Promotion of a climate-friendly interconnected power system in West Africa

Project description

Title: Promotion of a climate-friendly interconnected power system in West Africa
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Countries: ECOWAS member states: Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo
Lead executing agency: ECOWAS Commission
Overall term: 2013 to 2017

Context

The lack of an electricity supply at affordable prices is hindering the economic development of the ECOWAS region, which is home to more than 300 million people in West Africa. As demand significantly exceeds supply, the power supply is unreliable. Less than half of the population has any access to electricity at all. This is having an adverse impact on economic and social development. The huge power gap caused by economic growth and undersupply must be closed as cost-effectively and sustainably as possible. At the same time, the region has considerable energy resources, although these are very unevenly distributed and insufficiently exploited. With the exception of large-scale hydropower stations, little use has been made so far of renewable energies in particular.

In order to overcome the supply gap while making better use of energy resources, the West African Power Pool (WAPP) was set up in 1999. In 2009, another regional organisation was created – the ECOWAS Regional Centre for Renewable Energy and Energy Efficiency (ECREEE). Its mandate is to promote greater use of renewables and to enhance energy efficiency. Another important institution in this context is the ECOWAS Regional Electricity Regulatory Authority (ERERA). Founded in 2008, its objective is to ensure the regulation of cross-border trade in electricity across the ECOWAS region.

Key conditions have yet to be met in all three areas of the power pool – generation, transmission and distribution – to ensure a sustainable electricity market for West Africa. The reasons lie above all in the underdeveloped infrastructure and the lack of resources and know-how within the regional institutions. Furthermore, the energy utilities are underfunded. Other constraining factors include the limited experience gained so far in implementing renewable energy projects, the low level of interaction between the member states and the lack of support through national policies.

Objective

Key conditions for a climate-friendly interconnected power system have been created in the ECOWAS region.

Approach

The project adopts a regional approach, working with the regional institutions of ECOWAS (WAPP, ECREEE and ERERA) to disseminate strategies for the sustainable generation and use of electricity across the member states. Furthermore, the project aims to improve the framework for establishing a regional power system and combines practical experience with the development of suitable policies and instruments. It proceeds on a demand-oriented basis and supports both regional activities and individual national ministries and energy utilities. The main focus of the project is on improving conditions for the sustainable commercialisation of electricity at regional level. To do so, it works in the following areas:

  • Electricity generation: The project is advising ECREEE on improving the conditions to promote grid-connected renewable energies. It is also supporting ECREEE in setting up an advisory centre to promote sustainable energy supply for the ECOWAS member states. It provides advice to selected national partners on implementing national action plans for renewable energies and support policies and instruments. Experience with lighthouse projects in the ECOWAS region is identified and documented.
  • Electricity transmission: The project is advising the WAPP Secretariat in setting up a regional information and coordination centre and five subregional control centres. In particular, it is carrying out targeted capacity development measures to empower staff to steer the regional electricity market and manage finances. It is providing advice to ERERA on creating important instruments to regulate the regional electricity market, for example on designing contracts for procuring electricity and using the transmission networks, and on methods of determining rates for use of the regional transmission network.
  • Electricity distribution: In consultation with the WAPP Secretariat, the project is assisting selected energy utilities in developing solutions to reduce their distribution losses. The measures developed are implemented on a pilot basis. The project documents successful approaches, disseminates them to the WAPP members through regional channels and draws them to the attention of policy-makers and the financial sector.
  • Organisational and human resources development: Activities focus on institution building at the regional centres of excellence for training personnel from the energy utilities. Based on their specific training needs, market-based, regionally certified continuing professional development courses are to be developed. The aim is for them to eventually cover their costs and to facilitate regional exchange. The customised courses are designed with a view to long-term human capacity development for the energy utilities.

The project supplements contributions by KfW Development Bank used to fund power generation and transmission infrastructure to develop WAPP. It harmonises its activities closely with bilateral and global projects, particularly in Nigeria, Ghana, Senegal and Benin. There is also close cooperation between the project and the European Union, the United States Agency for International Development (USAID), the World Bank and other donors.

Results

The project addresses key development problems among energy utilities and consumers both directly and indirectly. It helps reduce the distribution losses of the energy utilities and extend the regional training available for their personnel. The project's contribution towards improving general conditions is also leading to greater investment in renewable energy projects. In the medium term, consumers will benefit from a more reliable and more affordable energy supply.

As a result of better conditions for generating electricity using renewable energies combined with support for project developers, more energy projects can be realised. This helps build human and institutional resources and capacity and encourages third parties to adopt successful approaches.

In order to develop solutions that are viable for all parties, various interest groups are involved in the efforts to improve the legal and regulatory framework for renewable energies. The project thus supports participatory development and good governance.