Increasing Electricity Supply for Development in Selected ECOWAS member States


Project Report, 2018
24 Pages

Free online reading

Table of Contents

EXECUTIVE SUMMARY

1. INTRODUCTION

2. WEST AFRICA ENERGY OUTLOOK
2.1 Electricity Supply vs Demand in ECOWAS
2.2 Current Challenges:
2.2.1. Electricity Gap
2.2.2 Distribution Value Chain
2.3. Impact of Electricity supply on Economic growth
2.3.1 Case Study: Job creation through rehabilitation of the grid in Mozambique

3. OPTIONS AND SOLUTIONS FOR ECOWAS MEMBER STATES
3.1 Independent Power Producers
3.2. West African Gas Pipeline
3.2.1. Objective
3.2.2. Challenges
3.2.3. Regional Development in Gas Sector
3.2.4. Opportunity
3.2.5. Commercial Viability
3.3 West African Solar Corridor
3.4 ECOWAS – ECREEE MINI GRID INITIATIVE
3.5 Distributed Energy Sources - Case Study Côte d’Ivoire

4. CONCLUSION AND RECOMMENDATIONS

BIBLIOGRAPHY

Acknowledgement

Firstly, I would like to express my sincere gratitude to the Coordinator of the ECOWAS Community Development Program Dr Guevera A. YAO for the continuous support of my study and related research, for his patience, motivation, and immense provision of knowledge. His guidance was impeccable throughout the duration of my research and completion of this research paper. I could not have imagined having a better advisor and mentor for this study.

Moreover, I would like to thank Dr. Simeon Koffi and Dr Kolawole Wumi for their insightful comments and encouragement, but also for the challenging questions asked which incented me to widen my research from various perspectives.

My sincere thanks also go to Dr. Abdoulaye Zonon and Mr Akpa Joseph Djedjero who provided me with an opportunity to join their team, gave me access to regional data basis as well as research facilities. Without their precious support, it would not have been possible to conduct this research.

Last but not the least, I would like to thank my family: in particular my mother and my sister for supporting me spiritually throughout writing this research work and my life in general.

Table of Figures

Figure 1: Relationship between electricity consumption and GDP

Figure 2: Status of Power Supply in ECOWAS

Figure 3: Power Supply in ECOWAS

Figure 4: Capacity Utilisation

Table 1: Electricity Supply, Demand, Gap 2016 in ECOWAS Member States.

Table 2: Electricity Access in Africa 2013

Table 3: Rural and Urban Population electrification statistics

Table 4: Total exports: Anare/Direcion Generale des Douanes – Customs.

EXECUTIVE SUMMARY

The privatized electricity firms also referred to as IPP’s may have been freed of the state influence that previously made their operations difficult, but these utilities still encounter structural problems that continue to halt growth in the power sector. These include lack of gas, rising debt of unpaid electricity bills and the country's outdated poorly maintained transmission network (Odedairo, B.2013).

Many of the new power operators have struggled to make advances, especially as they have had to contend with obsolete facilities requiring substantial investments to upgrade and expand.

This paper aims to illustrate the importance of access to sustainable electricity supply in the ECOWAS region and on how to close the current electricity gap through a 3-way solution; mainly the increase in fossil power generation, renewable energy generation through Solar PV and the increased use of Off-Grid Power systems to provide the rural population with electricity.

This proposed project for increase of renewable energy in West Africa is referred to as “West African Solar Corridor”: And the Natural Gas project for increasing power generation in West Africa is called West African Gas Pipeline (WAGPC), endorsed by ECOWAS.

The paper will firstly consider the reasons for the widening gap between supply and demand of electricity in Nigeria and the ECOWAS region. Thereafter, the potentials and opportunities in solar and natural gas for increasing power supply in West Africa will be analysed. It should be noted that the data for the West African Pipeline is limited.

The study suggests that the investment in new and improved methods for the generation of electricity is a necessity to ensure sustainability in supply and also eliminate the electricity gap permanently which will result in the overall furtherance in environmental, economic and social aspects. ECOWAS, therefore, provides for solutions that introduce renewable energy solutions to overcome current challenges in off peak generation and Natural Gas for Base Load generation of electricity to stabilise electricity supply so the demand can be met.

