Senegal Energy Situation

Republic of Senegal
Flag of Senegal			Senegal Location
Capital			Dakar (14° 40′ 0″ N, 17° 25′ 0″ W)
Official Languages(s)			French
Government			Republic
President			Macky SALL (since 04-2012)
Prime Minister			Aminata TOURE (09-2012)
'Total Area '( km²)			196,722 sq km
Population			13,300,410 (July 2013 est.)
GDP (Nominal)			$13.89 billion (2012 est.)
GDP Per Capita			$2,000 (2012 est.)
Currency			CFA franc (XOF)
Time Zone			UTC
Calling Code			+221
Electricity Generation			2.769 TWh/year
Access to Electricity			45%
Wind energy (installed capacity)			MW (year)
Solar Energy (installed capacity)			MW (year)

Overview

The Senegalese energy sector is relatively small. Total fossil fuel provision stands at 27 TWh/year, thereby making up nearly 40% of Senegal's primary energy provision of which the remainder is nearly entirely biomass (well over 50%) - most of which non-renewable - complemented by some coal and some hydro and solar for renewably generated electricity.

In terms of consumption, the large biomass share in energy provision is for the by far biggest part used for cooking in households, either as firewood (58% of households) or after carbonisation as charcoal (26 % of households). In addition 11% of households use LPG for cooking (mainly in bigger towns), 4% use electricity and 1% uses lampoil. The LPG share thereby is smaller than one would expect based on prevalence of LPG stoves (e.g. in Dakar, where 20% of Senegal's population lives, over 90% of households have LPG stoves) - as LPG supply is not always reliable, in which case (urban) households fall back on charcoal.

Cooking overall also easily accounts for the largest share of household energy consumption; while the electrification rate at 45% is not even very low, electricity consumption in households is still limited.

In total only some 10% of final energy consumed concerns electricity, largely generated by fossil fuels (diesel-gensets) and for a small part renewably (hydro, wind and solar). The renewable potential however is large, and little by little is getting recognised : along the coast there's good potential for windpower; irradiation throughout the country at 5-7 kWh/m2/day is favourable for PV, in addition to which there's hydropotential along major rivers - though with rainfall predicted to decline by some 20% over the next decades, hydro’s role in Senegal’s energy mix should be carefully tailored.

The below diagram shows the development over time of the energy consumption of households, transport and industry.

Senegal´s energy consumption 2000-2006 subdivided into sectors

As a whole, the energy-sector has to deal with inefficient technologies, a low density distribution grid, a lack of regulatory framework and weak financial structures.

Biomass

As biomass accounts for more than half of Senegal's energy consumption, the pressure on Senegalese forests is high, and the use of biomass for cooking is responsible for a large part of the depletion of the country's forest stocks. In the medium term deforestation will create bottle-necks in the supply of cooking energy, particularly for the poorest households.

Demand for charcoal from Senegalese forests also may well increase if and when subsidies for LPG would be phased out in reaction to pressure from the West African Monetary Union, prompting poorer households to return to their traditional fuel usage patterns. Thereby the effect might be aggravetd as particulalrly such poorer households might not be able to afford efficient (charcoal) cookstoves - implying they'd subsequently use low efficiency charcoal stoves.

In the urban and peri-urban Dakar region, the high demand for traditional fuels nowadays can only be exploiting wood sources up to 500 km away from the capital. While Senegal still counts a relatively high share of primary forests, deforestation leads to annual forest-losses of 0.5 percent, which comes close to the average of Western African countries. Anyway, figures from FAO on Africa and Senegal in particular indicate that agricultural land clearance eventually will become, or already is the predominant cause of deforestation.

Due to the high demand, the price of charcoal increased by 42 percent between 2005 and 2008, which is, however, still less than the increase in the ceiling price for LPG that increased by 48 and 63 percent for the two main bottle sizes (3.5 and 6 kg) respectively. Thereby, cooking energy increased disproportionately compoared to the 14% increase in general consumer prices in the same period. .

