Generally, West Africa is endowed with natural resources and has a high energy potential, however, installed capacity is around 10,640 MW of which only around 60% (6,500 MW) is fully functional to meet demand. It is therefore not surprising to a high section of the economy that is unserved with electricity and continue to use biomass or thermal generators. According to the AfDB (2011), total demand is growing, reinforced by an increasing rate of population and urbanisation, assessed to be about 22,000MW, far more than the actual generating capacity. This supply and demand gap is exacerbated by high commercial and technical losses estimated at 21.5% in West Africa in 2010 (ECREEE, 2014).
Figure 2.20: Transmission and Distribution Losses and Loss Rates of Sub-Saharan Countries in 2012
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Figure 2.21: Electricity Access Rates of West African Countries in 2011
Source: ECREEE (2014)
Figure 2.22: Electricity Prices for Medium Voltage Users of West Africa
Source: Understanding ECOWAS Energy Policy ((Karaki, 2017))
Most West African countries rely heavily on thermal power and obsolete power plants, which means that electricity costs in West Africa are among the highest in the world. An average of 17.9 Cents per KWh is higher than that of South East Asia and other parts of the world dominated by developing countries. High prices, low electricity access rates, unreliable supply of cheaper energy sources (natural gas), and climate change effect on relatively cheaper hydro power plants and high technical and commercial inefficiency have led to nearly 173 million of the West African population without access to electricity. (Refer to figure 2.23 below)
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Figure 2.23: Share of ECOWAS Population without Access to Electricity
Source: ECREE (2014)
The electricity generation and distribution facilities in countries like Liberia and Sierra Leone were seriously damaged during recent military conflicts and construction has been disrupted. They are still seeking opportunities to rebuild their infrastructures with the help of the international community. Other countries in the ECOWAS region are without coastal access, such as Mali, Burkina Faso and Niger, which do not possess important energy resources and are likely to be dependent on electricity imports; and small countries of the coastal region (Benin and Togo) which already have established an integration of their bulk electricity supply that can serve as an antecedent to an integrated regional approach. Cote D’Ivoire, Senegal and Guinea have significant electricity resources and are contributing to the WAPP or have the potential to do so.
La Cote D’Ivoire has high prospects of natural gas and so about 75% of the country’s electricity plants are fuelled with natural gas. Senegal, unfortunately relies on crude oil while Guinea has hydro power that is extremely underutilised or underexploited. There is significant progress in La Cote D’Ivoire’s electricity market with increasing generating capacity and improved regulation. The country was the first in sub-Saharan Africa to turn to the private sector to expand its electricity generation capacity when the government, after opening up electricity production to competition, established Compagnie Ivoirienne de l’Électricité (CIE) in 1990 and granting it a concession covering the purchase, transmission and distribution of electricity. A second restructuring phase launched in 1998 was mainly geared towards the financial stability
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or enhancement of profitability in the ESI of Cote d’Ivoire– this time primarily focused on making the sector more profitable. A last reform was launched in 2011, when the state-owned company Société des Énergies de Côte d’Ivoire (CI-ENERGIES) was created to plan and manage investments in the power sector. Hitherto, the production of power was open to the private sector, but the transmission, distribution, import and export activities of electricity remained a State monopoly as per the Electricity Law of 1985.
The current authority in charge of regulating the electricity sector is the Autorité Nationale de Régulation du Secteur de l’Electricité (“ANARE”). The Electricity Code gives greater independence and authority to the ANARE by specifically providing that the regulatory authority is an independent legal entity with financial autonomy. The authority is in charge of overseeing the compliance with the laws, regulations and obligations under authorizations and conventions in force in the electricity sector; proposing electricity tariffs to the State as well as the tariffs to access the national grid; protecting users and consumers of the public services and as well as their rights; arbitrating disputes between operators or between operators and the State; and advising and assisting State in regulating the electricity sector. The Code addresses matters relating to contract terms and tariffing both in their quest to creating an industry that has reasonable technical and commercial losses and affordable prices.
Togo and Benin have a slightly complex electricity market built out of collaborations and partnerships with agents within and out of each of the countries. The VRA of Ghana, CIE of La Cote d’Ivoire and TCN of Nigeria are the major suppliers of electricity to Togo and Benin. In Togo, however with the funding aid from the IFC there has been an established IPP. Contour Global is an independent power producer which was established in 2010 with a 25 year concession arrangement. CEB (Communauté Electrique du Benin) is responsible for purchasing and selling power to the distribution companies of these two countries. The CEB delivers power to Benin’s distribution company, the Société Béninoise d'Energie Electrique (SBEE), Togo’s distribution company, the Compagnie d’Energie Electrique du Togo (CEET), and to large industrial customers. In Togo, the CEET (Compagnie d’Energie Electrique du Togo) which is the distribution company with some in-house generators distribute electricity to the lowly grid-connected urban and peri-urban areas (about 30% electrification rate on the
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average). Rural electrification is extremely low at 5%. The Electricity supply industry is seen in the figure below.
Figure 2.24: How the Electricity Supply Industry in Togo and Benin is Organised
Source: SOFRECO ( 2010)
Regulation of the market is overseen by Ministry of Energy and a special set up called ARSE (Autorité de Réglementation du Secteur Electricité) set up in 2000 to advise the energy ministry on definition and implementation of subsector regulations and tariff proposals and decisions. Aside, advising on procurement activities it manages potential conflicts with concessionaire and consumers. However, given that CEB operates under a special code (Code Benino-Togolais of Electricity), ARSE’s supervision does not extend to it. The existing national regulations are not explicit with tariff setting and there is no well-defined methodology. Low access to electricity in rural areas and the lack of promotion of renewable energies in order to bridge the demand and supply gap requires specific policy and requisite plans. End use prices are still very high in the range of 19- 21 US cents while technical and commercial losses are reported in excess of 24%.
The deliberation and the facts presented in the sections above suggest that the West African region has as yet to have an efficient electricity industry. Also, owing to the different strengths of the various member countries regarding energy resources, the ECOWAS commission is pursuing a regional energy integration agenda endorsed by an energy protocol in 2003. In the next section, the objectives, plans, regulation and possible limitations of the agenda are discussed.
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