1. INTRODUCTION

The West African region lacks consistent power supply to the rising demand resulting in an electricity gap which is yet to be tackled. On one hand, centralised systems have remained limited in challenging the deficit, on the other IPPs have been emerging to complement existing power installations. However, given the seen challenges it is crucial to consider other avenues that can assist in tackling the problem that come with the electricity gap. A solid solution presents the still poorly exploited option of incorporating renewable energy sources and the increase of the use of Natural Gas for electricity generation in the region.

An electricity gap refers to the gap between current energy use and optimal energy use. Different contribution factors can be noted such as the loss of electricity (generation transmission distribution), insufficient usage of electricity due to poor and obsolete infrastructure and the rise in population.

Over the past two decades, the power sector worldwide has made a dramatic change in terms of its input fuels, drastic increases in efficiency and the introduction of renewables to the energy mix. One thing has not changed much, centralized power plants still provide the biggest share of electricity in most industrialized nations and emerging economies like Nigeria. At the same time, this centralization has led to many insufficiencies of the power grid: large amounts of electricity are lost during transmission, reliability is not guaranteed and fossil fuels like coal, nuclear power have fallen into disrepute due to their negative impact on the environment (Oladele-Emmanuel, B. D.2013).

The evident lack of power infrastructure prevents growth in the West African region and presents an issue that requires addressing as member states experience power scarcity which lead to expensive short- term solutions. The dilemma that occurs as a result is the following: no security of supply, no sustainable solutions, no cost-effective solutions.

The general objective of this paper is to analyze the potentials and opportunities in solar and natural gas for increase of power generation in the ECOWAS region. In terms of the specific objectives, the paper analyses the opportunities of utility scale solar generation and assesses the need for increase of natural gas from Nigeria to meet the electricity demand in the region.

The document will firstly present an outlook on how the energy sector is being managed in the West African region, which will include the supply/ demand scarcity and its challenges involved. Thereafter, options and solutions in tackling the challenges will be looked at. These suggest steps that can be taken by the ECOWAS member states by laying out the objectives of the anticipated projects and opportunities that can arise as a result.

2. WEST AFRICA ENERGY OUTLOOK

Correlation between electricity consumption and economic Growth

The graph below shows West Africa’s consumption rates are far below other emerging markets. Average electricity consumption in the ECOWAS region, is 150 kilowatt-hours per capita or below. This is a fraction of consumption rates in Brazil, India, and South Africa see graph below Relationship between electricity consumption and GDP. Countries with a higher electricity consumption like Germany and France have a higher GDP. The hypothesis here is therefore that increased electricity consumption within the region could amount to an increased GDP. The region has the ability to take development of the sector to the next level. Success will propel economic growth of the region and greatly enhance the lives of hundreds of millions of people, as well as potentially create a thriving electricity-supply industry and and hundreds of thousands of employment opportunities, temporary and permanent jobs across various industries. (US Energy Information Administration, 2013)

Figure 1: Relationship between electricity consumption and GDP

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2.1 Electricity Supply vs Demand in ECOWAS

The current supply of electricity of the ECOWAS region is about 15 GW while the demand stands at 24 GW which puts the region short of 9 GW. Challenges such as facilitating non- updated infrastructure contribute to the decline of power transmission and distribution.

The most effective solution to address the problem is a project that has its focus on the investment of infrastructure.

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Table 1: Electricity Supply, Demand, Gap 2016 in ECOWAS Member States

Source: ECOWAS Renewable Energy Policy 2015

ECOWAS which has a population exceeding 340 million, has one of the lowest electricity consumption rates in the world. The chart below summarizes electricity access in the ECOWAS region:

Table 2: Electricity Access in Africa 2013

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Source: IEA, World Energy Outlook 2015

The chart shows that electricity rates in the region vary from below twenty percent in ECOWAS countries such as Sierra Leone, Liberia, Niger, and Burkina Faso, to high electrification rates with more than 50 percent in Senegal and more than 70 percent in Ghana and Cote d’Ivoire.

Although Nigeria has the largest economy in Africa with a population of close to 200 million people over 96 million of its citizen still has no access to electricity.

Considering the ECOWAS region as a whole, only 19 percent of the rural population has access to electricity.