Some key figures:

• 40,000 ha of forest are lost every year (to chopping for firewood, forest fires, desertification)
• the price of traditional fuels (firewood, charcoal) has more than doubled in the last 10 years
• between 5,400 and 6,300 people annually die from diseases caused by indoor air pollution
• 45 % of Senegal’s primary energy demand are covered by firewood (31 % directly as firewood and 14 % as charcoal)

The Senegalese government has recently published several policy orientations, thus beginning to address these extremely urgent issues. Nevertheless the Senegalese forest sector lacks institutional capacities and efficiency in order to launch basic reform processes and to implement sustainable changes on a large scale and to face deforestation.

LPG

In the 1970’s the government launched the national butanisation programme in order to re-place charcoal consumption by Liquefied Petroleum Gas (LPG) through subsidies and promotion campaigns, resulting in around 70 percent of urban households in Senegal and nearly 90% of households in Dakar using LPG as primary cooking fuel. The Senegal Ministry of Energy estimated the annual saving of firewood and charcoal to be 70,000 tons and 90,000 tons, respectively. To learn more about the project, click here.
Nevertheless, biomass resources and wood in particular continue to be unsustainably ex-ploited.

Electricity

Since the year 2000 electricity production increases by approximately 7% annually and stood at 2,8 TWh in 2012. Over 80% of its generation results from fossil fuel powered plants / gen-sets, 2% from gas power plants, 2% from co-generation, 10% from hydropower plants, and 2% from other renewable sources (PV, wind, some renewable biomass). At present approximately 5 GWh/year is produced decentralized with PV application.

As demand for electricity grows a lot faster than its supply, Senegal is facing serious problems. The national utility SENELEC lacks an efficient organisational structure and lacks (access to funds for) investments in powerplants and transmission-lines in order to cope with the increasing demand. Reserve capacity presently is insufficient, causing frequent (scheduled or unscheduled) outages of whole districts, while transmission losses, old thermal power plants and increasing oil prices result in high average production costs. The below graph shows consumption and capacity over time, underpinning the above.

Installed Capacity and Electricity Production in Senegal

Nevertheless and in comparison to neighbouring countries, the electrification rate is relatively high: at 75% in urban areas and 17% rural, the national average is 45 %, up from approximately 30% a decade ago. In comparison, in neighbouring Mali national coverage is just 25%. However, this (rural) coverage also implies the governments' ambitious target to achieve 50% rural electrification by 2012 has not nearly been achieved.

Electricity Generation, Transmission and Distribution

Electricty Generation

Senegal’s total installed capacity is 638 MW (2010 est) of which 80% is connected to the national grid. SENELEC owns power stations with nearly 60 % of the total production capacity while the remainder is private, either GTI-Dakar or ESKOM-Manantali.

As indicated above, over 80% is generated by diesel plants, while there are also gas-, steam- and gas-steam power plants. As a result electricity production costs strongly depend on the world market oil-price and the local Diesel price, both for the national grid as well as mini-grids. However, due to subsidies the consumer price is kept artificially low.

Some 10% of the total instyalled capacity comes from the 60 MW that Senegal uses of the 200 MW Manantali hydroelectric power plant at the border with Mali.

Transmission

There are two grid-systems: the 90 kV national grid and the 225 kV supranational grid, together totalling some 13,000 km. Both are managed by SENELEC. The grid mainly supplies urban areas around Dakar, Thies, St. Louis and Kaolack/Fatick with electricity. But there are several isolated networks in order to power some remote areas.

The following map shows the current electricity transport lines as well as main power plants.

Electricity transport and production

Distribution

All distribution is carried out by SENELEC.

Rural Electrification

Senegal consist mostly of villages classified as small rural localities with less than 500 inhabitants (84 %). Such villages accounted for 46 % of the rural population in 2003. These communities are of less interest for private investors due to high investment costs and relatively low revenues.

The Senegalese government developed a concessionaire-model to electrify rural areas. It has two main instruments for action:
- Large scale concessions through the Rural Electrification Priority Programme (PPER) and
- Smale-scale concessions named ERIL (Local Initiative for Rural Electrification”)

The Senegalese Agency for Rural Electrification (ASER) is responsible for the implementation of both instruments (see Public Institutions and Actors). The model works as follows:

In the PPER it was decided to divide the whole of Senegal into concession zones (9 concessions remain after a consolidation). International donors and the Senegalese government provide large amounts of money to supply the concessionaires with sufficient funds for their rural electrification activities. The donors involved are the World Bank, the German development bank KfW (1 concession) and the African Development Fund. The government provides up to 70 % of funds required for investment and engineering. The concessionaire is charged with 20 % and the users with 10 %. End users will be charged with cost covering tariffs. All donors have dedicated a share of their funds (ca. 15 %) for the installation of renewable energy systems.

