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Development of a Tariff Structure for Renewable Energy

Development of a Tariff Structure for Renewable Energy

State 

completed

Date 

1 December, 2012 to 3 April, 2014

Country 

Senegal

Region 

West Africa

Summary

This type of activity was part of the RECP start-up phase and is now being offered under the Service Line SEADS.

The development of the energy sector and energy infrastructure represents a key component of the Senegalese Government‘s strategy to support economic development. Electricity, in Senegal, is seen as a fundamental element for economic growth. Its price, its reliability, and the quality of service affect most economic activities directly or indirectly. The total installed generation capacity (2009) is 596,1MW with almost 90% of the electricity generated with diesel, heavy fuel oil, or kerosene.

The government of Senegal established a vision for the electricity sector to have “electric power that is available in both quantity and quality, that is competitive and produced from a diversity of technologies including coal, gas, hydropower, wind power, and solar power”. (Ministry of Energy, October 2012)

Under the Africa-EU Renewable Energy Cooperation Programme (RECP), the EUEI PDF was approached by the Government of the Republic of Senegal to assist with the implementation of the Senegalese Renewable Energy Law, adopted by the Senegalese parliament under Act 2010-21 in December 2010. The project was a follow-on from the technical assistance received from the AFD in 2010 and from the recommendations of the International Renewable Energy Agency (IRENA)’s Renewables Readiness Assessment for Senegal, carried out in 2011/12. The activities comprise the provision of:

  • energy scenarios highlighting the potential contribution of renewable energy to the energy mix under different circumstances
  • an appropriate renewable energy tariff structure and calculation of tariff levels for independent power producers and auto-producers
  • enhanced capacity at the regulator CRSE for future iteration of scenarios and assessment, monitoring and adaptation of appropriate tariff schemes for renewable energy
  • model Power Purchase Agreement(s) (PPA)
  • enhanced capacity to undertake calls for tenders specified in the Renewable Energy Law

A scenario workshop took place in September 2013, followed by a first set of trainings at the end of November which was attended by officials from the Ministry of Energy, the regulatory commission and the state utility. The last training and final workshop took place in February 2014.

The renewable energy law and its implementation process is now more widely accepted than before the project, thanks to the platform for information and debate provided by the EUEI PDF workshops. The involvement of a wide array of stakeholders, especially the private sector, in the implementation process contributed to decreasing resistance and increasing the trust in the renewable energy legislation. The Ministry of Energy has approved the formation of an “ad-hoc” group to coordinate the implementation of the first tender in Senegal for a 50MW solar PV plant in July 2015. Furthermore, the national utility SENELEC is in the process of contracting a number of strategic studies that will inform a strategy to integrate renewable energy into the grid.

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