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The Gambia: Issues and Options in the Energy Sector Public Disclosure Authorized Report No. 4743-GM The Gambia: Issues and Options in the Energy Sector Public Disclosure Authorized November1983 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Report of the JointUNDP/%brld Bank Energy Sector AssessmentProgram Thisdocument has a restricteddistribution. Its contentsmay not be disclosed without authorizationfrom the Govemment,the UNDPor the World Bank. JOPIIUTNDP/ T ORL BAN\K ENrYV C,ECICR ASSESSMIENT MTISSION REPOPTS .- READY ISSULED Country 'Dace No Indcnesi`.a Novenmber 1981 3543-LND U-'-uI-.itius Decen.P'er 1981 3510-HAS Kcn,va May 1982 3800-KE Sri Lanka lay 1982 3794-CE Z IT ,7 e J,une 1982 3765-ZIM Ma,t:i June 1982 3672-HA Papua New Guinea June 1982 3882-PNG Buri.undi June 1982 3778-BU Rwanda June 1982 3779-RW Malawi August 1982 3903-MAL Bangladesh October 1982 3873-BD Zambia January 1983 4110-ZA Turkey February 1983 3877-TU Bolivia April 1983 4213-BO J L June 1983 4462-FIJ Solomon Islands June 1983 4404-SOL Senegal July 1983 4182-SE Uganda July 1983 4453-UG Sudan July 1983 4511-SU Nig,eria Au,gust 1983 4440-UNI Nepal Au,gust 1983 4474-NEP FOR OFFICIAL USE ONLY Report No. 4743-GM THE GAMBIA ISSUES AND OPTIONS IN THE ENERGY SECTOR November 1983 This is one of a series of reports of the Joint UNDP/World Bank Energy Sector Assessment Program. Finance for this work has been provided, in part, by the UNDP Energy Account, and the work has been carried out by the World Bank. This report has a restricted distribution. Its contents may not be disclosed without authorization from the Government, the UNDP or the World Bank. ABSTRACT The Gambia relies completely on imported petroleum to meet its commercial energy needs, including the generation of electricity which is entirely diesel based. At present, the Government is facing acute diffi- culties in servicing the petroleum import bill because of depressed ex- port prices for the Gambia's major export, groundnuts. This report reviews the implications of recent changes in petroleum supply arrange- ments for the Gambia and recommends technical assistance to enable the Government to decide on a least-cost option to improve the energy situa- tion. The capital city of Banjul has been short of power since late 1977, when an explosion damaged the existing power station at Half Die; efforts to restore adequate capacity for the Banjul also are examined. The performance of isolated diesel-based power systems in the provinces is reviewed, as is GUC's request for assistance to carry out an emergency overhaul and rehabilitation program to prevent permanent breakdown and loss of several units. Progress on developing indigenous energy re- sources is examined, including the application of groundnut residues and solar energy to substitute for diesel uses. The status of technical assistance to energy sector institutions is reviewed and recommendations are made for strengthening the Energy Unit of the Ministry of Economic Planning and Industrial Development. The report concludes with a detailed list of investments and technical assistance requirements for developing the Gambia's energy sector. ABBREVIATIONS AND ACRONYMS boe barrel of oil equivalent DCD Department of Communty Development DOF Department of Forests EMPS Energy Master Plan Study (UNSO) GDP Gross Domestic Product GGFP Gambia-German Forestry Project GJ gigajoule = 1 million kilojoule GPMB Gambia Produce Marketing Board GTZ German Technical Assistance Agency GU Geological Unit GUC Gambia Utilities Corporation ha hectare HDS Half Die Station HFO Heavy Fuel Oil KPS Kotu Power Station kcal kilocalorie kg kilogram kj kilojoule kW kilowatts kWh kilowatt hour m3 cubic meter mm millimeter MEPID Ministry of Economic Planning and Industrial Development MW megawatt MWh megawatt hour NEC National Energy Commission p.a. per annum RE Rural Electrification toe tonne of oil equivalent tonne metric ton Currency Equivalents D 2.70 = US$1.00 D 4.00 = UK Pound 1.00 1/ US$1.48 = UK Pound 1.00 11 The exchange rate of the Gambian currenLcy, the Dalasis (D), is pegged at 4 to 1 UK Pound Sterling. Conversions to US dollars are made at prevailing quotations of the US dollar exchange rate with that of the UK Pound Sterling. The above reflect exchange rates for August 1983. This report was prepared by Mr. Amarquaye Armar on the basis of informa- tion available in a number of studies of Gambia's energy problems (listed in Annex III), and through additional information gathered during a mission in August 1983. That mission, which comprised Messrs. M. Ahmed (mission leader), A. Armar (energy planner) and R. Chronowski (energy technology consultant) also discussed a draft of this report with the Government of the Gambia and agreed upon the recommendations for policy action and technical assistance requirements described in the report. Energy Conversion Factors Fuel toe per Physical Unit I" Petroleum Products (tonnes) 2/ LPG 1.08 Gasoline 1.05 Kerosene/Jet Fuel 1.03 Diesel Oil (LDO) 1.02 Electricity (MWh) 0.25 3/ Biomass Fuels (tonnes) Firewood 0.33-0.35 Groundnut Husk/Shell 0.37 1/ 1 toe = 10 million kcal = 6.61 boe = 39.68 million Btu 2/ LPG = 1730 liters/tonne Gasoline = 1357 liters/tonne Kerosene/Jet Fuel = 1229 liters/tonne Diesel (LDO) = 1187 liters/tonne 3/ Converted at thermal efficiency of 34% or 4 MWh per toe. Table of Contents Page No. SUMMARY OF FINDINGS AND RECOMMENDATIONS ................ i I. ENERGY AND THE ECONOMY ........................ 1 Country Economic Situation.................. 1 Petroleum Imports ........................... 2 Energy Balance for 1982 ..................... 3 II. ENERGY DEMAND, PRICES AND SUPPLY OPTIONS...... 5 Petroleum................................... 5 Historical Demand ......................... 5 Petroleum Projections ..................... 7 Petroleum Prices .......................... 7 Petroleum Supply Arrangements............. 9 Petroleum Handling Facilities ............. 11 Electricity ................................. 13 Electricity Tariffs ....................... 14 Power Supply Options...................... 16 Woodfuel .................................... 21 Fuelwood Consumption ...................... 21 Cooking Fuel Options for Urban Households ........................ 22 Stove Development ......................... 23 III. ENERGY RESOURCE DEVELOPMENT PROGRAMS .......... 24 Overview .................................... 24 Forest Energy Resources ..................... 24 Reforestation ............................. 25 Utilization of Mangrove Resources ......... 26 Hydropower in the Gambia River Basin ........ 27 Hydrocarbon Prospects....................... 29 Oil and Gas ............................... 29 Peat...................................... 30 Nonconventional Energy Resources ............ 30 IV. FUEL SUBSTITUTION OPTIONS..................... 32 Utilization of Groundnut Residues ........... 32 The Role of Solar Water Heaters ............. 33 V. DEVELOPMENT OF ENERGY INSTITUTIONS............ 35 Management and Coordination of the Sector... 35 Energy Subsector Operations ................. 35 Gambia Utilities Corporation (GUC)........ 36 Department of Forestry (DOF).............. 37 The Geological Unit ....................... 38 Other Responsibilities .................... 39 Page No. VI. ENERGY TECHNICAL ASSISTANCE AND INVESTMENT REQUIREMENTS ....................... 40 Summary of Energy Demand Projections...... 40 Energy Investments ........................ 40 Summary of Technical Assistance Requirements ............................ 42 ANNEXES Annex I Notes on the Energy Balace .45 Annex II Energy Technical Assistance Proposals .46 Annex III Gambia Energy Assessment".............. 52 Annex IV Solar Water Heating Analysis.55 Annex V The National Energy CommiLssion Terms of Reference .59 Annex VI Petroleum Product Pricing Zones in The Gambia .60 FIGURES 2553 17 MAPS IBRD 17424 IBRD 17169 IBRD 15416 SUMMARYOF FINDINGS AND RECOMMENDATIONS Overview 1. The Gambia relies entirely on imports to meet all its petroleum needs. This includes electricity which is based on diesel systems. The Government's difficulties in servicing the country's growing oil import bill have become acute in recent years because declining groundnut pro- duction and low export prices have reduced foreign exchange earnings to critically low levels. The net effect is that oil imports, which ab- sorbed only about 9% of commodity export earnings in 1974/75, now account for over 22% of such earnings in a good year. In a bad year such as 1980/81, when the country was particularly hard hit by the poor groundnut harvest, oil imports absorbed about 70% of such earnings. The outlook for improvement is not favorable, as export prices for groundnuts are not expected to improve much over current levels, and the Government may eventually be compelled to introduce some form of rationing petroleum products to ensure essential supplies to important sectors of the eco- nomy. In practical terms, the country's options for reducing petroleum imports are limited by a relatively modest indigenous energy resource endowment. There is some possibility of economically exploitable oil and gas deposits in the Gambia's sedimentary basin but this requires system- atic exploration. Hydropower and peat are marginal energy resources, and applications of nonconventional sources (solar, wind) are yet to be fully assessed. 2. The Gambian economy is based on non-energy intensive agriculture and groundnut production. The modern sector, which comprises commerce, public works, tourism and small industries, is growing in importance due
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