It must be noted that Ghana, Cote d’Ivoire, and Nigeria account for almost 80 percent of electricity generated and consumed in the region. The graph below provides further insights into the relationship between the demand and supply of electricity in the region.

Figure 2: Status of Power Supply in ECOWAS

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Source: ECOWAS Energy Efficiency Policy, 2015

As evident the demand and supply of power is still not sufficient, as up to 46 percent are yet to be met. The energy mix in the ECOWAS region highlights the high dependency on fossil fuels, with oil and gas accounting for a large portion of the total generation capacity, especially in the oil-rich Niger delta region. There have been increases in the installation of thermal capacity since the beginning of the 1990s. While renewable energy sources like hydroelectricity only account for 20 percent of the total installed capacity, it provides a larger percentage of the actual generation, as revealed below.

Figure 3: Power Supply in ECOWAS

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Source: IEA, World Energy Outlook 2015

The high share in energy mix has resulted in electricity becoming costly and as a result less affordable for people. By 2012, the grid-based capacity in the area was only estimated to be about 20,000 MW.

2.2 Current Challenges:

2.2.1. Electricity Gap

The ECOWAS member states face a multi-dimensional problem in its power sector which is why the gap is widening faster than it can generate power for the following reasons:

The region is meeting a fourfold increase of demand. West Africa will consume nearly 600 terawatt hours by 2040, four times what was used in 2010. That forecast is based on a number of important factors, including a fivefold increase in GDP, a doubling of population, electricity-access levels reaching more than 70 percent by 2040, and increased urbanization.

- There is a mismatch between the level of supply and the demand in the regions connected to the respective national grids (Ouedraogo, 2017).
- Lack of access in the off-grid regions. As such, it becomes clear that the closing of the electricity gap in the region is a multidimensional challenge Trotter, McManus, and Maconachie, (2017).

Finding a solution may assist in resolving the energy deficiency problems facing the region.

- Moreover, significant energy access inequalities exist between urban and rural areas. Whereas urban areas tend to use energy in the form of electricity, charcoal, kerosene and other fuels, rural areas continue to rely on largely traditional biomass for meeting their energy requirements for cooking and lighting. Household access to electricity across the region varies considerably between urban and rural areas. Urban electrification rate in the region averages around 67 percent (with countries like Ghana and Cameroon on the higher end with over 90 percent urban electrification and countries such as Chad and Central African Republic on the lower end with less than 15 percent). Rural electrification rate averages around 33 percent (with six countries – Chad, Central African Republic, Liberia, Mali, Niger and Sierra Leone with less than 5 percent rural population electrified). A complete statistic on the rural/urban population split, electrification rates and absolute populations in the rural and urban areas of the broader western African region including the Sahel, are provided in Table 1 below (ECOWAS Renewable Energy Policy (EREP), 2016).

Table 3: Rural and Urban Population electrification statistics

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2.2.2 Distribution Value Chain

Distribution Companies are faced with great operational challenges, which are clearly visible in their operations and service delivery within the region. Some of the challenges include a lack of sufficient energy supply from grid; old, obsolete networks; lack of maintenance of network equipment; poorly trained manpower; poor customer data; low meter penetration; health, safety and environmental issues; and a near absence of investments due to poor revenues, inadequate tariffs and external funding constraints. These challenges could be summarised into the following broad categories:

Grid energy insufficiency and instability;

Network infrastructure challenges (overloaded transformers and feeders, obsolete equipment, limited network, lack of automation, etc);

Tariff challenges and revenue shortfalls (non-cost reflective tariffs, low collection efficiency, etc.);

Metering challenges (huge metering gap, estimated billing, poor meter maintenance, etc.);

Operational challenges (long feeders, quality of workforce, large operational areas, etc.);

Energy theft

Funding challenges (absence of long term “patient” capital (equity/debt) to fund capex investment, high cost of borrowing, poor credit history of Discos, etc).

Arising from the above summary of the challenges, a solution underpinning these challenges is the increase of revenue and funding. Without funding or improving the revenue profile of Distribution Companies, there is a certainty that these operational challenges would continue to subsist. The proposed way forward deals largely with addressing the tariff, revenue and funding challenges Distribution Companies experience.

