West Africa’s Sustainable Energy Market

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Mahama Kappiah Executive Director

ECREEE

ECOWAS SUSTAINABLE ENERGY WEEK

“Towards a Viable and Robust Energy Market in the ECOWAS region”

17 - 19 October 2016, Accra, Ghana

ECOWAS Overview and Energy Situation

ECOWAS Overview

Area: 5,115,000 km2

Population: 339 million (2014)

GDP per capita: US$ 2,122 (2014)

Electricity production: 59 TWh 32% from renewables

Installed capacity: 16.1 GW of which 4,5 GW renewable energy (28%)

Access to electricity: ~ 34% (2012)

Access to modern energy for cooking: ~ 25% (2012)

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ENERGY SITUATION IN WEST AFRICA

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Interrelated challenges of energy poverty, energy security and climate change mitigation and adaptation

• Low Access to Modern Energy Services One of the lowest energy consumption rates in the world; The poor spend more of their income on low quality energy services; Rural areas rely mainly on traditional biomass to meet their energy requirements; Household access to electricity services is only around 20% (40% in urban and 6-8% in rural areas)

• Energy Security Concerns High vulnerability to fossil fuel price volatility (60 % of electricity generation from oil) Gap between rising urban energy demand, available generation capacities and limited investment capital; High losses in the energy systems (e.g. high energy intensity and low demand and supply side efficiency);

• Climate Change Concerns

Increasing energy related GHG emissions (new investments determine GHGs for the next 20 - 30 years) Climate change impacts vulnerable West African energy systems (e.g. water flows, extreme weather events)

Total Primary Energy Supply in ECOWAS

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• In 2013, total primary energy supply was 189 million toe

biomass 78%

Fossil 21%

Renewable 1%

Elec Import

0%

Power Sector in ECOWAS

Electricity source

• In 2013, total electricity generated was 59.5 TWh

Coal 0%

Petroleum 18%

Gas 52%

biofuel 0%

Hydro 30%

Solar PV 0%

Wind 0%

Other source 0%

Coal

Petroleum

Gas

biofuel

Hydro

Solar PV

Wind

Other source

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Significant RE Resources

Biomass

Solar

Hydro

Wind

ECREEE – the ECOWAS Centre for Renewable Energy and Energy Efficiency

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Established by the ECOWAS Council of Ministers on November 23, 2008 to promote development of sustainable energy markets

Secretariat is based in Praia, Cape Verde with National Focal Institutions (NFIs) across all 15 ECOWAS countries

Officially inaugurated on the 6th July 2010

Appointed by the ECOWAS Energy Ministers as the SE4ALL Focal Point for West Africa

Established with support of core partners:

ECREEE RESULT AREAS

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RESULT AREA 3: Capacities are strengthened and applied RESULT AREA 2:

Tailored policy, legal and

regulatory frameworks created and

implemented

RESULT AREA 1: Effective regional

RE&EE promotion

agency created and efficiently

managed

RESULT AREA 4: Knowledge

management, awareness

raising, networks and advocacy strengthened

RESULT AREA 5: Business and Investment Promotion

ECREEE – 6 Years of operation – 12 regional Programs under implementation – Towards Sustainable Energy

Sustainable Energy Policy

Program SE4ALL Program

Capacity Building and Knowledge Management

RURAL ELECTRIFICATION

Program

Energy Efficiency Program

Project Development and Finance Program

Bioenergy Program

Solar Thermal Program

Clean Cooking Program (WACCA)

Program on Gender

Mainstreaming in Energy Access

Climate Change Program

Small Hydro Power Program

REGIONAL SUSTAINABLE ENERGY POLICIES

Adopted by the ECOWAS Authority of Heads of State and Government in 2013

ECREEE is coordinating the implementation of the RE and EE Policies

Similar process to development, implementation and monitoring of the EU Directive 2009/28/EC on Renewable Energy

Regional policies represent a voluntary contribution of ECOWAS to the SE4ALL Initiative

ECREEE is the SE4ALL Focal Institution for ECOWAS

Sustainable Energy Country Action Plans developed across the 15 Member States

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Developed in Partnership with European Union, RECP, EUEI-PDF UNIDO, Austria, Spain & GEF

