit in resources
Because of the lack of a sustainable and significant fossil fuel potential (Oil or natural gas), Senegal will remain a country that heavily relies on oil and petroleum product imports to meet its increasing energy needs. The table below shows the evolution of the national hydrocarbon production and consumption.
Table 7: Hydrocarbon deficit (toe) Year 2000 2001 2002 2003 2004 2005 Oil production 0 0 0 0.2 0.3 0 Petroleum product consumption 1743 1769 1799 1916 2062 1905 Hydrocarbon deficit 1743 1769 1799 1915.8 2061.7 1905 Deficit (as a % of the consumption) 100% 100% 100% 99.99% 99.98% 100% Source: SIE-Sénégal, 2006, Enda Energy compilation
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The table shows a 100 % deficit in the hydrocarbon sector and an almost total external dependency. Overall, if we consider the low production of natural gas and hydro electricity, the dependence rate is currently at 98 %, excluding biomass energy which contributes a great deal to meeting the country energy needs. If biomass is taken into consideration, the energy dependence is much less important and does not exceed 55%.Therefore, any fluctuation in the world market price for oil and petroleum products will inevitably impact the country’s ability to secure the required level of energy supply to sustain its economic activities and social system.
The chart below gives the evolution of the energy dependence rate in Senegal with and without biomass
Figure 18: energy dependence rate
Energy dependence is defined as the ratio between primary energy imports (oil, natural gas, hydropower, solar, biomass) and the total availability of primary energy for a given year
Source: SIE-2006, Senegal and Enda Energy compilation
The ratio (petroleum products imports /total des imports) fluctuated between 17.7% and 19,3% during the same period.
Technical constraints
Hydrocarbon supply is threatened by major technical difficulties that are compounded by the dramatic increase of world oil and petroleum prices. Refinery, storage and distribution capacities are the most important technical constraints. Refinery facilities: In Senegal there is only one refinery owned by ‘Société Africaine du Raffinage’ (SAR). This refinery is crucial to the security of the petroleum products supply given its various activities including, oil and petroleum products imports, refining, storage, distribution and transport of petroleum products. The process currently used by SAR is rather basic, based on an atmospheric distillation column, a reforming unit for gasoline, a vacuum distillation unit for gas oil and a “Merox” unit for kerosene softening (Hyrdo-Skimming refinery type). Given the characteristics of its plants which came on stream in 1963, SAR is compelled to process only one type of crude oil (Bonny) to optimize its yield output. The Bonny crude is more expensive than the Brent and its processing does not give SAR sufficient profit margin and flexibility in the refinery process.
Table 8: Evolution of oil prices ($/barrel) Barrel / US $ 2003 2004 2005 2006 2007 31 January 2008 Brent 28.83 38.25 54.39 65.14 72.48 92 Bonny Light 28.77 38.22 55.61 97.03 74.78 94.03 Furthermore, the refinery has a significant production deficit. Currently the built in capacity is 1.2 Million tons (Mt) whereas the market supplied by SAR is 1.8 Mt out of which 200,000 tons go for exports. Senegal is therefore constrained to import refined petroleum products to fill the refinery deficit gap. A 2 Mt capacity, at least, is required to meet the demand for refined products. As a result of the current oil crisis, SAR is experiencing major financial difficulties which led the company to shut down production in March 2006 and stop its commercial activities in July 2006. As a consequence, the country has immediately experienced shortages in petroleum products supply.
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These difficulties led to an 85 billion FCFA (129 million Euros) debt owed by SAR to its suppliers and banks and 29 billion FCFA in commercial losses.
Storage facilities Petroleum products storage is at the heart of the energy supply problems, particularly during oil crisis periods. Indeed, there is a deficit in the storage capacity of SAR. The current capacities do not meet the company’s requirements for operational stock and strategic security stocks. The storage volume can secure only 35 days of the country’s consumption for each product, whereas the international standard for security stock is at least 90 days for each product.
LPG storage A major component of the energy supply security remains the needs to have a sustainable LPG supply to meet the increasing demand for this product since the implementation of the LPG program in 1974. It is worth highlighting that subsidies were allocated to 2.7 and 6 kg LPG canisters deemed “popular gas” which currently accounts for 95 % of the total consumption of the country. Nowadays, the consumption is as high as 140 000 tons whereas the supply by the SAR refinery is limited to 10 000 tons. The balance is met through imports and therefore exposes the country to the risk of supply breakdown due to the fluctuations of the international market. The main threats to LPG energy supply security are as follows: Lack of storage capacities which do not exceed 10 500 tons The Sea-line length for LPG unloading which is just 1.4 km The maximum size of imports which do not exceed 5 000 tons
Institutional and regulatory constraints
The hydrocarbon sub-sector reforms were carried out since 1998 are based on: its liberalization, the removal of monopolies in the energy supply and distribution chain and access’ to storage facilities and products from the SAR refinery by more private companies. Despite the political will, the sub-sector has been experiencing problems with supply, storage, transport and distribution. The Oil crises have dramatically contributed to exacerbating supply insecurity. These issues and their impacts on the petroleum product supply are analyzed hereafter.
Refinery facilities: In order to keep fulfilling the growing demand for petroleum products, the SAR refinery is kept operational mainly with the government intervention.
Until the 2006 oil crisis, the state owned a 10 % share in the company whereas the remaining 90 % were owned by the majors (54% Total, 23 % Shell and 13% by Mobil). The low share of the state in the company had always raised questions about the ability of the government to make decisions in the hydrocarbon sector. Indeed, the state does not have the minimum share required to veto any key decision taken by the board of directors.
The increasing demand of the country for petroleum products and the high dependency on a single type of crude oil have triggered the debate about the necessity to modernize and expand the refinery plant.
However, given its weak decisional power over the company, the government was never in a position to get through its claim to modernize the plant. On the other hand, SAR has always claimed the necessity by the state to revise the petroleum products pricing policy to ensure the cost-effectiveness of the investments required for the plant modernization.
Petroleum products imports: The analysis of Senegal imports shows that SAR is still benefiting from an almost exclusive monopoly regarding imports despite the reforms. Since 2003, only a few imports licenses have been granted to other companies (5 companies so far). In fact, the liberalization decision was not coupled with effective implementations measures.
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Hydrocarbon storage Storage facilities are owned by SAR and other multinational companies. In this case also, despite the liberalization, there is not a single Senegalese company with storage facility and capability to import and store petroleum products. The new independent companies involved in imports do not have free access to storage facilities. They must therefore use SAR storage facilities for their supply subject to the payment of a fee.
It is worth highlighting that during the refinery shut down in 2006, only companies who own storage facilities were able to import to satisfy their market shares. Independent distributors had to go through these companies to meet the demand of their customers. The occurrences of speculative behavior led to increased prices and to a situation where market prices are set above official prices. Stocks disruptions were recorded due to the dysfunctions in the distribution networks of independent distributors.
Pricing policy
The liberalization of the energy sub-sector in 2000 aimed at reinstating the application of a true market price policy under the new hydrocarbon legal and regulatory framework (law 98-31, 14 April 1998) based on the principle of prices indexation on world oil prices. Government concern about the direct impact of oil prices on final consumers and the attenuation of this impact, led to the introduction of subsidies particularly for LPG instead of a reform of the pricing policy. Although the non implementation of indexation measures contributes to securing household energy supply, it continues to increase the financial burden on the government. Furthermore, the pricing structure, unchanged since 1998, includes a commercial tax on the sales of petroleum products which, in a situation of crisis does not offset SAR losses and negatively affects the security of the country’s energy supply (e.g. refinery activity shut down in 2006).
Hydrocarbon sector financial constraints
Oil and petroleum prices experienced since 2003 a dramatic increase in the international market. The price of one barrel of Brent recorded an increase of 219% between 2003 and end January 2008 e.g. a 3.2 fold increase. Oil prices continue to record new peaks since January 2008.
In 2005, SAR imports reached 425 billion FCFA (654 millions ’Euros) of which 214 billion FCFA (Euros 330 millions) for oil and 211 billion FCA (Euros 324 millions) for refined products (SAR, 2002). This figure does not take into account imports by the Majors who hold import licenses. The ratio (petroleum products Imports /Total imports) fluctuated between 17.7% and 19.3% during the 2000-2005 periods.
As a result of the high energy bill, oil imports accounted for more than 55 % of the total exports in 2005 and were the main factor of the trade balance deficit. This ratio (petroleum products imports/ total exports) was just 37.4% in 2000. Moreover, energy subsidies lead to a structural dysfunction of the energy sector exacerbated by the oil shocks and the inability of the state to pay on time the subsidies and secure the energy supply.
61% of the 6kg LPG price comes from the public subsidy while the price of the LPG bottled in 2.7 kg is subsidized to 81% in order to increase the market share among low income people who are used to purchase the latter type of LPG. In 2003, the subsidy was 13 billion FCFA whereas in 2006 it has reached 31 billion FCFA.
The table below summarizes the hydrocarbon sector constraints, characteristics and impacts.
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Type of constraints characteristics Impact Non availability of oil resources 100% gap between production and consumption High dependency on imports Resources availability High external dependency
Vulnerability towards world market risks and oil prices volatility Lack of refinery capacity Non satisfactory supply with locally refined Non flexibility of refinery plant: petroleum products of national market processing limited to a single crude Petroleum products imports oil Dependency on a single and very expensive crude Technical Lack of storage capacity oil Lack of infrastructure to Breakdown of refinery activities accommodate large tankers Limited autonomy in petroleum products Limited security storage stocks shortages Monopoly of the refinery company Imports monopoly (SAR) Supply failures Delays in implementing political Domestic price speculation decisions Non regular supply of petroleum products Institutional and Lack of warranty for a healthy regulatory competition regarding imports and storage Lack of incentives for storage facilities investment. Distortion of pricing structure LPG subsidy policy which boosts the Double invoice for both imports and subsidy domestic market and increases LPG Negative impact on balance of payment: 55% of imports exports income allocated to oil and petroleum Financial Hard currency to access oil and products imports. petroleum products supply Increased production costs of goods and services and competitiveness’ deterioration Increased food product prices.
B- The electricity sub-sector
Technical constraints
Production structure The major constraint of the electricity sub-sector lies in its high dependency on thermal generation technology and on fossil fuels. The thermal electricity production system includes power stations owned by SENELEC on one hand and by Independent Power Producers (IPPs) on the other hand. The difficulties encountered in the oil sub-sector are therefore impacting the electricity sub-sector for which the supply is inevitably threatened. Furthermore, prices of natural gas which supplies one of the gas turbines are indexed on fuel oil and are therefore experiencing similar problems. Frequent power outages as well as excessive production and commercialization costs are signs of the impact of the oil crisis on the electricity sub-sector.
Obsolescence and efficiency of production plants
The total installed power generation capacity (SENELEC +IPPs) is 565 MW. However given the old age and inefficiency of some power plants, the real capacity was only 472 MW in 2005. The average overall efficiency of SENELEC power stations was approximately 30 % between 2000 and 2005 and that of IPPs was about 22,3%. SENELEC losses are approximately 446 GWh, that is 21,2 % of the energy going through its network. This situation has worsened in August 2007 with a record loss of 23%.
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Figure 19: Overall efficiency of SENELEC power stations
Overall efficiency of SENELEC Power station
32% 31% 31% 30% 30% 29% 29% 28% 28% 27% 27% 2000 2001 2002 2003 2004 2005
Energy Efficiency
Source: SIE-Senegal, 2006
Electricity production is experiencing a deficit. The production system does not satisfy the energy demand. In spite of its reduction in 2003, the level of non-supplied9 energy has been increasing from 2004 to reach a high record in 2005, under the effect of the energy crisis.
The chart below gives the evolution of the non supplied energy during the 2000-2005.period.
Figure 20: Evolution of non supplied energy Evolution of non supplied energy [Base 100 in 2000] 180
160
140
120
100
80
60
40
20
0 2000 2001 2002 2003 2004 2005 Trend of non supplied energy
Source: SIE-Senegal, 2006
The distribution network Investments delays are noticed in the production infrastructure as well as in the electricity transport and distribution networks. Since the 1992 rehabilitation, there were no investments and major works in this area to cope with the increasing charges of 6,6 and 30 kV units sources in Dakar and other regions. As a result, planned work in 1999 has started to be implemented only in 2003.
Low voltage: the 110/220 voltage is still used in Dakar city and is generating significant technical losses. Its substitution with the 220/380 V should contribute to substantially reduce the technical losses which could be divided by three for the same charges.
9 The deficit between supply and expressed demand
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Little work has been carried out by SENELEC since the implementation of a World Bank project dealing with the substitution of 110/220 voltage lines by 220/380V.In fact the work carried out annually from SENELEC budget have not yet led to the total replacement of 110/200 voltage lines in Dakar. Furthermore, the existence of LV networks and connections with non protected copper in Dakar and some towns inside the country contribute to increasing breakdowns (see table 9 below)
Table 9: Recorded electricity breakdown Number of Maximum waiting Year Number of claims Average waiting time breakdowns time 2005 58 657 22 248 11 h 23 245 h 2004 28 824 15 583 10 h 55 249 h 2003 21 723 14 817 07 h 21 124 h 2002 22 011 15 523 08 h25 132 h Source: SENELEC
In some areas the underground networks were built by private or public institutions and it is frequent that poor choice of equipment and network architecture results in frauds and frequent power outages even when the networks have barely reached half of their life expectancy. This compels SENELEC to renew earlier than anticipated the equipments.