2.3. Impact of Electricity supply on Economic growth

There is a direct correlation between economic growth and electricity supply.

If ECOWAS is to fulfil its promise, it needs power to sustain it. West Africa is starved for electricity. The region’s power sector is significantly underdeveloped, whether we look at energy access, installed capacity, or overall consumption. The fact that West Africa’s residential and industrial sectors suffer electricity shortages means that countries struggle to sustain GDP growth.

Indeed, fulfilling the economic and social promise of the region, and Africa in general, depends on the ability of public and private sector to develop and harness the regions energy potential.

The region experiences a rather low per-capita demand for power; it is estimated that the capita demand in the ECOWAS region will rise from 153 kWh to 235 kWh by 2020. While it may seem to be a significant increase of almost fifty percent, it is in reality low, when considering that the global per-capita demand is 2,730 kWh. As such, it becomes clear that both the supply and the demand of electricity in the ECOWAS region remains limited (Ouedraogo, 2013).

Electricity consumption and economic development are closely linked; growth will not happen without reliable power supply among residential and most importantly industrial consumers. From an electricity-access point of view, West Africa’s situation is the world’s worst. It has 5% percent of the world’s population, but 65% percent of the share of the population has no access to electricity of which 77% live in rural areas. This means that more than 225 million people in West Africa lack access to electricity out of the 640 million people in Sub Saharan Africa. Only seven countries—Cameroon, Côte d’Ivoire, Gabon, Ghana, Namibia, Senegal and South Africa—have electricity access rates exceeding 50 percent. The rest of the region has an average grid access rate of just 20 percent. Even if access to electricity becomes available, mostly not constant and interrupted.

2.3.1 Case Study: Job creation through rehabilitation of the grid in Mozambique

Mozambique is one of the least developed countries in the world with a low electrification rate. The inadequate electricity supply poses a significant development bottleneck. KfW has provided a financing of EUR 18 million for two projects related to grid rehabilitation in Mozambique which have in the meantime been completed. The first one comprised the renovation of a 200 km long 110 kV power transmission line, which transports electricity from a hydropower plant from the provincial capital of Nampula to the port town of Nacala. The second project was aimed at rehabilitating the medium-voltage and low-voltage grids in Nampula and Nacala. This also included transformer equipment and 19,000 consumer connections. Both measures were aimed at providing access to a reliable energy supply in the cities of Nampula and Nacala in order to contribute to commercial and industrial development. That the projects were able to achieve these objectives is evident in the Ex-post evaluation 2010: As an indicator for economic growth in the region, electricity demand from households and commercial electricity customers grew by over 20 % in both cities in the time period between project completion and evaluation. (UNDP, 2012)

In the last few years manufacturing industries, cement factories, dry docks and service providers have established themselves in the framework of a "special economic zone" in Nacala. The facilities currently under construction have alone led to the creation of 5,000 jobs. The mining industry and commercial agriculture in the province have also benefitted. Likewise manufacturing companies have established themselves in the province of Nampula; also of note is the expansion of the deepwater port. These growth and employment effects would not have been possible without the improved energy supply. (UNDP, 2012)

3. OPTIONS AND SOLUTIONS FOR ECOWAS MEMBER STATES

3.1 Independent Power Producers

The underperformance of the power sector in sub-Saharan Africa has resulted in countries attempting to unburden their electricity utility allowing participation by independent power producers (IPPs).

The IPPs are entities that generate and then sell electricity to end users and utility companies. Such entities can either be public or private, with 18 countries in sub-Saharan Africa having them. By 2014, the IPPs had the cumulative capacity of 6.8 GW. A great success story in the use of IPPs is Cote d’Ivoire. The use of IPP in the country resulted in increased consumption rates in the country. As shown in the graph below:

Table 4: Total exports: Anare/ Direcion Generale des Douanes - Customs

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The country’s independent power Producers have ensured that a majority of its urban population has uninterrupted electricity. In fact, the supply has increased to the extent that it began to outstrip the demand, providing a peculiar opportunity for Cote d’Ivoire exporting electricity to its neighbouring countries Burkina Faso, Liberia, and Sierra Leone (Traoré, 2013).