First ECOWAS RE and EE Status Report

Launched in November 2014

Collaboration with REN21 and UNIDO

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ECOWAS – Energy Access

ECOWAS Regional Objectives ENERGY ACCESS

• Provide access to clean cooking energy to 100% (60%) of the population by 2030 (2020), including 26% (20%) of LPG users

• Promoting 60,000 mini-grids and 2.6 million stand-alone systems across the region by 2020

RENEWABLE ENERGY

• By 2020(2030), 6.8% (5%) of generation capacity worth 634 MW (2000 MW) from biomass residues or dedicated plantations

• The share of renewable energy (incl. large hydro) of the overall electricity mix will increase to 35% (48%) in 2020 (2030)

• The share of new renewable energy such as wind, solar, small scale hydro and bioelectricity (excl. large hydro) will increase to 10% (19%) in 2020 (2030)

• The share of ethanol/biodiesel in transport fuels will increase to 5% (15%) in 2020 (2030)

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ECOWAS Targets on electricity access

• The Electrification rate should increase from 34% (2012) to 88% (2030)

• Over 60 million households will gain access to electricity over the period 2015-2030

34% 39%

67%

77%

88%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

10000

20000

30000

40000

50000

60000

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80000

90000

2012 2015 2020 2025 2030

ele

ctri

fica

tio

n r

ate

tho

usa

nd

ho

use

ho

lds

ECOWAS targets on electricity access

Urban HH Rural HH Electrification rate

ECOWAS Planned Increase in Electrification

• Increase the number of households electrified (on grid and off grid) from 1.7 million per year to 4.7 million per year

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1000

2000

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2015 2016-20 2021-25 2026-30 Th

ou

san

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ou

seh

old

s p

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Annual number of connected Households

Urban HH Rural HH

ECOWAS Targets on modern & efficient fuel access

• The access to modern and efficient cooking fuel should increase from 25% (2012) to 83% (2030)

• Over 60 million households will gain access to modern and efficient cooking fuel over the period 2015-2030

25% 31%

57%

72%

83%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

10000

20000

30000

40000

50000

60000

70000

80000

2012 2015 2020 2025 2030

Acc

ess

rat

e

Tho

usa

nd

ho

use

ho

lds

ECOWAS targets for access to modern & efficient cooking fuel

HH w modern energy (Butane, Biogas) HH w improved cookstoves Access rate

Planned Increase in Butane Consumption

• LPG consumption for cooking will increase from 0.5 to 3.5 million tonne per year

• The number of households gaining access to LPG will increase from 0.6 to 1.5 million per year

-

20

40

60

80

100

120

140

-

1,000,000

2,000,000

3,000,000

4,000,000

2012 2015 2020 2025 2030

kg b

uta

ne

/ H

H /

ye

ar

Ton

ne

Bu

tan

e

ECOWAS targets for butane supply to Households

Butane (tonne) kg butane/ HH / year

Planned Increase in Use of Improved Cook Stoves

• The number of households gaining access to improved cook stoves (ICS) will increase from 1.1 million to 2.7 million per year

• After 2020, the number of HH gaining access to ICS will decrease because of saturation of the urban market and penetration of butane

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

2013-2015 2016-2020 2021-2025 2016-2030

Tho

usa

nd

ho

use

ho

lds

pe

r ye

ar

Annual number of households gaining access to improved cook stoves ICS

Rural HH

Urban HH

ECOWAS National Energy Efficiency Action Plans (NEEAP)

ECOWAS Regional Objectives

ENERGY EFFICIENCY

• Elimination of incandescent lamps by 2020

• Reduce losses in electricity distribution from currently 15% - 40% to less than 10% by 2020

• Achieve universal access to safe, clean, affordable, efficient and sustainable cooking for the entire population of ECOWAS by 2030

• Create an ECOWAS technical committee for energy efficiency standards and labels, and adopt the first standards and labels on a regional scale for major energy-using equipment by the end of 2014

• Create instruments to finance sustainable energy, including carbon financing, by the end of 2013

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ECOWAS Planned Evolution of Biomass Consumption

• The promotion of LPG and improved cook stoves will permit to curb the firewood demand below sustainable supply capacity: • Less than 200

million ton per year in 2030,

• Instead of currently around 250 million ton per year

0.1%

7.2%

33.4%

48.8%

58.9%

0%

10%

20%

30%

40%

50%

60%

70%

0

50000000

100000000

150000000

200000000

250000000

300000000

350000000

400000000

450000000

500000000

2012 2015 2020 2025 2030

Savi

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ase

line

sce

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io

Fire

wo

od

de

man

d (

ton

ne

/an

)

