Dakar event reveals untapped potential for solar power in West Africa
During two fully packed days this week developers, financiers, government officials and other key stakeholders met at the Pullman Hotel in Dakar, Senegal to learn about and discuss "Competitive Solar Solutions West Africa". The Solarplaza-organised event was supported by key institutions like the World Bank and its affiliate IFC, the national Development funds Proparco, DEG, FMO as well as the regional Africa institutions like ECREEE, Ecowas Centre for Renewable Energy and Efficiency. A number of companies like Scatec Solar that I represent also co-sponsored the conference.
The event was not only useful for participants; it also revealed some insights of interest to a broader public. Below are some highlights that I noted:
Fossil power generation expensive
The countries in the region – Senegal, Mali, Burkina Faso, Ghana, a.o. – typically spend hundreds of millions of dollars on importing diesel and fuel oil for electricity generation. This despite the fact that on average only half the region's 300 million population have access to electricity.
Although hydropower traditionally plays a major part in the energy mix, it cannot catch up with demand that grows by 5-10 % per year. The avarage generation cost of diesel in the region is around 300 CFA (0.64$) per kilowatthour, and 150-200 CFA (0.3-0.4$) for power generated from Heavy Fuel Oil (HFO), it was said. The price of fuel and diesel has increased more than 100 % the last decade, and is expected to continue to rise. In 2013, the procurement of fuels represented more than 60 % of Senelec’s total said Mamadou Sene of SenRe Africa.
As the electricity tariffs are regulated, end-users in West Africa typically pay only about 50 % of what it costs to produce electricity by fuel or diesel. This means the national electricity companies are all struggling to survive financially and taxpayers have to cover the growing deficits with rescue financing from the state. Only in Senegal, this subsidy of Senelec’s fossil power generation costs the public purse between 160 and 200 million dollar a year.