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Republic of Liberia REPUBLIC OF LIBERIA NATIONAL ENERGY SECTOR WHITE PAPER MINISTRY OF LANDS, MINES AND ENERGY MONROVIA, LIBERIA FEBRUARY 2007 FOREWORD Access to energy services is indispensable to national development, poverty reduction and achieving the Millennium Development Goals (MDGs). This has been formally affirmed by the International Community through the launching of a number of energy related initiatives since the World Summit on Sustainable Development (WSSD) in Johannesburg in 2002. th From the regional perspective, the 7 Meeting of ECOWAS Ministers of Energy held in th Accra on 28 October 2005 adopted a resolution relative to regional policy on access to energy services for rural and peri-urban populations in line with achieving the MDGs in the sub-region. To ensure political commitment to the issue of energy access, the Authority of Heads of State and Government of ECOWAS at its 29th extra-ordinary summit in Niamey, th Niger on 12 January 2006, adopted Decision A/Dec.24/0106 relating to the ECOWAS Regional Policy for increasing access to energy services in the sub-region. In furtherance of these global and regional initiatives, the Government of Liberia, in collaboration with its development partners hosted a National Energy Stakeholders’ Forum in October 2006 to chart the way forward for the energy sector of Liberia. In her keynote address at the opening session of the Forum, President Ellen Johnson-Sirleaf stated ardently that her Government is committed to increasing access to energy services in the country, especially for rural and low-income population. In this regard, the Government will consider various institutional models based on best practices in order to develop and ensure that our policy of poverty reduction is fully supported through the provision of sustainable energy services to all consumers. The Government believes that the private sector and public-private partnership (PPP) arrangements will play key roles in the medium to long term energy sector. In line with various concerns and recommendations put forth by participants at the National Energy Stakeholders’ Forum, the Government has drafted this National Energy Sector White Paper to form the basis for formulating a National Energy Policy and Master Plan for Liberia. It is our hope that this White Paper will provide the strategic vision in addressing the energy-poverty relationship in Liberia and galvanize concerted actions by the Government and its development partners in order to foster our national development agenda, adequately tackle poverty, and make progress towards achieving the MDGs in the country. Eugene H. Shannon (PhD) Minister of Lands, Mines, and Energy Republic of Liberia i ACKNOWLEDGEMENTS The Ministry of Lands, Mines and Energy, on behalf of the Government of Liberia, expresses thanks and appreciation to the Government of the United States of America, for the support provided through USAID/International Resources Group (IRG) in the preparation of this White Paper. Special thanks go to the European Commission (EC), and the Government of Ghana for their support to the energy sector of Liberia. Many thanks to the Liberia Electricity Corporation (LEC), Liberian Reconstruction and Development Committee (LRDC) in the Office of the President for their contribution and all others who have contributed one way or another to the success of this White Paper. We also wish to acknowledge the support being provided by the Renewable Energy and Energy Efficiency Partnership (REEEP) through its local partner, the Center for Sustainable Energy Technology (CSET). ii CONTENTS 1.0 Introduction..................................................................................................Error! Bookmark not defined. 2.0 Background...................................................................................................Error! Bookmark not defined. 2.1 Energy Policy..........................................................................................................................................5 2.2 Tariffs ......................................................................................................................................................7 2.2.1 Overview ...................................................................................................................................7 2.2.2 Tariff Setting Principles ..........................................................................................................7 2.2.3 Financial Operations ...............................................................................................................8 2.2.4 Subsidies....................................................................................................................................9 2.3 Current Situation in the Petroleum Sector.......................................................................................10 2.4 Current Situation in Renewable Energy...........................................................................................11 2.4.1 Renewable Energy Resource Base.......................................................................................11 2.4.2 Role of the Rural Electrification & Renewable Energy Agency.....................................15 3.0 Critical Policy Issues.........................................................................................................................................16 3.1 Restructuring of Ministry of Lands, Mines & Energy....................................................................16 3.2 Electricity Policy Reform....................................................................................................................17 3.2.1 History .....................................................................................................................................17 3.2.2 Role & Structure of LEC......................................................................................................18 3.2.3 Role & Structure of LERC: Why Does Liberia Need a LERC?.....................................24 3.3 Critical Policy Issues: Petroleum Sector...........................................................................................28 3.3.1 Upstream Petroleum Sector .................................................................................................28 3.3.2 Downstream Petroleum Sector............................................................................................30 3.4 Rural Energy, Energy Access, and Renewable Energy Options in Liberia ................................32 3.4.1 Introduction and Background..............................................................................................32 3.4.2 Rural Energy Needs...............................................................................................................33 3.4.3 Comparing Renewable and Fossil Fuel Options for Off-grid Regions.........................34 3.4.4 Renewable and Hybrid Electricity Options for Rural Development in Liberia...........35 iii 3.4.5 Best Practices and Lessons Learned for Renewable Energy...........................................38 3.4.6 Specific Technical/Institutional Initiatives ........................................................................40 3.5 Regional Cooperation..........................................................................................................................45 3.5.1 ECOWAS Energy Protocol .................................................................................................45 3.5.2 West African Power Pool--WAPP......................................................................................45 3.5.3 West African Gas Pipeline—WAGP..................................................................................46 3.6 Institutional Arrangements ...............................................................................................................46 3.7 Conclusions and Key Actions............................................................................................................47 3.7.1 Principal Conclusions............................................................................................................50 3.7.2 Principal Actions....................................................................................................................52 iv LIST OF FIGURES Figure 1- Current Organizational Chart of MLME ............................................................................................16 Figure 2 – Organizational Chart of Reorganized MLME ..................................................................................17 Figure 3. Phase I: November 2006–June 2007 ....................................................................................................21 Figure 4. Evolution of Phase II: 2012 and Beyond.............................................................................................24 Figure 5. Typical structure of a minihydro power plant.....................................................................................37 Figure 6. Commercial Prototype “Plop and Drop” Power Center...................................................................40 Figure 7. Coconut and Jatropha Oil-fueled Multi-function Platforms.............................................................43 Figure 8. Mayon Turbo Stove.................................................................................................................................44 v LIST OF TABLES Table 1. Hydropower Classification
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