3.2. West African Gas Pipeline

The West African Gas Pipeline (WAGP) is a 421-mile long regional high-pressure gas transmission system, built to export Niger Delta gas from the Lagos Beach terminal in Nigeria to Ghana, via Benin and Togo. It is the first pipeline to be installed in sub-Saharan Africa. And is also one of the largest fossil fuel projects undertaken in Africa.

The pipeline is owned and operated by the West African Gas Pipeline Company (WAGPCo). It is led by Chevron with a working interest of 36.7%. The Nigerian National Petroleum will be the second largest shareholder with a 25% working interest. Shell Overseas Holdings and Takoradi Power respectively has 18% and 16.3% shares in the company. The remaining four percent interest in the project are owned by Societe Togolaise de Gaz (two percent) and Societe BenGaz (two percent).

The pipeline was completed at a cost of $900m, approximately $310m (or 52%) more than the originally estimated cost. It was put into commercial operation in March 2011 and has an initial capacity of 200 million cubic feet of gas a day (mcfd), which is expandable to 600mcfd.

The project already has customers, as Takoradi Power Station in Ghana has already had an agreement that would see it produce more electricity. Projections reveal that the pipeline’s capacity will continue to gradually increase, from 170 MMscf/d in 2017 to 474 MMscf/d b 2026,

As shown in the graph below:

Figure 4: Capacity Utilisation

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Source: ERERA Forum 2012 Bridging the Gap between electricity Supply and Demand in West Africa

3.2.1. Objective

The West African Gas pipeline (WAGP) meant to have three objectives.

1. Encourage Royal Dutch Shell, Chevron and other potential Private Sector Investors to tap into a vast resource that since the onset of oil production in the 1960s has been wasted in the associated gas burning-off process known as flaring.
2. To provide a low-cost source of energy in a region starved of electricity, by connecting Nigeria’s western natural gas fields to neighboring member states such as Benin, Togo Ghana, Côte d’Ivoire and other ECOWAS member states.
3. A byproduct was the novelty of such an infrastructural collaboration – between different states, private companies and multilateral finance institutions – and the victory this represented for ECOWAS regional integration.

3.2.2. Challenges

The first destination, before it crosses the Benin border, is Lagos – a city state that contributes about 12 per cent of Nigeria’s GDP, and whose economy alone is nearly twice as large as that of Ghana by recent estimates. After meeting the demands of Lagos, there is not much left for neighbouring member states. This shows clearly Nigeria’s domestic needs far outstrip natural gas supplies.

This could be changing but the Framework for driving the multibillion-dollar investments required has yet to be created. Nigeria has among the largest reserves of natural gas in the world, but the state-owned power stations that accounted historically for the bulk of domestic demand were poor customers. When they were able to make payments, they paid fixed low prices, thereby discouraging the investment needed in infrastructure and supplies. Private sector companies have injected billions of dollars into power stations and distribution companies over the past couple of years since privatization of the industries generation and distribution companies as part of a program to transfer control of electricity supplies into what the government hopes will be more efficient hands.

3.2.3. Regional Development in Gas Sector

A new generation of power stations built under state ownership, capable of nearly doubling generation capacity by 4,000MW, is due to come on stream. These stations will more than double demand for gas. But industry officials say it could take up to four years for the infrastructure to be in place to provide the necessary increase in gas supply to fire the stations.

3.2.4. Opportunity

IPPs are the most important tool to engage private sector investors in Africa’s energy markets. Following the huge success of the South African Renewable Energy IPP Procurement Programme (REIPPPP), the Gas IPPPP which is a multi-billion international investment program led by the Private Sector. The impact of this programme will be the delivery of 4,000MW of stable power supply as an initial target, but the expansion programme has limitless scale changing and cleaning South Africa’s base load programme.

The IPP model is fast to implement and creates thousands of jobs for young educated population in the region, not only in the construction phase, but in the peripheral post construction phase where the Gas IPP Programme can act as an anchor programme for massive downstream manufacturing investment in the region. The scale of this program on West Africa’s economy will see the region become one of the wealthiest on earth based on the rapidly growing middle income households that will be buying ‘African Made’ white goods, pharmaceuticals and plastic goods.