Middle voltage lines (6,6 et 30 kV): 6,6 kV voltage are still used in mid voltage networks of Dakar sub-stations and the transformers of regional power stations supply electricity over long distances which is another factor contributing to the increase in technical losses and ultimately in reducing SENELEC’s efficiency.
The long 30 kV lines which supply inland towns such as Diourbel and Mbacké are experiencing deterioration compounded by the delays in the maintenance work that need to be carried out on 225 kV line Tobène-Touba- Kaolack and the starting up of the transformers in these towns.
In Dakar region, the 30 KV loop and some sections of 30 kV line of inland regions are experiencing frequent breakdowns linked to the poor isolation (oil cables with migrant mass, choice of insulators) or the tube sizing (aluminum cable with 150 mm2 section instead of 240 mm2) given the evolution of the charges.
High voltage: In highly populated areas there was no work carried out in April 2008 regarding the 90 kV loop and the increase of the number of power unit sources. Such a situation has contributed in increasing breakdowns and deteriorating the SENELEC efficiency which was just 77 % in 2007. In fact, the overall system losses have reached a 23% peak whereas by international standards electric systems losses are between 15 to 16%.
As result, SENELEC lost 20 billion FCFA in 2007, and the government lost 4 billion FCFA10.
Financial constraints
As a result of the increase in oil price, SENELEC is confronted to a high energy bill and is not in a position to pay its fuel suppliers on time. To cope with this outstanding balance (sometimes up to 45 days late), the suppliers are applying ceilings for the owed balance and are demanding cash payments when the limit of that ceiling is reached.
These measures have led to a decrease in the level of customer service of SENELEC and frequent power outages due to the lack of fuel. This increases the cash flow problem faced by the company
In addition, the low capacity of the storage infrastructure for electricity, refinery and petroleum products is causing frequent power outages given the dependency on petroleum products.
10 Source: La SENELEC face au phénomène de fraude, CFPP – Journée du 8 Octobre 2007
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Financial constraints are also having an important impact on investment required for the modernization of the infrastructure and its extension. With a single source of funding, that is the government, the Senegalese model confirms once more the limit of public finances especially in highly indebted poor countries. Investments delays in the production infrastructure had a direct impact on the production deficit causing frequent power outages despite the efforts achieved over the last years. The investment needs as presented during the meeting of the Paris consultative group on the 3r and 4th October 2007 amount to 1587 billion francs CFA of which 845 billion is to be raised. The evolution of the Senegalese investment budget from 1999 to 2008, as explained below, and compared to the financial needs of the energy sector shows the necessity to resort to concessional funding from donors to develop the energy sector as well as to a public/private partnership to diversify the funding sources.
Table 10: Evolution of investment budget of Senegal (Millions Francs CFA) Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Overall Total 120 330 95 905 116 600 142 300 211 800 202 250 309 043 320 265 390 000 429 000 Source: Annual budget, Ministry of Economy and Finance
The Supply Demand Gap
Despite the constraints mentioned above, the demand has been continuously increasing as shown by the evolution of the peak power demand in the table below:
Table 11: Evolution of the peak power demand Year 1999 2000 2001 2002 2003 2004 2005 2006 Peak power 230 MW 246 MW 269 MW 283 MW 319 MW 343 MW 374 MW 387MW
SENELEC net electricity production has experienced an average rise of 2% per year between 2000 and 2005. This production experienced a reduction of 13% between 2001 and 2002 due to power stations unavailability which increased from 69 to 72%.
Figure 21: Evolution of net energy production
With an availability rate of 70% for power generators in 2006 against 73% in 2005, the load factor11 has recorded a 63,5% reduction in 2005 and 61,9% in 2006.
With a reference power for the inter-connected network of 450 MW in 2005, against 440 MW in 2006, and taking into account the peak power indicated above, the available supply will be just 400 MW if the power of one or 2 generators is taken out for compulsory maintenance. Out of this reduced power, one has to deduct the power
11 In the electricity industry, load factor is a measure of the output of a power plant compared to the maximum output it could produce. It is the ratio of average load to peak load in a given period.
41 related to the random non availability of old generators which leaves SENELEC with an actual supply of 350 MW in 2006 whereas the peak power in 2005 was already 374 MW and that of 2006 reached 387 MW.
The balance between supply and demand is therefore threatened due the obsolescence of the production facilities (power stations and related facilities) and investment delays in production facilities. Indeed, between 2000 and 2007, only three production units came on stream: • The interconnection, in July 2002 with Manantali hydro power station with 60 MW power set aside for Senegal; • The 60 MW expansion of CIV power station in August 2006. • The start up of Kounoune power station for 67, 5 MW in June 2007.
Additional grid extension work is ongoing and exacerbates the already significant shortage of supply capacity.
It has to be highlighted that the installation of 60 to 100 MW size units per year has not allowed SENELEC to meet the supply demand gap. For this reason, it is necessary to develop a 350 to 400 MW cumulated power in a single year to fill the gap.
Cote d’Ivoire approach to energy infrastructure development can be cited as a good practice. Indeed in the 1990s, the country has installed 400 MW power stations units in one step whereas Senegal took the option for lower capacity plants 60 MW and below. The timeframe between the call for tender and the contract signature is very long in Senegal for the IPP licensing process. The delays are discouraging the private international companies to enter the Senegalese market and explain why most calls for tenders have not been successful.
Such a situation contributes to increasing the supply demand gap. In addition, after the contract signature, it takes 11 months for the most efficient companies to install a diesel power station and 36 months to install a coal power station whereas during these periods, the demand has been increasing (6%/year on average). As shown from previous data, SENELEC is working without a security margin and does not comply with contingencies criteria applicable to the whole electrical network.
The only option for SENELEC was Manantali which power output is shared with Mauritania and Mali where electricity needs have also increased these last years. As a result, Senegal does not have anymore the possibility to exceed its allocated quota. With the cyclical droughts characterizing Saharan countries, Manantali production is experiencing significant reductions of power output which contribute to increase Senegal production deficit since October 1975.
To cope with this situation of chronic shortage, SENELEC has to cut power during the two peak periods from 11 am to 1 pm and 7pm to 11 pm. This situation is aggravated by the heat waves from April to October every year. Due to the lack of production there was a fourfold increase in power cuts e.g. from 21, 33 GWH in 2005 to 82, 76 GWH in 2006, of which 45, 77 GWH12.
In addition to power outages, SENELEC is asking companies with high electricity consumption to reduce the amount of power used during the evening peak which is called “disconnection in peak period” which has a real impact on the productivity of these large companies.
Overall, due to the power outages Senegal lost one percentage point of economic growth according to estimates by Senegalese economists. This situation is compounded by the impact of oil prices on the ratio “Variable Production Costs/turnover” and the ratio “fuel expenditure/turnover”. The table hereafter gives the evolution of the two ratios during the energy crisis. Production units were predominantly thermal based, consuming therefore petroleum products; this trend is not going to change in the midterm given the fact that hydropower accounts for only about 10 % of the total installed capacity.
12 SENELEC annual Report 2006
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Table 12: Evolution of charges expenses and fuels Year 2 004 2 005 2 006 2 007
RATIO 56% 74% 85% 81% Variable Production Costs / Turnover RATIO 37% 48% 58% 55% Fuel expenditures / Turnover
Source: SENELEC, 2008 Note 1:
Given the fact that SENELEC estimates that the annual growth of the peak is 7,8% and that periods of high demand correspond to periods of power outages, one has to wonder whether the company knows the real magnitude of the peak and consequently how high is the demand? Just before the unit source of Mbour went on stream, the demand of this zone was estimated at 20 MW. As soon as the unit came on stream, the demand reached 28 MW, this example seems to confirm the above statement.
On the basis of an empirical law, to avoid power outages the installed power of the production units of the electric system must be at least 2.5 times the peak power demand. As a result, we can deduct that SENELEC’s installed power demand should have been at least 968 MW for this same network given the fact that the peak of the interconnected network was 387 MW in 2006. In 2006 the installed power of the interconnected network being 632,9 MW, based on the empiric law, we can estimate the demand gap against the supply at approximately 340 MW.
Tariffs constraints
Senegal has a digressive tariffs13 system which is an incentive to electricity waste. Indeed the higher the subscriber’s consumption, the more affordable the rate. This does not promote energy saving habits. This tariff system is not adequate to a context characterized by chronic fuel shortage and a crisis of the electricity sub- sector in Senegal. To cope with this situation, public authorities decided to introduce from August 2008 onwards, a progressive tariff system based on the principle that the higher the consumption the higher the payment. SENELEC’s subscribers will feel the impact of the new tariff system in their October 2008 bills.
Furthermore, the single/uniform14 tariff option is also hindering access to electricity services in peri-urban and rural areas due to the fact that connection prices fixed by the government reflect the associated investment costs. As a result, both the public monopoly and private companies are not investing in these areas unless they are compelled to do so. Such a situation is the main cause for frauds, non authorized ‘illegal” connections in peri- urban areas as well as exclusion of large number of people to electricity access in rural areas15.
Table 13: Evolution of rural subscribers (%) Year 2000 2001 2992 2003 2004 2005 2006 Urban subscribers 280769 298393 319641 338724 376046 404447 428383 rural subscribers 48949 57293 66031 73353 81482 91082 102613 Total domestic subscribers 329718 355686 385672 412077 457528 495529 530996 Rural electrification level 9% 10% 11% 12% 13% 14% 16% Rural subscribers/total domestic subscribers (%) 14,85 16,11 17,12 17,80 17,81 18,38 19,32 Source direction de l’énergie: SIE, 2006
13 Tapering or decreasing system of rates 14 This tariff is the same across the country and does not make any distinction between urban and rural supply 15 Etude ENDA-GNESD: UPEAI ‘Accès à l’énergie en milieu péri urbain’, 2007
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The table hereafter gives a summary of the electricity sector with its constraints and their impact on energy security.
Type of constraints Characteristics Impact High reliance on thermal process for Increase of non supplied energy production: lack of diversification of High dependency on fossil fuels and production techniques vulnerability towards energy markets Old and inefficient installations: impacting Financial pressures and power Technical: Production and SENELEC’s overall energy efficiency outages. Distribution inefficiencies Reduced availability rate of power stations Reduced low factor Manantali Hydropower production limited given the quota allocated to Senegal Investment on production infrastructure More financial charges to hire power mainly from public budget. stations. Delays and lack of investment in the sector. Frequent cash flow difficulties due high fuel bills Required budget for the sector higher than Financial the total investment budget for the country. Lack of production from IPPs Expensive options to produce electricity: hiring power stations to cope with lack of supply. Frequent and lasting power outages Request for electricity intensive industries not to use electricity during the evening peak Supply-Demand Gap Reduced children success rate in schools Deterioration of patients stay and treatment in health facilities. Tariff system promotes energy waste Lack of energy savings habits by because based on the principle “the higher SENELEC’ subscribers the subscriber’s consumption, the quickest he Increased demand Tariffs comes out from the high tariffs segment” More power outages Single tariff fixed by the state which hinders Lack of intervention of the state and economic cost-effectiveness and investment. private sector for rural and peri-urban electrification
C- The Biomass sub-sector
The energy situation in Senegal highlights the importance of biomass in the overall energy balance and especially in the households energy mix.
The impact of drought and the scarcity of biomass resources led the state to set up a national program to promote LPG use.
This program has significantly contributed to the promotion of LPG in the Senegalese market but failed to completely replace biomass by LPG in the energy balance. In 2005, 2,8 million tons of biomass was used and consisted of about 1.1 million tons firewood and 315 000 tons of charcoal.
The security of the firewood energy supply which is still having an important contribution in the energy balance is threatened by a series of constraints:
The resource deficit: The high pressure on biomass resources compounded by desertification has generated a deficit in the availability of traditional energy sources particularly for households.
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According to Food and Agriculture Organization of the United Nations (FAO), the annual desertification rate is estimated to be around 45 000 hectares and is caused mainly by biomass utilization (direct consumption of firewood or transformation into charcoal), land clearance for agriculture, pastoralism and others. It is worth highlighting that biomass’ contribution to deforestation is estimated at 30 to 40 %.
The deficit has a different impact depending on the nature of the area: urban, peri-urban or rural. This is due to the distance between production centers and high consumption zones. It is also a function of the level of access to energy as well as the availability of equipments for biomass use (improved stoves, etc).
Furthermore, the biomass energy deficit is aggravated by the activities of lobbies benefiting from quotas for wood harvesting or charcoal making permits. This category is therefore reaping all the benefits of this very profitable activity and is opposed to the implementation of a ministerial law, aimed at banning illegal harvesting activities, which stipulates that resource exploitation is possible only in managed areas under the monitoring and control of the different actors.
In this context of sharp decrease in the resource availability, biomass energy prices and firewood consumption have been rising.
As far as the environment is concerned, this situation contributes to greenhouse gas emissions (GHG) raise due to firewood and charcoal transport to urban centers which are increasingly distant from the production sites. Furthermore it causes soil degradation and loss of income by farmers due to water shortages and wind erosion.
Financial constraints: Concerned by the acuity of this phenomenon, the state has set up an LPG program which has significantly contributed to reducing forest resources utilization and forced a transition to modern energy to meet household energy needs particularly for cooking.
However in the current context of energy crisis, the increasing financial burden supported by the state to promote LPG cannot be sustained and a further contribution to stabilize LPG prices in the domestic market is not feasible.
Financial constraints are also having an impact on households because substitution to LPG requires both a payment capacity for the adequate equipment and the supply which is becoming more and more expensive.