The first concession was awarded in 2008. Within the large concession areas municipalities can apply for ERIL loans (Electrification Rurale d’Initiative Locale – rural electrification through local initiatives) to implement electrification projects themselves. In ERILs, the same rules apply for subsidies as in the concessions (70 %/ 20 %/ 10 %). For all ERILs an application has to be prepared and submitted. Then, ASER and the respective concessionaire have to approve the project.

The concessionaires will start their rural electrification activities soon, but they will only reach a small part of the rural population. Following ASER's current strategy, almost all villages that are not located in vicinity of medium tension power supply lines will not be supplied with electricity within the next 10 to 15 years. In the concession zones of KfW in the Peanut Basin and the Casamance, for example, about 1 million people in 2,600 villages will not be connected to the grid.

Although in principle the two concession models of ASER (large-scale concessions (PPER), and concessions based on local initiative (ERIL)), in conjunction with the tariffs set by the regulatory authority, ensure profitability for the operators and thus continued maintenance (and hence sustainability), this was not yet proven in practice due to the small number of projects implemented and various delays in the administrative procedures.

Barriers to rural electrification are, among others, low purchasing power of the consumers (implying a need for subsidies if a broad range of people is to be targeted), the small number of qualified enterprises intervening on the rural market, and the incongruity of rural electrification funds and demand. In addition, administrative processes in the rural electrification agency ASER are lengthy and intransparent to potential operators (necessity for capacity building of ASER staff).

Institutional Set Up and Actors in the Energy Sector

Public Institutions and Actors

In 1997 Senegal began a reorganisation of its electricity sector following recommendations by the World Bank. It was decided to privatise the public utility SENELEC, to found the "Agence Sénégalaise d’Electrification Rurale" (ASER – Senegalese Agency for Rural Electrification) and to put in place the "Commission de Régulation du Secteur de l’Electricité" (CRSE – Regulatory Commission for the Electricity Sector).

The Ministry of Energy (Ministère de l’Energie) as the lead agency is in charge of formulating, coordinating, and setting overall objectives, policies, strategies, and general directives for the entire energy sector. Furthermore it is authorized to issue directives to SENELEC. The CRSE is responsible for the distribution and monitoring of concession and licences (except those for rural areas), for the market control (control of competition) and it fixes the end-user prices for electricity. ASER was founded in 2000 and is the governmental agency which is charged with the task of rural electrification. It is financed by the Senegalese government and international donores (such as Worldbank, GTZ, KfW, AfDB, IsDB). ASER tends the concessions for rural areas for private investors and finances 70% of the projects (see Rural Electrification section). Urban electricity supply remained within the responsibility of SENELEC/CRSE.

Non Governmental Service Providers for Rural Areas in the Field of Energy

Commercial Service Providers

During the 1990s, Senegalese companies sold about 2,000 PV systems per year, but the reorganisation of the electricity sector had a negative impact of the nascent Senegalese market for solar energy systems. Only 7 out of 18 solar companies survived the reform. However, 6 new companies have entered the market since 1998, raising the number of solar energy providers to 13. The companies are: SolarSenegal, ....The companies are mainly involved in installation and service for donor-funded systems while the market for unsubsidised systems is very small.

Micro Finance Institutions

• Government

The ministry in charge of micro-finance ist the "Ministére de la Famille,de la Solidarité Nationale, de la Sécurité Alimentaire, de l'Entreprenariat Féminin, de la Micro Finance et de la Petite Enfance".

• Senegal Ecovillage Microfinance Fund

The SEM Fund, or the Senegal Ecovillage Microfinance Fund, is a nonprofit organisation dedicated to poverty alleviation by providing affordable business loans aimed at strengthening the business skills and livelihoods of highly motivated microentrepreneurs that lack access to the commercial banking system.