Additionally, gas is the enabler or broader renewable energy adoption which when combined will mitigate increased use of coal meeting COP22 climate change objectives, further driving investment into the region increasing the capacity in sectors including agriculture, mining, transportation and of course, tourism.

3.2.5. Commercial Viability

For this to be viable it may in some cases require a change of government policy on pricing. Experts in the energy industry describe the lack of gas supply as the biggest problem when it comes to ECOWAS electricity plans. Some of the newer power plants were built without all the necessary factors being in place, most importantly the source of gas. (African Finance Corporation, 2016). The government has made some concessions recently on price. In the past, power stations paid as little as $1 per million British thermal units (Mbtu) for gas – a fraction of US or European prices. With the approval of the regulator, prices can now be as high as $2 or even $2.50 Mbtu. That reform was enough to spur some change. Historically in Nigeria, oil companies did not develop fields thought to contain only gas because of it commercially not being viable. Where the international companies have developed gas supplies it has mostly been for export as LNG (liquefied natural gas).

In 2009, Seven Energy, a local company, bought a Gas field from Shell. The company started supplying gas to a power plant in Akwa Ibom state the Ibom Power Plant in 2013. Seven Energy has been successful in raising international capital. The Singaporean state-owned investment company Temasek, bought a $150m stake in 2014, and the International Finance Corporation, the World Bank’s private-sector arm, injected $105m to make the project bankable. But for some gas-to-power projects to become commercially viable, the Mbtu price would need to nearly double again. There is the debate ongoing on how to pay for infrastructure carrying Natural Gas to much longer distances, for example to stimulate industry in the economically under-developed northern states in Nigeria. The investment required on the gas side is equal to that on the power side (Seven Energy, 2014). For a country so well endowed with natural gas to use more expensive energy like diesel is not cost effective or economically sustainable on the long-term. Nigeria is sitting on huge gas reserves yet it is exporting gas and importing diesel – the most expensive way of generating electricity.

The region’s economies could be growing at 12 per cent and more for a decade if it had a power sector with a reliable gas feedstock according to industry experts. Indigenous companies will have it difficult due to lack of capital to deliver the kind of resources needed to make Natural Gas commercially viable in Nigeria and the ECOWAS region it will have to be a joint effort of an infrastructural collaboration – between different member states, private sector investors and multilateral financial institutions.

3.3 West African Solar Corridor

The rationale of establishing the West African Clean Energy Corridor is that of the regions excellent Solar Energy potential.

Despite the high abundance of Sun, it is not harnessed, with ECOWAS member states having low levels of access to electricity, and per capita consumption in the world (Sanoh, Kocaman, Kocal, Sherpa, and Modi, 2014).

As such, creating the clean energy corridor provides an opportunity for Sub-Saharan countries to fill the growing need for electricity (Saadi, Miketa, and Howells, 2015).

The use of renewable resources is not only cost-effective, and clean, it also provides greater security against fluctuation in the price of the fossil sources of energy. While some may claim that the use of renewable sources will involve higher capital costs, it is also clear that the establishment of the clean energy corridor will have lower operating costs, considering that the source used is free and abundant. Therefore, once the infrastructure is established, the use of the renewable sources would reduce the costs of electricity for consumers in across the region, boosting growth, especially in the manufacturing industries, as factories rely on reliable power supply. The West African Solar Corridor Project is to create a corridor of solar power plants to reduce the energy deficit in the ECOWAS member countries. The project aims in the long term to create the technical, political and institutional environment for the installation of photovoltaic solar power plants with a capacity of 10 GW by 2030, connected to the grid in high-radiation areas and close to the electricity grid transport. For the first phase, the project aims to install solar power stations with a cumulative power of 2 GW by 2020.

Some of the expected results which this project will yield are:

- Contribution to the reduction of the ECOWAS energy deficit;
- Contribution to increased energy exchanges between member countries;
- Contribution to improving the population's access to electricity;
- Diversification of the ECOWAS energy mix;
- Contribution to the socio-economic development of ECOWAS;
- The contribution to the improvement of the living conditions of the people of ECOWAS, in particular by the creation of jobs.