Technical constraints: The main technical constraint threatening traditional biomass supply lies in the inadequacy and inefficiencies in the processing of this product. This energy form is consumed in a rudimentary way with low energy efficiency cooking devices. Regarding production, the charcoal processing technique (carbonization) has a low yield and is threatening the resource supply. Indeed the overall efficiency of the Casamance kiln is estimated at 30% compared to18 % for traditional kilns. The introduction of the Casamance kiln which is more efficient is not yet widely disseminated.
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Type of constraints Characteristics Impact High pressure on the resources Charcoal prices increase Important biomass extraction for Revert to firewood and supply from more cooking distant sites Desertification Rise in greenhouse gas emissions due to resource deficit Increased distance between production firewood and charcoal transport to centers and consumption areas consumption centers. Concentration of consumption in peri- Soil impoverishment and therefore farmers urban (charcoal) and rural (wood) areas which contributes to water and wind erosion. Use of low energy efficiency cooking Increased biomass consumption stoves Increased budget by households allocated to Technical Difficulties to introduce improved stoves biomass purchase Use of traditional production techniques Increased pressure on forests More difficulties to resource access Government supports high bill to Increased Dependency on biomass subsidize LPG which is an energy Increase of biomass consumption and Financial substitute for biomass. increase in charcoal prices. Financial difficulties for household to face LPG equipment and supply costs.
4.1.3 Environmental and social impacts of energy scenarios
Biomass sub-sector:
Under the business as usual scenario (without LPG and the PROGEDE Programmers) there was a risk a risk that the pace of forest resources extraction to meet the energy needs further damage the environment. The charcoal production used to engender a gradual loss of forest resources of around 30 000 ha per year (World Bank, 2006).
The deforestation reduction, due to the LPG program, is estimated to 40 000 ha in 2000, 48 000 ha in 2003 and 53 500 ha in 2006. Biomass based energy (firewood and charcoal) mainly used for cooking purpose used to account for 53% of Senegal’s energy consumption (in beginning 90s), this proportion decreased to 45% in 2006.
The continuation of PROGERDE, an effective scenario, will maintain sustainable community-managed forest systems over an area of 378,161 ha; which will supply more than 370,596 tons per year of sustainable fuelwood, i.e. some 67,400 tons of charcoal per year (World Bank, 2006).
Electricity sub-sector:
Despite SENELEC’s efforts to increase efficiency of its electricity production process through the replacement of old power stations with lower energy efficiency diesel generators, future trends will be characterized by an increase in thermal power production from coal particularly (125 MW coal plant in 2011 and 125 MW in 2015). Such an option raises the issue of atmospheric pollution (acid rain) due to coal based electricity generation.
Hydrocarbon sub-sector:
In order to meet the current and future hydrocarbon needs, plans are to expand the oil refining capacities and strengthen the storage capacity for imported hydrocarbons. This trend is leading to an increase in hydrocarbons consumption with all the associated environmental consequences. Future forecasts show that CO2 emissions from fossil fuels will reach around 9200 Giga grams in 2020 (Ministry of the Environment, 2007). Furthermore under the scenario of peat exploitation in the Niayes16 area to meet the country energy needs, the ecological balance of this area might be adversely affected.
16 This Niayes consists of a string of permanent freshwater lakes and additional temporarily wet depressions lying along a line running north-east from the outskirts of Dakar to around 60 km south-west of St Louis
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4.2. Energy Security Measures and their impacts
Energy security has always been a top priority for the Senegal government. However there was a lack of actions and concrete measures towards securing a steady and sustainable supply of energy for the country. The dramatic increase in oil prices over a relatively short period of time has compelled the government to take emergency measures to attenuate or mitigate the impact of the energy crisis. Furthermore at a strategic level, the government has developed in 2008 a new energy policy which includes strategic guidelines for the sector.
Emergency measures There are several types of measures as described below:
Hydrocarbon sub-sector o Creation of a fund to secure petroleum products imports(FSIPP) In 2006 a presidential decree (decree number 953-2006) established the FSIPP fund and fixed the rules for its organization and functioning. This fund aims at ensuring a sustainable supply of petroleum products for the country. SAR has benefited from this fund with support margins allocated to white products (35 FCFA/liter) and (to black products (25 FCFA/Kg).
These margins have allowed SAR to:
- Refinance its debt over a two and half year period; - Resume its refining activities in October 2007 after a 6 months break.
Given the fact that prices are still increasing, the government has been negotiating with SAR creditors an extension of the reimbursement period to 4 to 5 years. The creation of a fund to secure petroleum products imports will have a positive impact for the country by mitigating fuel shortage risks and by eliminating the losses in productivity that are associated with such shortages. It will also help strengthen the refinery financial position and avoid production shut downs (like the one experienced in 2006) that increase the country’s foreign energy bill and affect the overall trade balance. o Change in the price structure These measures are aimed at securing the import business and avoiding the distortion caused by inadequate prices. It has been implemented thanks to a new decree 98-952, 26 September 2006, on the modalities of fixing prices of refined hydrocarbons. Indeed, the reference market has shifted from FOB Mediterranean to CIF North West with the relation Rotterdam-Dakar for the freight. The impact of this measure was to improve the margins for the refinery as well as for importers. This also helps the refinery improve its financial status and build up additional investment funds from the additional profit margins. o Preserving the refinery plant with the increase of the government stake in SAR capital One of the measures taken just after the 2006 crisis was to increase the state participation in the SAR capital from 10 to 65.4 %. The remaining share (34.6%) is owned by Total. This measure is expected to help reaching an output of 2 million tons/year at least and most importantly will allow the government to have the authority needed to implement institutional reforms in the refinery operation and management as well as initiate planned investments to modernize the refinery. These reforms will help secure a sustainable supply of petroleum product and generate added economic value for the country. o Support to the construction of independent storages facilities Securing the supply of petroleum products for the country is dependent upon the availability of sufficient storage capacity to accommodate operators stocks on the one hand and security stocks on the other. Energy security depends also on the guarantees to provide to the holders of imports and distribution licenses for free access to storage facilities; which should ensure a free and healthy competition. DIPROM Company has started the construction of a 129 000 m3 capacity storage facility. The Government through SENSTOCK Company, a PETROSEN’ subsidiary, is considering 51 % participation to the capital of the
47 storage facility. Moreover, the government is considering in the future 350 000 m3 of new storage capacity with a regional 17objective. As far as imported LPG concerned (around 90% of the country LPG supply), the government is considering the two following key measures for storage and reception improvement: - The construction, through SAR, of a 10 000 tons capacity. - Erection of a deeper Sea-line to accommodate LPG ships from 12 000 to 15 000 tons. - Open access to the private sector for the construction of an additional 12 000 tons capacity. - The establishment of a new mechanism to process the subsidy based on a cash advance for 5 billion CFA to further secure LPG supply
This measure will have the most significant impact as it will lead to a better management of the growing LPG demand and will encourage the transition of the population to LPG with all the associated environmental benefits in terms of forests and ecosystems preservation. The increase in storage size will secure the overall countries fossil fuel needs and will help the government to create a security stock for hydrocarbons that is up to international standards. The availability of the storage facilities to local energy suppliers will make the sector more productive and competitive. o Expanding and modernizing SAR refining plant An expansion and modernization program has been worked out based on: - Increase of refinery capacities from 1.2 million de tons to 3 million tons per year - Increase of reforming capacities from 14 to 20 tons/hour - A production at least 60 000 tons/year through the use of an adequate catalyst - The construction of gas oil “dyshydro-sulfurising” to process crude oils with higher sulfur content (less valuable and less expensive) to avoid being limited only to processing the Bonny crude which is more expensive on the international market. This should allow SAR to improve its margins and diversify the types of crude likely to be processed. - The sea-line extension and the oil docking station to accommodate 160 000 tons ships - Modernization of transport systems / pipe-lines to the storage facility for final products - Construction of a 50 000 m3 oil tank with a floating roof - Construction of a 30 000 m3/day of a fuel 380 tank.
It should be highlighted that all these measures will require a total investment of approximately 369 million Euro (242 milliards de Franc CFA).The modernization of the SAR refinery is a must and will help the company become a key-actor in the supply of petroleum products for the country and also for the region.
Other institutional measures considered in the hydrocarbons sub-sector o The reorganization of the legal and regulatory framework: Revision of the regulation modalities of the hydrocarbon sub-sector and ending of the government monopoly; o Strengthening of the mission of the Hydrocarbon National Council; o Institutionalization of a stabilization fund for petroleum product prices; o Establishment of a cooperation fund for the emergency supply of the country.
For the electricity sub-sector
Emergency measures o Hiring by SENELEC, since March 2005, of power stations for 48 MW additional capacity in 2005 which increased to 57,6 MW en 2006. The monthly cost of this additional power is about 500 million Francs CFA (approximately 1 million US dollar), excluding fuel charges also supported by SENELEC. o Allocation by the government of 10 billion de FCFA from the public Treasury as well as a 12 billion guarantee for the payment of fuel consumption, o Allocation to SENELEC of a 3 months revolving credit from the Islamic Development Bank (BID) for an amount of 17 billion FCFA to secure the petroleum products supply.
17 Region in this definition includes several countries
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Strategic measures o Choice of high energy efficiency power units: gradual replacement of old diesel based and less efficient generators (case of Kounoune, Kahone 2 and Tobene power plants) o Continuation of thermal based production units installation o implementation of a 175 billion investment program o Diversification of production sources by introducing 125 MW coal power stations, a capacity that can reach 250 MW o Introduction of electricity production from alternatives energies: typha18 and agro-residues based power stations (cotton residues, rice husks, peanuts, etc), solar and wind power stations. o Sub-regional interconnections through Senegal River Basin Development Organization (OMVS), Gambia River Basin Development Organization (OMVG) and the West African Power Pool (WAPP)
With respect to the demand management: the Government has decided to introduce from August 1, 2008 a progressive electricity retail tariffs under which consumers will pay more for the Kwh beyond a certain amounts of electricity consumption that is “the higher the subscriber’s consumption, the more expensive the tariff of the Kwh”
It is expected that all these measures will help SENELEC develop a more efficient electricity demand management plan. The additional involvement of IPPs will result in additional power generation capacity for the country and may lead to an increase in the level of electricity access for the country. The financial facilities obtained from the government and other development partners such as the Islamic bank should are expected to help SENELEC secure an appropriate supply in fuels for power generation. Positive impacts are also expected for the private sector and at household level with a decrease in power outages frequency. Energy efficiency measures will help households better manage their electricity consumption and will also impact the environment through avoided GHG emissions from fossil fuels.
For the biomass sub-sector Within a dual context dominated by biomass and LPG, strategic measures will be aimed at the supply and demand of these two products: o Continuation of PROGEDE Program The Sustainable and Participatory Energy Management project (PROGEDE) implemented by the government between 1997 and 2004 will be continued to pursue a sustainable production and supply of domestic fuels (Charcoal and fuelwood mainly). The charcoal production had resulted in gradual loss in forests cover of around 30 000 ha per year and the degradation of the ecosystem’s carbon sequestration capacity, soils, and biodiversity leading to rural areas impoverishment, the acceleration of rural exodus and a massive transfer of wealth from rural communities to few urban-based fuelwood and charcoal traders (The charcoal demand is concentrated in urban areas) (World Bank, 2006) PROGEDE focuses are on (i) supply side management activities through the implementation and monitoring of 300 000 hectares of environmentally sustainable community-managed forest resources systems in the Tambacounda and Kolda regions; (ii) the promotion of inter-fuel substitution and private sector and NGO-based improved stoves initiatives; and (iii) capacity development of institutions involved in the management, and the promotion of the participation of civil society in operational activities. The continuation of this program and other similar initiatives will help secure a sustainable supply of biomass energy while redistributing the income generated from forests to include poor and vulnerable populations. o The continuation of LPG program With the implementation in July, 2009 of a program aimed at reducing the cost of supply and consisting in applying true market prices and removing the existing subsidy, the households will benefit from a secured market and possible costs reductions as a result of the elimination of the speculations. There will be an increase in profits
18 Invasive aquatic plant that can be converted into energy.
49 margins for LPG companies thanks to the cost and scale savings on the freight. The LPG program has already led to a 1 % annual reduction of the biomass-based energy consumption19.
4.2.1. Energy efficiency
A. Energy efficiency potential
Potential in the electricity sub-sector
There are several possible energy efficiency niches in this sector. Energy savings can be achieved in the production, transmission, distribution as well as consumption of energy. The diminution of the load factor from 63,5% in 2005 to 61,9%, according to the 2006 SENELEC annual report as well as record losses in the network (August 2007) are incentives to savings and energy efficiency in Senegal.
A substantial production gain lies in the renewal and replacement of old and non efficient power stations with high energy efficiency equipments.
The West African Power Pool20 (WAPP) is an important niche for production efficiency (clean energy at less cost) given the huge hydro potential of the region, particularly in Guinea. There are possibilities of productivity gains by developing combined cycle and gas turbines.
Another significant potential for energy efficiency gains lies in electricity distribution. The losses recorded in this area reached 23% en 2007, contributing thus to reducing SENELEC’s overall efficiency which has not exceeded 77 % this same year. The international standard for electric systems losses is between 15 to 16 %. According to a World Bank study, “it is established that it is three times less expensive to save a kWh of electricity by improving the network efficiency instead of investing in new production facilities to generate the same kWh”.
As far as demand is concerned, the potential is non negligible. SENELEC is carrying out a 3 months energy efficiency pilot test with 684 customers which should allow the company to gather information for a future large scale program.