Policy Framework

Renewable Energy Law

A renewable energy law was signed by president Abdoulaye Wade on Dec, 20 2010 and is currently effective. The law is kept rather general. All details will be determined in by-laws which are currently being elaborated. The text of the law can be found here.

Poverty Reduction Strategy and Energy Policy

Senegegal´s Poverty Reduction Strategy Paper (PRSP) pushes the poverty reduction agenda forward so as to meet the objective of raising economic growth to about 7 percent per year necessary to halve poverty by 2015, in line with the targets set out in the New Partnership for Africa's Development (NEPAD) and the Millennium Development Goals (MDGs).

The PRSP names are ten overall objectives for the development of the energy sector:

1. develop the institutional framework and production capacity for energy
2. promote the engine of productive activities
3. involve private operators, village associations and local authorities in the development of energy infrastructures and services;
4. ensure the financing of activities aimed at developing the energy sector
5. diversify energy sources and technologies
6. promote the control of energy and renewable energy sources
7. create an investment programme for access to energy services aimed at economic and human development
8. provide better and safer public access to domestic fuels
9. enhance access to energy services in rural and suburban areas so as to facilitate the working of basic infrastructures (schools, healthcare facilities, conservation infrastructures, etc.)
10. improve access to oil and gas.

Land ownership and participation

1994: 33.4% 2002: 32.7% Agricultural population

National Energy Sector Development Strategy

The Lettre de Politique de Développement du Secteur de l’énergie (LPDSE) was approved in 2008 to cope with the fundamental problems of the energy sector. There are six main objetives:

1. Development and usage of domestic energy resources, particularly biofuels and renewable energies.
2. Diversification of energy sources for power generation: increase use of coal, biofuels, biomass (especially biomass produced in sustainable, participative forest management systems)
3. Increase share of hydropower through the participation in regional cooperation projects such as OMVG, OMVS and WAPP
4. Security in supply of oil products by building own refineries and close cooperation with oil producing countries.
5. Increasing the electricity supply in rural areas especially pro social and productive uses
6. Reducing the energy demand and increasing the energy efficiency

National Household Fuels Subsector Development Strategy

The Lettre de Politique de développement du sous-secteur des combustibles domestiques (LPDSCD) was also approved in 2008 and aims at

1. the management of the supply side through participative forest management systems
2. the management of the demand side through the dissemination of improved stoves, gas-stoves and alternative energy sources such as kerosene, biomass-briquettes and gelfuel among others.
3. the improvement of the institutional and fiscal framework
4. the dissemination of modern energy sources in rural areas (particularly for rural electrification issues).

Climate Change

Senegal already has some key adaptation elements in place. The country has a national contingency plan that includes studies of natural disasters such as flooding, and of the areas where disasters might occur. Maps showing projected cloud cover and wind speeds are available. Biomass consumption is also being tackled with substantial research on biomass issues and promotion of improved woodstoves.

Flooding of thermal plants is a real vulnerability that will need to be addressed. Already one plant has suffered severe damage from heavy rains.

Key Problems Hampering Access to Modern Energy Services in Rural Areas

Obstacles for Grid Based Rural Electrification

• Even though the concessionaires will soon start their rural electrification activities, they will only reach a small part of the rural population. Following ASER's current strategy, almost all villages that are not located in vicinity of medium tension power supply lines will not be supplied with electricity within the next 10 to 15 years. In the concession zones of KfW (German implementing agency for financial cooperation) in the Peanut Basin and the Casamance, for example, about 1 million people in 2,600 villages will not be connected to the grid.
• administrative processes in the rural electrification agency ASER are lengthy and intransparent to potential operators (necessity for capacity building of ASER staff).
• Although in principle the two concession models of ASER (large-scale concessions (PPER) and concessions based on local initiative (ERIL)), in conjunction with the tariffs set by the regulatory authority, ensure profitability for operators and thus continued maintenance (and hence sustainability), this was not yet proven in practice due to the small number of projects implemented and various delays in the administrative procedures.

Obstacles for Off Grid Energy Technologies and Services

• low purchasing power of the consumers (implying a need for subsidies if a broad range of people is to be targeted)
• small number of qualified enterprises intervening on the rural market
• incongruity of rural electrification funds and demand
• bureaucratic barriers

Further Information

EnDev Senegal