3.4 ECOWAS – ECREEE MINI GRID INITIATIVE

Less than 50% of the West African population have access to electricity. This situation is even direr in rural areas where only 8% have access to electricity throughout the ECOWAS region. There is a big difference in terms of access to electricity between urban and rural areas, within a single country and even between different member states. In six countries (Burkina Faso, Guinea, Liberia, Mali, Niger and Sierra Leone) access to electricity in rural areas is less than 5%, while it exceeds 35% in five other countries (Cap Verde, Côte d'Ivoire, Ghana, Nigeria and Senegal). The ECOWAS/UEMOA White Paper on access to energy services aims to provide electricity access to 36% of the rural population and to 60% of the rural population to live in areas with access to electrified basic social services (Health, education, water supply, public lighting) before 2015. Unfortunately, these objectives have not been achieved to date. The grid extension is often considered as the priority solution for electrification. However, 75% of the population in the region without access to electricity live in rural areas and often far away from the electric grid, and grid extension in the near future remains economically unrealistic. In this scenario, RE mini-grids and decentralized standalone solutions are the most appropriate options for supplying electricity to these rural populations.

The ECOWAS Renewable Energy Policy, developed with the support of the ECOWAS Center for Renewable Energies and Energy Efficiency (ECREEE) and adopted by the Heads of State in July 2013 in Abuja, sets ambitious targets for the share of renewable energy-based mini-grids and individual standalone systems for electricity supply in rural areas of ECOWAS member states in 2020 and 2030:

Project Description and Scope:

The implementation of 60,000 mini grids by 2020 and 128,000 mini-grids in 2030 with a total capacity of 7,680 MWc to serve 104 millions of persons ; 1.8 million Individual systems by 2020 and 4 .8 million by 2030 in order to serve 47 million people.

The project targets 1000 Villages in the 15 ECOWAS member States.

The areas are grouped into four (04) batches:

- Batch 1: Nigeria
- Batch 2: Gambia, Ghana, Liberia, Sierra Leone
- Batch 3: Cabo Verde, Guinea Bissau, Senegal, Mali, Guinea
- Batch 4: Niger, Burkina Faso, Benin, Togo, and Côte d’Ivoire.

Villages are classified into the following categories:

- small: less than 1500 inhabitants;
- Medium: between 1500 and 4000 inhabitants;
- Large: more than 4000 inhabitants.

The project aims for the electrification of new areas through RE mini- power plants and/or hybrid, also individual standalone systems (solar Homes Systems Kits) as well as hybridization of existing mini-grids powered by diesel generators.

3.5 Distributed Energy Sources - Case Study Côte d’Ivoire

It is clear, from the electrification table, that even with increased supply, urban centres will be the ones receiving the boost in electricity, while rural areas, many of which have poor infrastructure, struggle to obtain electric power. However, the deployment of mini grids into the rural areas, through the West African Solar corridor, may be viable solution that will ensure that rural households in West Africa receive electricity. There are several benefits that mini-grids offer over the grid extension. Firstly, the method will ensure that electricity transmission is less costly to the rural households as they are less capital intensive, and thereby easy to obtain financing.

Secondly, electricity will be provided more quickly. Thirdly, the mini-grids may also provide greater power generation, and may even be used to increase the resilience of the existing electrical systems, as they can ensure that customers retain their power, even when the grid suffers interruptions, which is common in Africa. Off-grid solutions, such as those implemented through the successful Lighting Africa Program, work. But we also have to invest in the last mile, or even the last few yards of the electricity supply chain, to connect people to the grid. In many countries in Africa, the "entry ticket" is what holds the poor from getting a legal connection to grid power but it can be done. Take Cote d'Ivoire, for example.

It has an extensive national grid, which means most people live relatively close to an electricity line. At the same time, many households do not have access to energy, or buy electricity illegally to avoid paying a hefty amount upfront for a legal connection. In the past few years, an IDA project (International development Association Project) has supported CIE, a privately-owned operator in the country’s power sector, to carry out a pilot campaign for "social" connections, which essentially subsidized first-time connection charges. That meant households only had to pay $40 to connect to the grid and paid the remaining cost with their bi-monthly bills cost over time. By doing that, the program eliminated the biggest obstacle these families face to get connected to the grid—an exorbitant first-time payment.