Note 2:
In order to estimate the decisive impact of this approach in Senegal, if we target the SENELEC 530 996 household subscribers in 2006 and equip them with two 12 Watts bulbs units to replace two 60 Watts bulbs units and one 15 W bulb unit to replace a 75 Watts bulb, the avoided installed capacity will be as high as 82.84 MW. This is more than the capacity of Kounoune 1 and a cost of 7,9 billion Francs CFA at June 2008 market price. As a result, the avoided annual consumption is estimated at 13,8 billion Francs CFA based on an average price of 91,1 Francs CFA per kWh according to 2006 SENELEC annual report.
Biomass and LPG sub-sector
Given the low efficiency of the wood transformation process into charcoal (carbonization) there is a significant potential in producing biomass fuel in a more efficient way. With the introduction of the Casamance kiln the yield could reach 30 % instead of 18 % with traditional klins.
19 SIE-Senegal, 2006 20 The WAPP Organization has been created to integrate the national power system operations into a unified regional electricity market - with the expectation that such mechanism would, over the medium to long-term, assure the citizens of ECOWAS Member States a stable and reliable electricity supply at affordable costs.
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The potential is also important for the demand through the improvement of cooking equipments and methods. The adoption of improved biomass stoves should allow a 40 % gain in efficiency against 20 % (LPDSE, 2008) with traditional stoves. It is also important to strengthen the access to LPG which is a more efficient cooking energy compared to other energy forms used for cooking.
B. Key barriers to improving energy efficiency
Despite many statements by public authorities and initiatives to develop energy efficiency, the process has not yet reached a significant scale due to a series of barriers. The main barrier to improving energy efficiency in Senegal is linked to the financial capacity of household and private sector. Because of the lack of financial means, Senegal is using, less efficient equipment particularly in the household, transportation and the administration sectors. Most of such equipment, which can be obsolete, second-handed or of inefficient technology is less efficient than the latest models being used in the developed countries. The financial problems are compounded by the lack of local awareness and interest. As of now there is no large scale communication and outreach program to sensitize the population about energy efficiency. Another barrier stems from the lack of appropriate legal and regulatory framework aimed at the private sector and consumers, for instance fiscal and customs duties reduction as well as other tax exemptions for private investors.
C. Measure to improve energy efficiency in order to strengthen energy security
Since the beginning of the 80s, a series of regulations, detailed below, had been taken to improve Senegal’s energy efficiency:
o Setting up an energy saving unit/office at the beginning of the 80s. This unit, under the authority of the ministry of energy, has carried out an awareness campaign aimed at the large public on the advantages and conditions of energy savings as well as energy audits, energy savings assessment studies for administrative buildings, industries, transport and households. o Compulsory utilization of the Casamance kiln since January 2004 o LPG program aimed at the introduction on a large scale of LPG supported by subsidies and tax exemptions. o Setting up in 2006 of a national committee to monitor public expenditures for electricity consumption. Under the authority of the Ministry of Economy and Finance and that of the Energy and Mines, this committee has been in charge of monitoring, analyzing and controlling the implementation of the measures recommended by the Committee and approved by the authorities in relationships with ‘energy savings staff’ in different ministers.
o Since 1981, completion of a study on the evaluation of the energy saving potential in the industry sector, encompassing 14 high energy consumption companies including the utility SENELEC. o Launching of an evaluation study on energy saving potential in the transport sector.
Other measures that are being considered in the framework of the “Sustainable Cities Initiative” (Initiative des Villes Durables-IVD Dakar) in collaboration with Industry Canada comprise:
• A reduction of the electricity consumption for air conditioning in the biggest buildings of Dakar where energy audits have been already carried out. Some energy efficiency options are being considered (efficient compressors, optimized regulation systems, etc)
• The replacement of the present collective/streets lighting system by more efficient lighting device. The dissemination of low-energy bulbs in all collective infrastructures (warehouses, street lighting, offices, markets, etc)
• A study is being considered to assess the potential efficiency benefit for large industrial facilities in the city. This will be followed by identification of funds sources among multi lateral donors to invest in the identified energy efficiency niches.
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4.2.2. Renewable Energy
A. Renewable Energy Potential
Solar potential: annual sunshine of more than 3000 hours and average irradiation of 5.4 kWh/m²/day promises significant opportunities for generating thermal and photovoltaic power in the country.
Wind potential: Senegal’s coastline stretches over almost 700 km and has a wind pattern conducive to electricity generation. A study carried out on a 200 km-long and 20 km-wide of coastline between Dakar and St. Louis found average wind speed to be 5 to 5.9 m/s at height of 50 meters21. In other zones, wind could be harnessed to fuel water pumping.
Hydropower potential: Senegal is not especially well endowed in hydro resources that could be used to build micro-hydro power stations. There are, however, high hopes of harnessing up to 1000 MW within the Organisation de la Mise en Valeur du fleuve Sénégal (OMVS) and the Organisation pour la Mise en Valeur du fleuve Gambie (OMVG). So far only 200 MW have been exploited through the Manantali hydroelectric power station in Mali, which provides electricity to Mali, Senegal and Mauritania.
Biomass: There are significant biomass resources but they are so far only really utilized using traditional methods both for production and end use. These resources are: Wood culled from natural woodland: people use this wood for heating and making charcoal. Senegal has 6,205 thousand hectares of forestry resources, of which 5,942 thousand hectares are natural forests and 263 hectares are plantations22.
Agricultural residues such as groundnut shells, palm kernel shells, bagasse, rice stalks, cotton stems, filao spindles are all resources that could be harnessed to generate energy. Typha Australis in the Senegal River has very recently boosted biomass resources, boasting potential of some 3 million tons of fresh material, or 500,000 tons of dry material. This is equivalent to 150,000 tons of biomass charcoal23
Table 14: quantities of agricultural residue (1998) Type de production Production (in tons) Agricultural residue (MS tons) Groundnut 544,800 871,680 Sorghum 118,300 343,070 Maize 60,300 126,630 Millet 426,500 1,322,150 Water melons 261,300 182,910 Rice 173,700 312,660 fManioc 46,600 88,540 Cotton 40,000 4,400 Source: Ministry of Agriculture; 1998
To this we may add:
Charcoal dust appraised at 15 tons per day, or 4,380 tons per annum in the Dakar region alone24;
21 Atlas éolien de la grande côte du Sénégal, Valérie Blecua; January 2002 22 - Adaptation to the harmful effects of climate change: the case of sub-Saharan African countries: the impact of climate change on access to energy in rural areas and adaptation in WAEMU countries; Enda, CGSUV; March 2004 23 - Valorization of Typha as a domestic fuel in West Africa; PREDAS, PSACD; May 2001. 24 - Findings of survey on coal dust and wood in Dakar; Libasse Ba, Sécou Sarr, Enda 2001.
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Domestic waste evaluated in 1999 in the Dakar area at 4 million tons.This is in addition to the existing stock of organic material at the Mbeubeuss dump, which has accumulated some 6.3 million tons of waste over the last 25 years25.
B. Main barriers to promote renewable energy
In spite of the proven nature of some of the renewable technologies, many obstacles still impede the use of RETs. We can classify these obstacles into two categories: 1) market constraints, and 2) political, institutional and regulatory constraints26.
B-1- Market constraints Renewable energy technologies have made significant advances in terms of technology and organisation in recent years, but a genuine market for them does not yet really exist because of :
Lack of competitiveness of renewable energy compared to conventional types: the initial investment cost is US$ 8500 for a wind systems, which far exceeds most peoples’ means.
Lack of funding mechanisms (RETs promotion funds, credit lines, etc.) and measures for encouraging use of RETs. Low demand this has prevented the emergence of a well-structured national supply capable of fostering the development of the sector. In many cases, operators who get involved in the sector have become disillusioned and abandoned their activities because of the lack of a sufficient market.
Isolation of actors this hinders the development of a mutually-beneficial relationship, and prevents synergies between the strengths of various actors. A prime example is the gap between research and development bodies and private operators. The net result is that research findings are often of little relevance to the needs and demands of the market. This is one of the reasons why there is no RETs production infrastructure.
The lack of an appropriate funding mechanism
B-2- Political, institutional and regulatory constraints
- It has to be acknowledged that African countries have designed their energy policies on the basis of supplying modern energy services and have restricted their renewable energy initiatives to disparate isolated or scattered projects. It would be much more fruitful to apply well thought-out policies rather than a series of projects.
- There is a lack of cohesion of intervention methods in the renewable energy field. By always undertaking actions in isolation, the various national and regional institutions, projects and programs stifle opportunities for synergies.
- Little attention has been paid to RETs by national energy policies;
- Lack of fiscal measures likely to stimulate local production;
- Lack of consultation between actors.
C. Measures to promote Renewable Energy Resources/Technologies to enhance energy security
A series of regulations were worked out to better promote renewable energy development, namely:
25 Feasibility study on an integrated waste treatment and valorization in Dakar: Impact on greenhouse gas emissions; Enda; February 1999. 26 The technological stakes of renewable energy in the fight against desertification; Youba Sokona, Sécou Sarr, Jean Philippe Thomas; Enda, April 2004 ; 20 P.
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• “Prime Minister Department” policy paper N° 1022 of the 21/12/1978 instructing the stakeholders to opt for the solar alternative in the public tenders;
• Law N°8182 of the 25/06/1981, which granted tax incentives for renewable energies investments, mainly in solar energy;
• The 1993 Decision N°0706/DGD/DERD/BE1, which granted exemptions on income tax and VAT.? Afterwards, this decision was removed in 2000, with the coming into effect of the Community External Tariff (CTE), of the UEMOA;
• Afterwards, the law N° 8182 of the 25/06/1981 was modified to be replaced by the law N° 2004 of the 12/02/04, which applies tax incentives to solar and wind energy while granting, a reduction equal to 30% on the amount of the tax profit to any company investing in solar and wind energy equipment.
More measures were undertaken to encourage Renewable Energy use:
• ASER’s neutral technology policy to electricity access in rural electrification concessions is an important measure for better prospects for solar PV development in Senegal. In 2000 865 kWp were already installed in Senegal, between 2000 and 2007, only an additional 1115 kWp was installed by ASER.
• At the end of the 70’s, solar thermal for water heating was particularly targeted by the Senegalese state. The measures were particularly aimed at creating a solar water heater (SWH) market through the creation of SINAES (company for the assembly and commercialization of SWH for domestic, hotels and health centers). The state’s contribution through SENELEC to SINAES’ capital reached 50 %. To promote the demand, the Government compelled public estate companies (SNHLM and SICAP) to install SWH in all new constructions. This measure was accompanied with a financial mechanism to facilitate SWH acquisition by the incorporation of the SWH price into the house purchase price. These incentives should have allowed the emergence of a signification SWH national market.
Solar thermal for electricity generation despite the higher power delivered did not emergence since the failure of the first project in the Diakhao site in the Fatick region. This failure is due to the fact that public monopoly Electricity Company in charge of the exploitation did not have a great deal of interest in developing renewable energy. Nowadays, there is the same lack of interest by this company which runs the solar stations in Niodior-Dionewar, Bettenty and other Saloum islands.
• The national biofuels program launched by the Senegalese state is mainly aimed at biodiesel production from jatropha oil. The target is 321 000 ha plantation in the country with an average of 1 000 Ha per rural community and the production of 1 134 million liters of refined biodiesel from 2012 onwards.
• These last years the Senegalese government has shown a real interest for the promotion of biogas, whose production from the fermentation of organic waste, is a source of energy but also contributes to cleanse the environment and to obtain a good quality manure. The biogas popularization and development will necessarily imply the dissemination of family latrines combined with biogas production in peri-urban and rural areas. Suitable financials mechanisms are also a key component to reach this objective.
D. Impacts of the measures/policies on the energy mix, on the energy cost and the environment at the national level
Even though the share of renewable energy in the overall energy balance is not significant, the introduction of these energies to increase energy access and improve energy efficiency has generated non negligible impact, particularly at the local level.
A key impact of solar PV development in Senegal is rural electrification improvement. According to the energy department, the contribution of renewable energy to rural electrification is estimated at 2.7%.
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If solar PV has generated a significant impact at the national level with respect to electricity access, solar thermal has neither reached its objectives nor generated the expected impact to sustainably reduce electricity usage for water heating. After the installation of 140000 liters of SWH between 1985 and 1989, the project has been slowing down due to the lack of structure and adequate mechanisms to manage and maintain the installations. There was also a lack of large scale communication campaign which prevented the emergence of a national market.
As far as biofuels development is concerned, it is too early to assess the impact of the jatropha national program which expected objective is to secure an independent supply of diesel at the country level.
Regarding biogas, there was no major impact as a result of its introduction given the limited initiatives in this area.
4.2.3. Other measures
A. Measures
Energy sources/energy types diversification The most important diversification measure is the increased contribution of hydropower within the Manantali project regional cooperation. A huge potential can be tapped in connection with Guinea in the West African Power Pool framework. The intensification of oil exploration is another diversification route for Senegal as stated in the policy paper for the energy sector.
Diversification of energy suppliers This measure is based on speeding up the reforms27 implementation by the involvement of new actors, increased contribution of the private sector in electricity generation and sales through the public/private partnership28.This initiative have resulted in the positioning of new actors especially in the electricity sub sector (IPPs). In the petroleum product distribution many local private companies have been created (Touba Oil, Elton, etc). As for oil import supply, it is done through a call for tender by the government with the participation of Major multinational companies. In periods of financial problem the government uses diplomacy to get oil by negotiating with close foreign countries like Iran and Nigeria. However, it is the refining utility, limited in terms of processing crude oil types, that mainly dictates the kind of oil to be imported and thus the oil suppliers.