Primary Firewood demand in ECOWAS region

Firewood baseline Firewood SE4ALL Savings (%)

ECOWAS– National Renewable Energy Action Plan

(NREAP)

ECOWAS Regional Objectives

RENEWABLE ENERGY

• By 2020(2030), 6.8% (5%) of generation capacity worth 634 MW (2000 MW) from biomass residues or dedicated plantations

• The share of renewable energy (incl. large hydro) of the overall electricity mix will increase to 35% (48%) in 2020 (2030)

• The share of new renewable energy such as wind, solar, small scale hydro and bioelectricity (excl. large hydro) will increase to 10% (19%) in 2020 (2030)

• The share of ethanol/biodiesel in transport fuels will increase to 5% (15%) in 2020 (2030)

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ECOWAS Planned Increase in RE Generation Capacity

• The share of renewable generation capacity will stay around 20%

0%

5%

10%

15%

20%

25%

30%

35%

0

5000

10000

15000

20000

25000

30000

35000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Rat

io R

E ca

pac

ity

to t

ota

l in

stal

led

cap

aict

y

Inst

alle

d R

E ca

pac

ity

MW

Renewable Energy Generation Capacity Forecast

Hydro Solar Biomass Wind Ocean Storage RE/Installed capacity

Implementing the Action Plans

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

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Regional initiatives and strategies

Public Private Partnerships in ECOWAS

• Cabo Verde: Cabeolica 26 MW Wind power project is the result of a PPP between the Gov. of Cabo Verde, Electra (Utility) and InfraCo Africa.

• The Gambia: The Tanji 900 kW Wind power project resulted from a PPP between the Gov. of Gambia through a GEF-UNIDO fund and Gamwind Ltd.

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Policy Instruments for Promoting Grid-Connected

1. Feed-in tariffs (FIT)

Three countries in the region (Gambia, Ghana, Nigeria), introduced or are planning to introduce FITs for RE incl. solar PV, but limited results so far (20 MW in GHA).

2. Net metering (NM)

Four countries in the region introduced NM (Cabo Verde, Gambia, Ghana and Senegal), but limited uptake so far.

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Overview of IPP tenders in the Region

Currently supported by ECREEE

ECREEE Support under discussion

In preparation

EOI launched in 2014, shortlist completed, on-hold

1st process completed in 2014, 2nd in preparation

On-going On-going

On-going

On-going

In preparation

Competitive Tendering & Bidding in the ECOWAS

IPP tenders

Several countries in the region have conducted, are conducting or planning to conduct IPP tenders (for 2016 - Nigeria, Mali, Sierra Leone)

Process driven by MoE, regulator, utility or PPP unit

Some are site-specific, some are open

With and without support from international organizations

With and without credit enhancement

In some countries, the process was started but not followed through

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The Regional Dimension

• Joint initiative with IRENA on West Africa Clean Energy Corridors incl. corridors for solar energy, hydropower and wind

• The European Union pledged support for the Corridors Initiative

• So far no cross-border trade of electricity from RE, but this is expected to increase as more and larger projects come online

Will be reflected during the revision of the Regional ECOWAS Electricity Transmission and Generation Master Plan

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

Way Forward

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Identification of high resource potential and environmentally sustainable zones for development of cost effective renewable energy power plants

National and regional planning and support mechanisms for integration of cost effective RE power options into national and regional master plans for power generation and transmission

Enabling policy, regulatory and institutional frameworks to promote investments

Facilitate project pipeline development and access to finance and risk mitigation mechanisms

Capacity building to plan, operate, maintain and govern power systems with higher shares of renewable electricity generation and reduce technical and commercial losses

Public awareness and incentives regarding benefits and uptake of energy efficiency measures

CORE

NEW

INVESTMENT

TECHNICAL

OTHER

Strong Partnerships are KEY

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Thank You

Mahama Kappiah Executive Director

ECREEE

ECREEE Secretariat Achada Santo Antonio

ECREEE Building, 2nd floor C.P. 288, Praia, Cabo Verde

Tel: +238 2604630, +238 2624608 Email: info@ecreee.org

www.ecreee.org

10/24/2016