The pilot campaign connected 45,000 new households to the grid in less than two years. But to reach even more people, the utility needed to step up. The pilot offered useful lessons to roll out social connections at a massive scale.

Cote d’Ivoire’s new Electricity for All program takes into account lessons from the IDA pilot campaign. It offers households a connection for only $2 upfront and gives them the option of paying back the remainder over a period up to 10 years. The utility also pre-finances in-house wiring to increase affordability for the poorest. CIE has recruited and trained new staff for the access program, grouped into 25 dedicated crews that have customized trucks and equipment required to install new connections efficiently. Electricians have been trained and certified to follow the standards required for electrical wiring in homes. In the meantime, the government has also taken policy measures to address problems encountered in the pilot campaign. For instance, an opaque legal requirement for inspection of in-house wiring by a licensed inspector before the utility is allowed to connect a household has been eliminated. (World Bank IDA, 2015)

4. CONCLUSION AND RECOMMENDATIONS

Most countries in West Africa have issues with both the demand and the supply of electricity. There are numerous challenges that are responsible for problems with financing, affordability (income inequality), insecurity, and reliance on traditional energy sources such as wood etc. However, there are several strategies that ECOWAS member states can emulate, which may assist them to overcome their challenges. Member states can maximize the use of fossil fuel for power generation, which is already ongoing, considering the support provided for the West African Gas pipeline and the recent approval of extension to Cote d’Ivoire. Governments have to maximize the use of their renewable energy potential in particular its abundant Solar Energy potential by harnessing initiatives like the Clean Energy Solar Corridor. Independent Power Producers should be encouraged to operate, as their presence may even result in higher supply, and even export of electricity, as seen in Cote d’Ivoire.

In terms of recommendations, it is suggested that Power utilities should recover their costs of supplying electricity, while making it affordable to the people, thereby increasing penetration. It will be important to first streamline the existing electric grids existing in the different member states by ensuring that the utilities minimize commercial, and technical electric power system losses resulting from transmission losses, tempering of meters etc, which is common especially in urban areas. Maximization of electricity bill collection should be prioritized. Doing so will ensure that power stations have the resources they need to maintain their stations, and reduction of frequent power outages due to good power infrastructure. Governments should subsidize the initial costs of connection to either the grid, or mini-grid networks for a period of time, taking away the burden of people getting electricity installed which will discourage consumers of illegally connecting to the grid, tempering of meters or not wanting to be connected to the grid at all.

If sustainable Power Generation is to be achieved in the coming years, five crucial pillars must be built, namely:

Pillar 1. Efficiency on Power generation, Transmission and Distribution and appropriate policies must be adopted
Pillar 2. Effective policies to control population growth and to slow rural-to-urban migration must be adopted;
Pillar 3. Resources must be committed to development of rural infrastructure in Energy Generation such as Off Grid Power Systems
Pillar 4. Measures must be developed to manage natural resources and to prevent environmental degradation
Pillar 5. appropriate measures (including political will and political commitment) must be firmly taken for regional economic cooperation and integration to achieve the 2020,2025 and 2030 goals on Power generation in the region.

Power utilities recover their costs of supplying electricity, while making it affordable to the people, thereby increasing penetration. It will be important to first streamline the existing electric grids existing in the different member states by ensuring that the utilities minimize commercial, and technical electric power system losses resulting from transmission losses, tempering of meters etc., which is common especially in urban areas. Maximization of electricity bill collection should be prioritized. Doing so will ensure that power stations have the resources they need to maintain their stations, and reduction of frequent power outages due to good power infrastructure. Governments should subsidize the initial costs of connection to either the grid, or mini-grid networks for a period of time, taking away the burden of people getting electricity installed which will discourage consumers of illegally connecting to the grid, tempering of meters or not wanting to be connected to the grid at all.

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Title
Increasing Electricity Supply for Development in Selected ECOWAS member States
Author
Year
2018
Pages
24
Catalog Number
V441756
ISBN (Book)
9783668839038
Language
English
Tags
increasing, electricity, supply, development, selected, ecowas, states
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Christian Elemele (Author), 2018, Increasing Electricity Supply for Development in Selected ECOWAS member States, Munich, GRIN Verlag, https://www.grin.com/document/441756

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