B. Impacts of the measures/policies on the energy mix, on the energy cost and the environment at the national level
The most significant impact is the hydropower contribution to the country energy mix. About 10 % is supplied by Manantali dam.
The introduction of electricity generation by private companies as a measure to diversify energy suppliers is still limited in the number of actors; however it has substantially contributed to improving the energy mix. Currently 8.22 % and 9.10 % are supplied by GTI and AGGREKO e.g. 17.32 % of the 2006 total production is secured from independent production and hiring power stations (SENELEC Annual Report l, 2006)
27 Privatization of power generation 28 Public/Private partnership in rural electrification programs
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Chapter 5- Threats to energy security, energy security measures and their impacts at household level
5.1. Threats to Energy Security
Before carrying out the identification and the analysis of the various threats to household energy security in Senegal, we will examine in this section households expenses and look into those allocated to the energy needs.
A short outline of the households’ categories with respect to energy access will be given to give an idea of the unequal distribution of energy infrastructure.
A- Households Energy expenditure
Households spending for housing, water, electricity, gas and other fuels account for 17.9% of the households’ consumption budget, after food expenditures that represent 52.9%. Energy and housing are the second priority of households’ after food. Clothing, transports and furniture account for 6.2%, 5.8% and 5.2%, respectively.
The household budget for rent fees, maintenance and repair expenses, energy and other households’ services is evaluated at 359 billion FCFA with 259 billion for the urban area and 100 billion FCFA for the rural area. Rent fees are the most important expenditure item with a proportion of 74.9% of 359 billion FCFA, followed by energy with 17.1%. The remaining housing services account for nearly 7.9%.
There was little change between the 2001-2002 situation (ESAM II) and that of 1994-1995 (ESAM I). Indeed, in 1994-1995, Senegalese households have affected 76,5% of their housing and energy expenditure to rental fee payment, 17% to electricity and others domestic fuels purchase, and 6,4% to other housing services. The data presented above and the following table is extracted from the summary report of the second Senegalese Households Survey (ESAM-II).
Table 15: Distribution of the expenditure of housing, water, electricity, gas and other fuels by sub group according to the type of residence Urban Dakar Other towns Urban area Rural area Total Sub group Amount % Amount % Amount % Amount % Amount % Rent fee payment 116 870 70,2 69 783 74,7 186 652 71,8 82 920 83 269 573 74,9 Maintenance and repair 653 0,4 665 0,7 1 317 0,5 2 457 2,5 3 774 1,0 Other housing services 13 762 8,3 6 498 7 20 260 7,8 4 671 4,7 24 931 6,9 Electricity, gas and other fuels 35 249 21,2 16 486 17,6 51 735 19,9 9 903 9,9 61 637 17,1 Total 166 534 100 93 431 100 259 965 100 99 950 100 359 916 100,0 Source: ESAM-II, July 2004
If electricity, gas and other fuels expenditure account for 21,2% of the housing expenditure in the urban area of Dakar, it goes down to 17,6% in the other cities to reach only 9,9% in rural area. Overall, the national average energy expenditure is 17,1 % of the housing expenses. These ratios reveal also the disparities between rural and urban households’ and confirm the gap still existing between Dakar and inland cities.
Household Categories
As far as energy access is concerned, one can distinguish in the Senegalese context two types of households:
• Households connected to the energy supply circuits: with access to the electricity network and fuels distribution systems, in particular LPG and charcoal. In this category, there are urban households and a majority of peri-urban households and a tiny minority of rural households.
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• Not connected households: Without access to the electricity network, or to the distribution outlets of LPG or charcoal. In this category, there is a large proportion of rural households and a smaller number of peri-urban households.
The supply constraints of the first category are mainly dependent on the conditions of the energy country supply. In the event of energy crises, the impact is higher on these households such as supply breakdown, distribution shortages, rise of prices and speculations.
The second category is deprived of energy services due to the lack of infrastructures and distribution networks of the various energy forms. The country energy crises contribute to the delays for their connections and consequently, their access to energy services is postponed.
B- Main threats to Energy Security at the household level
Legal and tariff aspects
The household’s energy security is threatened by several factors of which:
The suppression of the LPG subsidy, thought it is expected to attenuate the speculations on this fuel prices, will lead to a brutal increase in the prices of this fuel and likely disturb the supply to poor households. The latter will have, either to adjust their energy budget, at the cost of other welfare expenditures, or give up on this product or reduce their consumption by shifting to less expensive options.
The absence of mechanisms facilitating access to this product through pre-financing schemes to purchase LPG equipment will divert the interest of poor households in LPG and will reverse the well sustained rate of LPG development in Senegal. With respect to consumption, households have the means to afford it, in one way or another. There is a good practice in water access using social connections initiated by the Company of Water supply (SDE) in the peri- urban zones of Dakar, and the pre-financing of in-house installations already practiced in the energy services companies (SSD) in Mali with the support of the a EDF project. The Senegalese Agency for Rural Electrification has started a similar experience in 2008, with the support of the World Bank.
The Price liberalization policy is not completed by an effective and targeted control of fuels prices. It has led to very high prices of the energy products mostly used by poor households: kerosene, charcoal, candles etc. This accentuates further the energy vulnerability, particularly of poor households. As example, the charcoal price went from 40 FCFA, in 2000, to 200 FCFA in 2008.
The adoption of a new system based on progressive tariffs for electricity consumption could result in a rise of poor households’ bills, if it is not applied along with a systematic replacement of incandescent bulbs with energy saving equipment. Despite the declarations of good intention of the public authorities, consumers' associations and trade unions are suspecting that through these new tariffs, the government aim is to transfer SENELEC’ structural gap to households and industrial enterprises.
The high cost of high energy efficiency equipment combined with low financial capacities of poor households, constrained the latter to resort to cheap and low efficiency equipment which may in addition harm their health. Polluting and less efficient biomass stoves are used instead of improved stoves and LPG. For lighting, hurricane lamp is generally used in urban areas, candles in peri-urban areas instead of electricity and gas.
In this context, and with the current energy crisis and the situation of high dependence on oil products and biomass, household energy expenses, which are significant as they already account for 17 % of housing expenses, have been increasing.
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The attempt to reduce the energy burden supported by the government in order to secure the national supply, affects paradoxically, the livelihood of poor households which will have to cut on social expenditures such as food, education, health and thus increasing their vulnerability to the energy crisis.
National energy supply
Household’s energy security is threatened by the lack of a sustainable energy supply at the national level. As a result, there are frequent power outages due to old and inefficient production plants as well as frequent fuel shortages due to the limits reached usually on financial out standings imposed by SENELEC suppliers (Cf chapter 4).
On the distribution side, households’ electricity connection is delayed because of the reduced capacity of the low voltage distribution network concentrated mainly in the Western area of the country. This is worsened by the reluctance of the public operator to explore low cost technical alternatives such as decentralized options and experiments single-phase distribution systems.
For biomass cooking fuel, the permits holders are imposing high profit due to the continuation of the charcoal quota system, and increase the selling prices in a liberalized context. This quota policy leads to the exclusion of grassroots communities, village and inter-village groupings as well as the rural Councils from the profits generated by the resource exploitation. The latter are not involved neither in the exploitation, nor in sharing the revenues generated by the resource.
This situation persists because of the slowness in the application of the ministerial decree number 18-01-2008 000.431 which prohibits charcoal production outside managed forests and which guarantees the sustainable exploitation of forest resources. The increased distance between production sites of biomass fuels (wood and charcoal) and consumption centers increases the costs of transport and ultimately prices to the households.
The lack of diversification in cooking fuel supply exposes households to frequent price increases due to the volatility of petroleum product prices and the increases in biomass fuel prices (wood and charcoal).
So far, the very limited involvement of the private sector in the electricity production and distribution/sale as well as the delays in SENELEC privatization, continue to impede the development of electricity access and make impossible the reductions in electricity costs that should have resulted from a competitive market.
The institutional aspect
The institutional framework which is not conducive to the full implication of the private sector, and that limits the number of actors in the field of transport and distribution is among the threats to households’ access to petroleum products.
Other threats to household access to modern fuels are due to the lack of storage and refinery capacities leading to shortages in households supply.
Population expansion and urbanization increase
As a result of the increase in the urbanization rate, there is an increase in the demand for domestic fuels to an extent that the investment capacities of the energy services companies are unable to fill in the gap. This explains the prevalence of illegal connections in per-urban areas which leads to a higher illegal selling prices resulting from households transactions. Between 2002 and 2006, the LPG subsidy amounted for almost 100 billion Francs CFA. This would grow significantly in case the subsidy is maintained and due to the population expansion. The government is therefore under pressure from its development partners involved in the Heavily Indebted Poor Countries (HIPC) initiative to eliminate the subsidy for the 2, 7 kg and 6 kg LPG bottles.
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There is a question on household’s energy security in a context in which energy access remains weak and basic social services are still unmet.
C- Vulnerability of the poor to high energy prices and energy insecurity supply
The high price of energy contributes to reducing the household’s purchasing power and limits the expenditures formerly allocated to health, education and food. It also leads to a generalized price rise, thus increasing further poverty level of the most deprived households. Poor people are constrained to day to day supply and, they become the most vulnerable group to the recurring shortages of LPG and other fuels.
D- Environmental and social impacts of the current and future energy scenarios
The business as usual scenario based on the continuation of quotas policy for domestic biomass exploitation would not be sustainable. It will increase desertification and increase the distance between production sites and consumption centers because it does not compel exploiters to comply with forests management practices. This scenario will necessarily lead to a price rise of the cooking biomass because of the multiplicity of intermediary retailers and their margins as well as an increase in the costs of transport.
Recent estimates indicate that 77.667 ha of forests have already disappeared due to a massive and irrational harvesting of forest resources, mainly to meet households energy needs (Direction de l’Energie, 2006).
The section 4.1.3 related to the Environmental and social impacts of energy scenarios, presents the impacts linked particularly to the households energy scenarios.
In addition, with the increase in the electrification rate, households will increasingly contribute more to CO2 emissions.
E- Linkages between energy security, access to energy and poverty reduction
Energy security allows a continuous and adequate supply of all energy forms for the sustainable development of any economic activity. It contributes to the development of the labor force and contributes to increasing productivity. It reduces the losses by a better conservation of the agriculture productions and thus increases the population’s revenues. It ensures the continuity and the improvement of energy services making it possible to ensure better life conditions for the populations; it is also an incentive to increase private direct investments which are sources of jobs creation and wealth.
For households a secure supply of electricity will mean less insecurity (safer neighborhoods) less equipment damage and better conservation of perishables (from frequent outages) and more leisure time at home. Energy security will also come with reduction of households’ electric bills through the introduction of low energy options and the encouragement of energy saving behaviors. The increase in LPG storage capacity will eliminate the speculations on prices and make LPG affordable for most households. For poor households the availability of electricity means more opportunity for productive applications (food conservation business, cold beverages and ice selling etc) that can generate additional income. In the rural areas energy security will mean the introduction of renewable energy types (solar PV, windmills, etc.) and the availability of LPG at affordable prices. The introduction of RE technologies is a potential job creating area especially for rural women who require energy for food transformation activities (fish smoking, cereal grinding, etc.).The use of solar power plants or individual systems will contribute to the electrification of rural areas and will impact directly the quality of education (increased study time for children), the quality of healthcare (solar heaters for health centers is a good example). The availability of LPG in addition to the environmental benefits will decrease the work load of rural women who have to walk huge distances to gather wood for cooking.
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5-2- Measures and their impact on energy security enhancement
The key measures which will be looked into in this section are related to energy efficiency and renewable energies. Other measures such as diversification, awareness activities and information will also be addressed.
5.2.1. Enhancing Energy Efficiency
A- Potential for energy saving in the household sector
In the household sector, there are several energy saving niches.
With respect to lighting: The massive dissemination of low consumption bulbs makes it possible to reduce up to 80% electricity consumption of households which use electrical energy only for lighting.
For cooking: improved stoves in substitution to traditional stoves which efficiency is limited to 0,2 % allow a substantial energy savings. Forests management and support to biomass energy production in order to avoid non rational extraction of resources allow energy savings through losses reduction at supply side.
In addition, LPG usage compared to wood or charcoal, also allows local energy resources savings, through the reduction of deforestation. Since its introduction, LPG has reduced the annual deforestation rate by 1%.
For water heating and refrigeration: domestic water heating and refrigeration are important niches for energy saving and electricity consumption reduction especially during peak hours.
Other niches might be considered for energy efficiency through the transition to existing household appliances requiring a lower power.
The table hereafter indicates the power of electric household appliances mostly used in Senegal.
Table 16: Powers of electric appliances used by households Electric water heater Iron Air Conditioner Freezer Refrigerator Color TV Ventilator 1000-1600 W 1200-1700 W 1000-2000 W 225 W 160 W 120 W 75 W
Source SENELEC, 2006
Behaviors: Households behavioral change with respect to energy has an important energy saving potential in the residential sector. The common behavior, ignoring energy efficiency, shows the lack of awareness and education regarding the energy and the environment issues. The absence of good energy management attitude is encouraged by the current digressive electricity tariffs system and the weight of local traditions.
