ENERGY MIX IN SENEGAL WHICH ONE TO CHOOSE? General Directorate APUA CONGRESS. LUANDA 2014 Safiétou DIALLO Technical Adviser

CONTENT  INTRODUCTION/OPENING TO THE PRIVATE SECTOR  ASSESSMENT: 1 st FIRST GENERATION OF IPP-GTI AND KOUNOUNE  GAS PRICE RISE: 2 ND GENERATION OF IPP GTI  MIX FROM BILATERAL COOPERATION WITH MAURITANIA  MIX FROM SOUTH-SOUTH REGIONAL OMVS PROJECTS  WAPP PERSPECTIVES  WHY INVEST IN SENEGAL?

INTRODUCTION The Energy Sector is a major support to economic development. and to social and regional inequalities reduction. The Emergence Strategy reflects the ambition of Senegal to ensure broad and reliable access to cheap energy. Thus. the ESP has the following objectives:  offer one of the lowest electricity prices in the sub-region (~ CFAF/kWh) to support economic competitiveness;  halve the electricity bill of households;  eliminate power outage and related losses by  increase electrification rate from 25 to 60% in the short-term.

INTRODUCTION According to the PPDPS reviving the integrated plan of the power sub-sector also goes through:  readjusting supply and demand with the operation of new production capacities (1000 MW);  diversifying power generation sources to rebalance the energy mix. with options to expand production based on coal. gas. hydropower. solar and wind power;  reducing the amount of oil products in the mix from 91% to 45%  Reaching a target of 20% for renewable energies in 2017  upgrading and developing the transmission and distribution network : strengthening and securing lines. network expansion  restructuring the power sector by encouraging and sustaining the intervention of private operators and investors in the development of private generation units

INTRODUCTION  The purpose of this presentation is to outline the criteria of energy mix over for SENELEC generation projects : plants and IPPs and measuring the evolution overtime of the foreign private sector’s interest  A clear option taken by government to attract private sector in the development of IPPs: - legal and tax incentives - other measures

WHICH ENERGY MIX TO CHOOSE? I- FIRST GENERATION OF IPP-GTI AND KOUNOUNE  GTI-2000: 50 MW combined-cycle. Main shareholder: GE  KOUNOUNE-2008: 67.5 MW fueled with HFO Main shareholder: MATELEC

WHICH ENERGY MIX TO CHOOSE? II – SECOND GENERATION OF IPP FOLLOWING RISE IN FUEL PRICE IN 2006  70 MW IPP Diesel Plant in Taiba NDiaye fueled with HFO in 2015  125 MW IPP Coal-fired Plant in Sendou in 2015  AFRICA ENERGY 270 MW Coal-fired Plant in 2017  Renewable energy projects in 2014: 300 MW. 50% of which are solar power and 50% wind power

WHICH ENERGY MIX TO CHOOSE? MIX FROM BILATERAL CO-OPERATION Production of natural gas from the Banda deposit (Mauritania) Power Distribution Network (2017) Importation of 20 MW HFO-fueled power from Mauritania from October 1st and of 20 MW HFO-fueled power in 2016

Production of Natural Gas between 1987 and 2014  Diam Niadio : Nm3 of gas (8.8 BCF)  Gadiaga/Sadiaratou : Nm3 Nm3 of gas (~ 9.2 BCF BCF) (currently under development) WHICH ENERGY MIX TO CHOOSE? MIX FROM LOCAL PRODUCTION OF NATURAL GAS

SUB REGIONAL HYDROPOWER PROJECTS Beside renewable energies. priority should be given to lower cost hydropower projects WHICH ENERGY MIX TO CHOOSE?

Hydropower Projects Site namesEquipment debit (m3/s) Installed power Average production (GWh)/annum Gouïna Koukoutamba Gourbassi Boréya Balassa Total

SOUTH-TO-SOUTH REGIONAL INTERCONNECTION PROJECTS : WAPP WHICH ENERGY MIX TO CHOOSE?

Challenges to be faced by IPPs 1- risk of additional cost and timeout: deadlines for implementation: contracting phase and development &building phase – timeframe: 36 months 2- financial risk on the actual cost of IPPs: guarantees. land and tax incentives offered by the STATE. and environmental requirements may result in additional costs 3- delays induced by the tender procedures and regulation of IPPs: risk on administrative procedures. New incentives: WHICH ENERGY MIX TO CHOOSE?

INVESTMENT PLAN - UNIT OPERATIONAL COSTS ON THE DECREASE Total operating expenses decrease from 92.2 to CFAF/kWh over YEAROPERATIONAL COST VARIABLETOTAL

ENERGY MIX TRENDS 15

WHY INVEST IN SENEGAL? 7 REASONS FOR INVESTING 1 A stable and open country 2 Sub-regional integration WAEMU-WAPP 3 Modern infrastructure 4 A geographical location: privileged access to regional and international markets 5 Quality human resources 6 Legal and fiscal incentives 7 Sound and competitive economy 16

CONCLUSION Senegal has remained open to foreign private investors since the past 10 years. The issue of energy is central to Government’s development and growth strategy Energy mix is a Government instrument to offer adequate and reliable energy at the lowest cost. The strategic objective of the mix is to lower the price of electricity in Senegal. ? THE QUESTION IS TO KNOW which energy mix options allow us to achieve a lower energy cost and to attract investors in our sector…

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