Transport: The transport sector in Senegal is among the high energy consumption sectors (57% of the conventional energy consumed in 2005) because of the obsolete nature of vehicles (cars, trucks, etc.) in use. Indeed, the average age of the majority of the transport vehicles exceeds 10 years. The table below gives the distribution of the motorized vehicles by age.
Table 17: Distribution of motorized vehicles by age Age <5ans >5 et <10 >10 et <15 >15 et <20 >20 Senegal 8.9% 8.1% 22.4% 30.4% 30.3% Dakar 10.5% 9.4% 23.2% 29.0% 27.9% Rest of the country 2.8% 4.8% 22.3% 32.6% 37.4% Source: Enda Energy, Concept Note, Side Event Transport and Climate, Climate Week, Dakar, 2007
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Awareness buildings, modernization, reduction of the age of imported vehicles are potential energy saving niches. This measure requires capital costs, but reduces daily households expenditures allocated to fuels purchase and to healthcare due to the reduction of air pollution. It is worth highlighting that the energy sector is the first source of air pollution, contributing for 41% of the GHG emissions. In this sector, the sub- sectors of Industry and transport account for 32% and 44% of the emissions respectively. The households and others account for only contribute for 24%29.
Housing The Senegalese rural distribution of population, contributes to huge energy losses. Indeed, in Senegal, 75% of the rural centers have a population below 500 inhabitants. Such a space occupation can benefit from significant energy savings through the adoption of decentralized options for electricity and gas supply. Indeed, these options help in avoiding energy management costs.
The table, hereafter, gives a comparison of the costs per kWh, according to the type of supply. The two cases are a diesel production with a low voltage grid and an electricity supply through a 30 kV middle voltage with a low voltage network, according to the length of the MT line for the same size of the low voltage grid. These costs30, explain the lack of will of the electricity operators to supply poor households, due to the fact that the single tariffs they have to comply with do not reflect the true costs.
Table 18: KWh cost according to the option of electrification Subscribers/ 5 10 15 20 25 30 42 70 105 140 210 308 village Decentralized 6286 3459 2517 2045 1763 1574 1305 1092 994 998 945 908 diesel production (FCFA/ kWh) (CFA Jan. 2001) Middle voltage grid/and distance (in km) 0 3387 2027 1574 1347 1211 1120 991 861 796 764 736 714 1 8396 4531 3243 2599 2213 1955 1587 1219 1035 943 855 795 2 13403 7036 4913 3851 3215 2790 2183 1577 1273 1122 975 877 3 18414 9541 6583 5104 4216 3625 2780 1935 1512 1301 1094 958 4 23424 12045 8252 6356 5218 4460 3376 2292 1751 1480 1213 1039 5 28433 14550 9922 7608 6220 5295 3972 2650 1989 1658 1332 1121
6 33442 17054 11592 8861 7222 6129 4569 3008 2228 1837 1452 1202
7 38451 19559 13262 10113 8224 6964 5165 3366 2466 2016 1571 1283 8 43460 22064 14931 11365 9226 7799 5761 3724 2705 2195 1690 1365 9 48469 24568 16601 12618 10227 8634 6358 4081 2943 2374 1809 1446 10 53479 27073 18271 13870 11229 9469 6954 4439 3182 2553 1929 1527 15 78525 39596 26619 20131 16238 13643 9936 6228 4374 3447 2525 1934 20 103570 52119 34968 26393 21248 17817 12917 8017 5567 4342 3121 2340 25 128515 64642 43317 32654 26257 21992 15899 9806 6760 5236 3718 2747 Source: ASER and JICA, 2001
29 Deuxième Communication Nationale du Sénégal: Inventaire des gaz à effet de Serre (données de 1995) 30 Coûts établis aux conditions de Janvier 2001.
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B- Cost of energy saving in the households sector
Costs for households:
For the poor households which only use firewood for cooking and electricity for lighting, the cost of energy saving results in the reduction of their expenditure for these two items. For cooking: the acquisition of an improved stove will cost 3500 to 4500 FCFA for the households which use firewood, and between 2000 and 10.000 FCFA for the households using charcoal. This equipment will generate an energy saving estimated at 40 to 45% by household according to the fuel and the equipment used. For lighting with electricity: such categories of households do not have any other domestic appliance and are categorized by the electricity company as “lighting” subscribers”.
When a household of this category carries out an energy saving operation for 5 bulbs: three of 60 W to be replaced by three of 12 W and two 40 W bulbs to be replaced by two of 8 W, the cost of this operation and the profits are as follows:
The acquisition of five low-energy bulbs at a cost of 4000 FCFA each amounts to 20,000 FCFA, and the energy saving would be around 84% of the regular electricity bill. This allows a very short payback period.
With three bulbs of 60 W to be replaced by three bulbs of 12 W, a refrigerator of 100 W and a fan of 100 W to be maintained for 100 W, the energy saving would be around 38% of the energy bill whereas the cumulated cost of the acquisition of the low-energy bulbs is 12.000 FCFA, for a 5 year lifespan.
Note 3
The market price of 40 to 60W incandescent bulbs is 300 to 400 FCFA per unit.
The market price of 8 to 12 W low-energy bulbs delivering the same power as the bulbs cited above is 4000 FCFA per unit, those with a lower quality cost 1500 FCFA per unit.
C- Energy efficiency measures and their impacts
o The PROGEDE program and its impact
As mentioned earlier in this report the PROGED Program is being implemented through two components: i) the fuelwood supply management and the demand and inter-fuels substitution component.
Significant positive impacts have been achieved for both components.
At the supply management side: The program benefited some 250 000 people (around 21% of the population in the Tambacounda and Kolda regions) and an estimated 100 000 urban families using charcoal (World Bank, 2006). Sustainable community-managed forest systems were set up over an area of 378 200 ha, with a supplying capacity of more than 370 600 tons per year of sustainable fuelwood (equivalent to some 67,400 tons of charcoal per year) (World Bank, 2006). Community-based micro enterprises were established including improved carbonization units, apiculture cooperatives, livestock and poultry-raising, etc. It has also established a sustainable income generation base (wood and non-wood products) of about $12.5 million per year, equivalent to a $40,000 average per participating village (World Bank, 2006).
At the demand management and inter-fuel substitutions sides: the program has benefited some 250 000 families in the main urban and peri-urban areas of the country (around 30% of urban and peri-urban families) (World Bank, 2006). It has also benefited several hundred urban-based traders including charcoal wholesalers, charcoal retailers and stove artisans. A promising trade environment has been promoted to allow long-term supply
62 agreements between rural communities and urban traders. Kerosene and LPG, as inter-fuel substitutes, and improved stoves distribution were supported by the private sector and the NGO community.
o Quota policy and its impact Following the energy sector reform, domestic fuels were targeted by the Government under the pressure of development partners as this sub-sector was experiencing cyclic shortages and price increases due to wide speculations on fuels prices. The Government has implemented a biomass quota system based on controlled permits for good management of charcoal production from forest resources. The idea was recommended in order to limit the annual quantities of forest resources to be extracted to meet the cooking fuels needs of households. However perverse effects, in terms of shortages and increased prices, were experienced during its application due to the speculations of permits holders and intermediary agents around the charcoal supply and sales prices. In addition, the sustainability of the resource was threatened, because the resources extracted were not renewed.
o Dissemination of low-energy bulbs and its impacts An initiative that promotes Household electricity savings is being carried out in partnership with SENELEC. The ongoing assessment of the results of this initiative pilot scheme through the use of low-energy bulbs among 684 subscribers is expected to give a good overview of the costs and benefits of this option.
Note 4
While awaiting the results of the pilot operation described above, we shall estimate the contribution of such an approach in the context of Senegal. With a target of 530 996 SENELEC domestic subscribers in 2006 and the equipment of each of them with 2 bulbs of 12 Watts to replace 2 bulbs of 60 Watts and a bulb of 15 Watts to replace a bulb of 75 Watts, one would avoid an installed capacity of 82.84 megawatts. This represents more than the power of “Kounoune 1” power plant for a cost of 8 billion Francs CFA at 2008 June market prices. This operation will avoid a yearly consumption of 13 772 771 300 Francs CFA at an average costs, in 2006, of 91,1 Francs CFA/kWh according to the 2006 SENELEC annual report.
o LPG development as a substitute to traditional domestic fuels
With increased deforestation due to the non rational harvesting of forest resources, the Government undertook since 1974, a massive introduction of LPG based on a subsidy policy targeting «popular» LPG (Domestic Gas bottled in 2.7 kg and 6 kg canisters). The figure below shows the impressive evolution of the subsidies of popular LPG.
The LPG subsidy was essential set to foster the penetration of this fuel in household fuels market. It has become the 3rd household fuel and has allowed women to save significant cooking time for food preparation.
After having boosted the LPG market and forced transition to a new cooking fuel (LPG) it was decided to remove the subsidy and let the market mechanism takeover. The removal of the subsidy is taken as an option for energy security through the suppression of the subsidy burden on the government and the inhibition of speculative behavior. These speculations occur when the government takes time to pay for the subsidy to the importers. This situation creates a shortage in LPG supply and encourages local dealers to keep LPG out of the market and impose higher prices. This obviously affects the purchasing capacity of poor households.
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Figure 22: Evolution of LPG subsidy
o The new electricity tariff system
The new tariff systems is a measure already decided by the Government and still to be implemented by SENELEC. It is expected to create the reflex of energy saving within households. Currently, one cannot anticipate the impact of this new tariff option.
o Specific energy saving measures in the transport sector for households
The public authorities have taken an aggressive measure that forbids imported vehicles which are above 5 years old.
The modernization of the vehicle fleet is another route taken by the Government with the support of the World Bank through an adequate financial mechanism to assist the replacement of old, polluting and dangerous vehicles still in circulation in Dakar.
Strategies and measures by poor households to cope with energy insecurity
The poor households are adjusting spontaneously to the energy crisis. They react according to the constraints the energy crisis is having on the family budget. This readjustment affects their behavior with respect to energy sources use and their positioning on the energy ladder with a tendency to go towards cheaper and less efficient energies.
Demonstrations against increasing energy prices were observed, reflecting the effect of the crisis and confirming the lack of answers and immediate solutions to emergency situations.
For biomass energy in rural and peri-urban areas: the copping measures are expressed through the use of non commercial wood energy which worsens further deforestation. It is the typical case of Pikine populations located around the classified forest of Mbao. Other households, with better financial capacities, have rather opted for improved stoves.
For LPG in urban and peri-urban areas: the measures seem to depend on the households income levels. It is observed that households, with modest incomes, tend to move down the energy ladder by using charcoal and even firewood instead of LPG. Other wealthier households tend to explore the use of high efficiency equipment (improved stoves).
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For lighting: The grid connected poor households having more and more difficulties to pay their energy bills seem to cope with the crisis by: • Limiting their consumption to basic needs by reducing the number of bulbs and other equipment or by the use of low-energy bulbs. The priority remain food products which are also impacted by the inflation derived from the energy crisis; • Delays in payment of electricity bill; • Use of electricity fraud (illegal connections).
This situation has become a fact and partly affects SENELEC cash flow which was readjusted by re-examining the methods of recovering the utility invoices.
D- Barriers to improving energy efficiency
Despite various declarations by the Government to promote energy efficiency, the process has not reached a significant level due to numerous barriers of which:
The lack of a conducive legal regulatory framework for the private sector such as tax and customs reductions and other taxes reductions on private investor’s profits;
The lack of a decentralized financial system: Lack of adequate financial products, such as low interest refinancing schemes granted by the Government to households, with weak financial capacities, in order to gain their adhesion to energy efficiency policies;
Irregular supply of the market with low energy appliances (bulbs, refrigerators etc), which quickly divert users from such policies;
Lack of awareness building and information campaigns: Lack of a pro-active environmental and energy education strategy in order to show to households the energy efficiency impacts on their environment and their standards of living;
The high cost of high energy efficiency equipment and the lack of innovative schemes to facilitate access to appliance that remains out of reach of poor households.
The small size of the market which does not allow economies of scale at a level that would help reducing costs for end users.
E- Impact of energy efficiency measures/policies in the household sector
Due to the energy crisis, households have experienced an increasing gap in their family budget which is a constraint to meeting their basic needs. This is a result of the fuels prices rise as well as other goods and services for which energy is an important input.
The impact of energy efficiency measures on households are of different types according to their economic levels.
For poor households: Taking into account the preponderance of the traditional biomass (charcoal and firewood) in the energy balance of the poor, it is mainly the adoption of the improved stoves which will have a significant impact. This equipment allows 40 to 45% energy saving according to the fuel used.
Sustainable Forest management practices as well as monitoring and control of forest resources exploitation and the prohibition of the quotas, remove speculations, ensure the sustainability of the resource exploitation and eliminate shortages.
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For wealthier households: The LPG option taken by wealthier households has contributed to decreasing the pressure on the forest and to the sustainability of biomass resources already threatened by desertification and the lack of a policy to regenerate harvested tree species. These households have well benefitted from the LPG program and the improved stoves dissemination initiatives due to their capacities to purchase suitable equipment. In the absence of appropriate mechanisms to channel the LPG subsidy towards the targeted poor populations,, rich households were the main sustainable market for LPG.
The expected implementation of LPG market prices would also benefit wealthier households due the expected removal of speculations and frequent shortages caused by the subsidy.
In addition, the increase in fuels storage capacities has attenuated or even removed the shortages in domestic market supply.
The systematization of low energy bulbs which acquisition and renewal is pre-financed by the Senegalese Rural Electrification Agency (ASER) at the request of the subscriber is expected to help them contain the household’s electricity costs and keep within their income capacities. It is also expected to mitigate the effects of the planned application of the new tariffs as well as the impacts of oil price volatility.
F- Linkages between households energy efficiency measures/policies with national energy security
Better efficiency equipments contribute to the reduction of household’s energy consumptions. With respect to national energy security, the effects are as follows:
• Reduction of the negative effect of oil imports on the trade balance; • Reduction in deforestation and greenhouse gas emissions; • Decrease in electricity demand during peak periods and therefore reduction of power outages; • Reduction in the dependence on oil products
Because of the lack of a large scale energy efficiency program for households in Senegal, it is not possible to currently carry out, a thorough analysis of the linkages between energy efficiency in the residential sector and the national energy security.
Undoubtedly, an energy efficiency program in the households sector would require the support of the Government through tax measures, awareness and interest building, education, incentives to the private sector, etc. A Cost/Benefit analysis would help prove the benefits of such program in comparison with the cost of imported and consumed energy.
5.2.2. Promoting Renewable Energy
A- Potential for the use of Renewable energies in the households sector
There are important niches for renewable energies promotion to meet the residential sector needs. These niches are as follows:
Electrification for lighting, refrigeration and communication: The solar electrification master plan elaborated by ASER with the support of the JICA in 2000, has proven a potential of 100.000 households to be supplied in solar photovoltaic (PV).
The typical Senegalese space occupation is characterized by the existence of 8456 villages with less than 250 inhabitants as well as a large number of large villages located far away from SENELEC grid, offers an important niche for the use of renewable energies. Indeed, the economic viability is not guaranteed for any project which would supply these villages through mid-voltage grid extension.
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There is a quite modest introduction of solar refrigeration for wealthy households because of the high costs of the equipment. It is foreseen that technology development will promote the competiveness of this appliance and facilitate households’ access and increase its dissemination.
Communication equipment (radio, TV, etc.) are very suitable to solar energy technology due to their low energy consumption. Households are already using mobile phones with solar battery chargers and inverters of various voltage ranges offer the possibility for solar energy use for appliances previously supplied exclusively through the 220/380 grid voltage.
Water pumping and drinking water Water Pumping for irrigation and productive activities as well as drinking water supply are important niches, with increased technical possibilities (Solar PV, hybrid plants, etc.). These applications have already been used with success in some Senegalese villages.
Water heating High income households are good targets for the increased dissemination of solar water heaters, all the more that the power range of the conventional heaters is very high between 1000 to 1600 Watts which implies very high electricity consumption.
Grain milling Although the dissemination of grain milling equipment has been limited, they are an important niche for renewable energies given their competitiveness compared to conventional equipment thanks to their affordable costs of operation and acquisition. ASER has already installed several locally manufactured prototypes in the islands of Saloum. Dissemination is also being carried out by a private enterprise based Louga (MONTAGRISOL) which benefited from AREED31 support to develop and sell solar mills..
Agricultural products conservation, livestock and fishing Farmers and fishermen have very significant needs for solar drying in order to reduce their production losses, due to the lack of conservation equipment in line with their purchasing capacities. Fruit, vegetables, meat as well as fish drying are important niches still under-exploited and which can be met with decentralized renewable energy systems.
Community services and health This sector has an important potential for renewable energy, particularly solar, for drugs conservation, water heating and emergencies in order to improve the conditions of patients treatment and accommodation.
Others Electricity generation is also a niche for modern biomass applications. Several initiatives are being studied of which the UEMOA32 pilot project in partnership with ASER.
The biogas, exploited in combination with family latrines and the waste valorization of slaughter-houses, are an important renewable energy application for households. Such an approach contributes to clean the environment of rural households, improves their purchasing power while enabling them to undertake agricultural activities using fertilizers from the biogas production waste.
B- Barrier to Renewable energies promotion for households The development of renewable energies has been hindered by the lack of implementation of the regulations which have been, in a part, set up several years ago (Cf. chapter 4).
As far as households are concerned, the introduction of renewable energies was thwarted particularly by:
31 The United Nations Environment Program's Rural Energy Enterprise Development (REED) initiative operates in Africa as AREED to develop new sustainable energy enterprises that use clean, efficient, and renewable energy technologies 32 Union Economique et Monétaire Ouest Africaine
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o The lack of financial options dedicated to ease the upfront cost of renewable energy technology; o The absence of renewable energy directives making compulsory the energy utilization for water heating in the buildings, with the involvement of architects, property developers and banks; o The principle of “Power single purchaser”, which compels independent producers to sell their energy exclusively to SENELEC, prevents the households from having access to other electricity suppliers at better price; o The irregular market supply for some of 12 ; 24 or 48 Volts equipment; o The small market size which does not guarantee economies of scale and costs reduction for renewable energy orders. o The lack of information and limited awareness on the advantages of renewable energies, in particular for wealthy households. The latter continue to believe that it is prohibited in urban environment to use solar energy for domestic lighting.
C- Renewable Energy measures at the household levels
In addition to the national regulatory measures adopted for renewable energies (See Chap 4), other measures were specifically aimed at households, mainly:
o The adoption of the technology neutrality concept in the 2004 policy development letter specific to rural electrification; which allows rural electrification concessions holders to use renewable energies for household electrification. This option is in contrast with the single technology approach of SENELEC, based on the extension of middle voltage grids for domestic supply without any consideration of decentralized options in particular, renewable energies.
o The Rural electrification overall Convention singed in July, 2003, between the ministry in charge of Energy and the ministry in charge of Finances, on the one hand and ASER, on the other hand, is aimed at defining fiscal and financial measures necessary (tax exemptions, subsidies, …) to the success of the rural electrification programs and projects carried out by the Agency. The application of this convention allows tariffs reduction to households supplied with solar kits, or any other form of renewable energy within the framework of the programs and projects initiated by ASER.
D- Impact of renewable energy measures policies in the households sector
Impact on the poor The adoption of the “technology neutrality” concept contributes to reducing household’s electrification delay. ASER has been able to supply solar power for 15.000 households and to install 1115 kWp between 2000 and 2006 thanks to this neutrality principle.
The increase in renewable energy use has allowed the development of water pumping and cereals transformation and the improvement of food conservation processes. It also ameliorated the food productions of poor households (milk, meat fish, fruit and vegetables, etc.).
The above mentioned overall convention on rural electrification made it possible to provide households with affordable electric services. The various exemptions are investment subsidies which contribute to reducing households tariffs.
Some applications using renewable energy technology as a substitution to biomass energy or imported domestic fuels has to some extent contributed to the energy security of poor households.
Impacts on household’s consumption profile The impacts on consumption profile still remain negligible given the tiny share of renewable energy in the energy balances, estimated at around 0.01% for solar energy and 0.84% for hydro power at the national level.
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Impacts on energy costs for households For rural electrification, the reduction of household’s tariffs in rural electrification concessions thanks to various exemptions granted to the concessions holders under the overall convention mentioned before decrease energy costs for households. In addition, there is a tendency towards renewable energy technology costs reduction due to the gradual scale-up of the market.
For poor households, the impacts are rather in terms of improving the life conditions of women and children through the improvement of the following services: o Water pumping and transport; o Collection and transport of firewood; o Extraction of cereal seeds and their grinding and transformation; o Access and enhancement of children education with better conditions to study at home; o Income-generating activities for women due to time saving allowed by access to modern energy; o Reduction of production losses related to agriculture, livestock, fishing and gardening and therefore increasing f households’ incomes.
E- Linkages between household renewable energy measures/ policies and national energy security
The transition of an increased number of households towards renewable energies makes it possible to lower fossil fuel consumption because of the substitution potential offered by these alternative energies which will therefore contribute to replacing an equivalent amount of imported oil products.
Due the limited introduction of renewable energies in the case of Senegal as barely around 0.01% and 0.84% of energy supply come respectively from solar and micro hydro energy compared to fossil fuels; it is not evident to prove a significant linkage between renewable energy for domestic uses and the national energy security. However, if we consider hydropower generation, which represents around 10% of the power mix and provide electricity to households, there is a significant contribution to the hydropower to the national energy security. Not only is this option cost effective but is generated locally without being impacted by the oil crisis.
F- Impact on the society of governmental renewable energy measures/ policies
The adoption of the technology neutrality concept by ASER has allowed, in particular, an increased use of solar PV. This has contributed to increasing the national rural electrification level by 2,7%.
One of the significant impacts lies in the creation of a solar network of equipment installers (FOPEN). Some members of this network became full-fledged entrepreneurs in the sector.
The impact is also seen in terms of reducing the delay (waiting time) for households to gain access to electricity. Access to electricity from the national grid might take longer especially for households located far from the grid.
In addition, renewable energies, in particular PV, have contributed to the attenuation of the isolation of the insular populations thanks to the decentralized uses of this energy.
G- Environmental impact on households of governmental renewable energy measures/ policies
The environmental impact on households of the renewable energy measures/policies is not significant due to their tiny share in the energy balances.
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5.2.3. Other measures
A- Measures
Diversification of energy sources/energy types The interest of the Government in renewable energies has been especially focused on solar energy for rural electrification. However, the will for the energy diversification was particularly expressed for biogas which development has been so far confined to pilot projects for households and will most likely be subject of large scale dissemination. The use of agricultural residues (cotton, rice straw,), for household energy, is also a field of interest for the Government but remains to date at a project study stage.
Regional cooperation The Manantali project implementation has contributed to 10% of the installed capacity, whereas in the sub-region, particularly in Guinea, there is an important economically viable hydroelectric potential estimated at 8000 MW. This hydroelectricity potential is going to increase thanks to the regional co-operation within the framework of organizations of the already identified river basins, namely: the OMVS, the OMVG, and West African Power Pool (WAPP). Households are benefiting from this option in terms of the energy supply availability, especially in the areas surrounding the hydropower plant.
Energy Information System Development Senegal is among the UEMOA countries involved in the development of the Energy Information System (SIE). This tool is a key component for the analysis of the energy sector situation and setting up energy balances. It is also an effective tool to assist the decision making process and to carry out prospective studies. The SIE is elaborated on a regular basis since the year 2005.
B- Impact of these measures/policies
On the households consumption profile Diversification of energy sources using Renewable options such as solar thermal (cookers and ovens) and PV, bioenergy from agricultural residues (peanut shells, bagasse, etc.) and animal waste (biogas generation) has a limited impact on household consumption profile because of their low level of penetration and the limited domestic applications. The last achievements are marginal compared to the demand, thus the solar photovoltaic contribution is just 0.85% overall (0, 01% for solar and 0.84 for micro hydro) of the consumption in the energy balances.
Improved stove dissemination has been quite significant. According to the Energy Ministry; between 225 000 and 250 000 improved stoves has been distributed so far in Senegal. This represents a daily saving of 0.9kg of charcoal per day per household and an overall saving comprised between 73 913 to 82 125 tons per year.
On the financial cost for households Energy sources diversification is not having yet any impact on the financial costs of the household’s consumption.
The significant penetration of hydropower into the energy mix (10%) made it possible to shift towards a more cost effective power generation option e.g. about 18 CFA franc per kWh instead of an average of 59.26 CFA franc for the other thermal generation options (including the purchases from private producers). This cost is 60.27 Franc CFA/kWh for SENELEC grid inter-connected power stations. However, this low cost is not applied through household’s bills as the utility billing system is based on single electricity tariff regardless of the power generation option.
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C- Impacts on the society
The impacts of these measures on the society are as follows:
o Increased awareness of the population on the energy issues which have an impact on their family budget; o Growing interest of the private operators who are exploring opportunities in alternative energies. This interest is visible through the success of programs such as the United Nations Environment Program's Rural Energy Enterprise Development (REED) initiative which operates in Africa as AREED to develop new sustainable energy enterprises that use clean, efficient, and renewable energy technologies. Fourteen projects are in the AREED Senegal pipeline, with five entrepreneurs receiving advanced enterprise development services and a total of seven enterprises presented for investment in 2004.
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Chapter 6- Conclusion, recommendations and suggestions for the next phase
The current energy crisis in Senegal supports the relevance of the study for the case of Senegal. This study results could be extrapolated to other Sub-Saharan countries. Indeed, from Somalia to Senegal, Sub-Saharan populations are experiencing the same energy security issues for both conventional and traditional energy sources.
The energy security at the national level
There are several elements to the threats to the country energy security. The main drivers, characteristics and impacts are summarized as follow:
The lack of in-country fossil fuel resources leads to a high dependence toward oil imports and the exposure of the oil supply to international market unpredictability. Senegal is not only dependant but also vulnerable. This vulnerability is heightened by the low diversification of energy sources and suppliers. It is also worsened by the weaknesses the storage capacities and also by the lack of a core security stock that meets international standards.
The high level of hydrocarbon imports and the high costs of electricity lead to a deficit in the balance of trade and a reduction of financial capacities previously allocated to social sectors such as health, education etc. This ultimately increases the poverty of vulnerable households and drains exports resources. Energy imports account for more than 40 % of the total exports revenues and has reached more than 50% with the recent oil crisis.
The technical constraint associated to the refining system- limited to one type of crude oil processing in Senegal- leads to the dependence on one crude oil and few suppliers. This increases the vulnerability of the energy supply. The lack of production, transport, and distribution infrastructures for refinery and storage is the main cause of the chronic supply-demand imbalance which is compounded by the old age of the current equipment and delays in investment. The lack of control over the technical and commercial losses has contributed to the decrease in the overall efficiency of the power system which reached an unprecedented level of 23 %. As a result, SENELEC lost 20 billion FCFA and the government 4 billion FCFA, in 2007.
The inability of the government to pay SAR for the LPG imports, within a reasonable delay after the product has been taken and invoice submitted, creates a situation of speculations behind the frequent LPG shortages.
The biomass energy sub-sector is rather dominated by the activities of lobbies benefiting from wood harvesting quotas or charcoal production permits. This category of actors is therefore benefiting from a high profit/rent situation and opposing the implementation of the law banning illegal biomass activities. This law stipulates that forests resources exploitation is permitted only in managed areas under the monitoring and control of the government offices.
In the electricity sub-sector, a digressive tariff system is inadequate in an energy shortages context as it stimulates electricity wastes. Furthermore, the single/uniform tariff option is also hindering access to electricity services in peri-urban and rural areas due to the fact that connection prices fixed by the government reflect the associated investment costs. As a result, both the public monopoly and private companies are not investing in these areas unless they are compelled to do so.
At the strategic level, the non sustainability of long term strategic energy options and the slow pace in implementing institutional reforms exacerbate the vulnerability of the Senegalese energy system and result in policy inadequacies.
In order to cope with the vulnerability and the crisis in the energy sector, a number of measures have been decided by the government and comprises the main initiatives:
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To secure petroleum products supply: i) Expansion of the refinery capacities, ii) Construction, through SAR, of 10 000 tons additional storage capacity iii) Erection of a deeper Sea-line to accommodate LPG ships from 12 000 to 15 000 tons; iv) Opening access to the private sector for the construction of a 12 000 tons storage capacity.
In the electricity sub-sector, the government has taken other measures to secure SENELEC fuel supply: i) a 3 months revolving credit to secure the supply; ii) Funds allocation from the national budget iii) Allocation of a financial guarantee to pay for fuel consumption.
Furthermore, and to alleviate the impacts of oil imports on the balance of trade, the government decided to diversify the country energy mix through i) the introduction of coal power stations, ii) the energy valorization of river basins: OMVS and OMVG, iii) strengthening the sub-regional cooperation through the West African Power Pool (WAPP) and attempts for bilateral cooperation with Guinea Conakry to tap its huge hydro potential.
In addition, the government is promoting renewable energy, biofuels and biogas whereas the private sector such as ‘Compagnie Sucrière du Sénégal’ (CSS) is already producing ethanol from sugar cane residues for its transport fleet and mobile engine equipment and generating bagasse based electricity.
For domestic fuels: the signature of a ministerial decree banning charcoal production outside managed forest areas with the objective to ensuring the sustainability of forest resources harvesting. The government has also pledged to remove the quotas system which allowed lobbies to benefit from rent situations. A new mechanism is established to process the LPG subsidy based on a 5 billion CFA cash advance to further secure LPG supply. It was also decided to apply a new electricity tariff system based on a progressive tariff structure based on increasing kWh price for increasing consumption. It is expected that this new tariff structure encourage the consumers to use electricity rationally.
Impact of these measures on national energy security
Most of the above listed measures have been recently launched and they are expected to increase petroleum products security supply, reduce frequent shortages and lead to a reduction of production costs.
In the midterm, the modernization and expansion of production, transport, distribution equipment as well as petroleum products storage facilities will lead to an efficient energy system, economies of scale and will impact on energy prices for household fuels.
The extension of SAR can strengthen the short/midterm policy that aims at fulfilling the rising oil products demand and filling the supply-demand gap that requires additional storage capacities and the development of port infrastructure.
Participatory forest management contributes to increasing household income, village and inter-village groupings. A large dissemination of improved stoves contributes to reducing household energy expenses and greenhouse gas emissions as well as deforestation. The government option to develop renewable energy will lead to jobs creation as demonstrated by the Senegalese-German solar energy project which has created a network of installers, some of which are nowadays fully-fledged entrepreneurs.
In the very short-term, immediate measures are to be taken until the Government decisions on the sea-line and storage capacities are implemented. Measures would comprise the adequate and balanced distribution of domestic fuels. This implies an appropriate share of biomass energy in the household-energy balance to alleviate pressure on imported LPG until a deeper sea line and additional storage capacity are set up to accommodate the increased LPG national demand. Efficiency actions for domestic biomass production and utilization in requested in this respect.
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Energy security at household’s level
The households’ energy insecurity has several aspects, particularly driven by the high reliance on traditional forms, the dependence on the importation of LPG introduced as a cleaner domestic fuel of energy and the level of poverty among population.
Increased deforestation is accompanied with biomass resource rarefaction, increases household poverty particularly for the most vulnerable. If households with higher income have the capacity to adapt, this is not the case for poor households. An interesting hypothesis that deserves further scrutiny is that as a result of the energy insecurity poor households will be moving down the energy ladder and will increasingly rely on polluting traditional energies for domestic use. There’s some evidence for this hypothesis since the share of electricity in total household energy consumption has decreased from 9.1% in 2004 to 6.6% in 2005 and 4% in 2006. In addition, the share of LPG has decreased from 16.4% in 2005 to 11% in 2006, while the share of traditional energy (biomass) in total household consumption has increased from 74.6% in 2004 to 75.9% in 2005 and 84% in 2006. Energy subsidies are not sustainable due to the demographic growth and urbanization leading to an increase of the LPG demand. This subsidy has negative impact due to payments delays by the government to private companies once they have taken their products and submitted their invoice. Such a situation has led the private sector to halt their LPG supply which generates shortages and prices increase.
The slow pace of the energy sector reforms is delaying the involvement of a more suppliers and preventing price competition. In addition, the sea line and storage capacities have been controlled by the Major oil companies (Shell, Mobil, Total, etc) which do not facilitate access by other local companies.
The very limited involvement of IPPs is preventing SENELEC, the sole purchaser, and households to benefit from the possible costs reduction expected from price competition and diversification of power supply.
The low dissemination of improved biomass (wood and charcoal) stoves due their high acquisition cost and the absence of supporting policies for households through specific financing mechanism to purchase and renew energy efficient cooking devices are major barriers for poor households to access them.
The large scale use of renewable energy is hindered by the high costs of acquisition and replacement of renewable technologies and energy saving devices. In addition, there is a lack of effort in the energy sector to know and learn lessons from alternative and innovative management schemes already applied to facilitate rural and urban poor customers’ access to decentralized telephone services and potable water. For the latter, The water utility (SDE: Senegalaise Des Eaux) offers “social connections” in vulnerable neighborhoods for social water meter with diameter less than 15 mm. (small households). This helped increase significantly water access in Senegal.
To insure energy security at household level several measures have been undertaken such as:
The sustainable harvesting of forest resources through participatory management and quota is expected to reduce deforestation and improve households’ income, especially when this measure is coupled with a massive dissemination of improved stoves.
The ongoing PROGEDE program focuses on household energy demand management through the substitution of biomass by modern energy sources such as Kerosene and LPG and the dissemination of improved stoves while supporting sustainable and participative management of forest resources in the Tambacounda and Kedougou regions.
Another initiative that focuses on sustainable and participative management of forest resources is the Program for rural electrification and domestic fuels (PERACOD), which implemented by the Ministry of Energy with support from the German technical cooperation (GTZ).
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The government is also promoting renewable energy and biofuels as well as supply sources diversification. Environmental education and awareness rising exist through environmental training and sensitization still not well widespread because of limited means for their implementation.
Impacts of these measures on household
The case of PROGEDE program, through its supply and demand components, is a good practice in terms of positive impacts for securing households’ energy. The supply chain of charcoal has been improved and to substitution to a cleaned cooking fuels successful (charcoal instead of fuel wood for 30% of urban and per urban households). The management of forest resources benefited to 21% of the population in the forest regions of Tambacounda and Kolda.
The government initiative of reduction of tree extraction from forests areas via managed forests and concerted management by the village and inter-village communities and rural councils has allowed household income increase and contributed to reducing the irrational exploitation of forest resources.
The LPG program, based on the government subsidy, contributed to a high introduction of LPG for cooking purposes. From around 15 000 tons per year in 1987, the LPG consumption has reached around 140 000 tons in 2005. However, the continuation of the LPG subsidy and the nonpayment on time by the Government of private companies has recently had negative impacts. Such a situation has led the private sector to halt the energy supply which generates shortages, speculation, prices increase and further poverty for vulnerable households.
The announced measures to increase storage and refinery capacities, production transport and distribution capacity of energy products as well diversification of energy sources supply will not have an impact in the short term on households’ livelihood due to the time it takes for their implementation.
Linkages between household energy strategies and national energy security
Several links can be drawn with respect to energy security between the household and national level. In term of national resources management, securing LPG supply for domestic uses has positive a positive impact on forest resources conservation and deforestation desertification. LPG use has reduced deforestation by 1% per year. In 2005, the amount of LPG consumed reached 140 000 tons corresponding to around 450 000 tons of charcoal avoided. This means a reduction in deforestation of about, 54 500 ha/year.
Dissemination of biomass energy saving equipment for domestic uses, contribute to reducing biomass consumption and consequently decreasing greenhouse gas emissions and deforestation. According to the Department of Energy, around 250 000 improved stoves have been distributed, so far, in Senegal. This represents a saving of 0.9kg of charcoal per day per household and an overall saving comprised around 80 000 tons per year.
In terms of economic linkages, the large scale supply of LPG, based on subsidies has a perverse effect on energy security at macroeconomic level. The LPG boom has not only increased the subsidy burden on the government but also the LPG imports bills and the gap on the Balance of trade. Accordingly, the decided removal of the subsidy is taken as an option for a sustainable energy security based on the allocation of the Government funds to support to the increasing energy imports and at the same time the apply real market prices and hence inhibit speculative behaviors.
Household’s initiatives and awareness programs on energy savings and energy efficiency are helpful for rational use of energy which limits energy wastes and thus the national oil bill as well as the gap on the balance of trade..
Limits of the study and prospects for the next phase
The large scope of the energy field, the complexity of its internal and external drivers, the diversity of actors and conflicts of interests lead to think that it would be more relevant to carry out in-depth sub-sectoral analyses.
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Priority can be given to targeted areas where the crisis is more acute and where significant policy recommendations can be made and sustainable impacts can be achieved.
Given the results of this study, it seems necessary for a next phase to focus on the two strategic sectors: Electricity and Hydrocarbons for which the oil crisis has even led to demonstrations by the population organized by consumer’s associations due to basic energy products shortages (electricity, LPG and charcoal).
For the oil sector, the research can be focused on securing the sub-regional supply and looking into the harmonization of the customs procedures and into the suitable structures.
Specific themes such as renewable energy and energy efficiency can also be addressed for an extended research, as relevant options to insure energy security, particularly in the context of a country heavily depending on petroleum products and foreign supply.
In-depth analysis can also focus on targeted groups in order to assess the treats of energy insecurity in relation with poverty alleviation. Rural and peri-urban groups would be relevant targets for such research.
Recommendations
The overall assessment leads to assume that beyond the political orientations for energy security, the effort in terms of action plans has always been delayed. The approach to cope with the energy crisis was rather defensive and interventions were limited to securing petroleum products and electricity supply given the frequent and non controlled impacts of fuel shortages and power cuts.
As a result of this study, it seems necessary for the Government to implement the agreed policies in collaboration with all partners. Among relevant policy decisions, there was the privatization of the utility company announced since 1998 and also increasing private sector participation in electricity production and distribution. The differentiated tariffs announced in July 2004 rural electrification policy paper was also another decision that still needs to be implemented. Indeed, the electricity single/uniform tariff in peri-urban and rural areas has had negative impact in securing rural electricity supply because of the higher cost of electrification discouraging private initiatives for these specific targets. The energy security impacts of such decisions would have benefited to households and have had rewarding impacts at the macro-economic level.
The most recent Policy Paper prepared and signed in February 2008, in the midst of the recent oil crisis, is a very relevant strategic framework to overcome the energy vulnerability in Senegal. The policy paper presents a comprehensive outlook of the energy sector and points out strategic lines to secure energy for economic development and poverty alleviation and also to overcome the energy choc experienced due to the high dependence on oil products imports and the lack of financial capacities. The Policy Paper focuses on actions to secure energy imports, the extension and modernization of the oil refining and storage capacity, assistance to the utility for fuels supply and old plants replacement. But again, all these actions are based on support from the government. The Private sector is called upon for limited interventions in power generation and distribution.
Though the government has been keen to the enhancement of storage capacities to secure a regular supply of oil products, it seems that the notion of strategic security storage is not yet a priority. One policy recommendation for coping with major unpredictable oil crisis is the installation of strategic storage capacity to allow oil product supply during oil shocks.
Biomass energy remains one of the critical vulnerability issues with a dual context dominated by biomass and LPG as domestic fuels. Sustainability of both fuels is threatened by external issues such as Climate Change (drought, desertification, etc) and international market fluctuations. In addition to continuing the present scattered actions, it is recommended to elaborate a comprehensive action plan to secure domestic fuels supply (for
76 cooking, heating, etc.) including more alternatives sources of energy. An in-depth analysis of the household energy sector is needed to determine the appropriate domestic energy taking into consideration technical, financial, geographical distribution and market aspects.
Renewable energy development remains among the options in the Policy Paper. It is recommended to concretize the policy will toward renewable through an appropriate action plan with the necessary incentives to overcome the identified, financial and technical barriers and to promote a sustainable market transformation for renewable.
In terms of energy sources diversification, it is recommended to develop the sub-regional and continental cooperation. The OMVS, the OMVG and the WAPP offer appropriate frameworks for electricity generation form hydropower sources.
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