Senegal’s Energy Transition: a Tale of Lights and Shadows

Connect with us:

Senegal. Energy Transition

The full development of Africa’s renewable energy sources is still far from being complete: the necessary financial inputs exceed the possibilities of the dedicated public agencies, often immobilised by unsustainable costs, cumbersome energy transition plans, and lack of intermediate, feasible targets.

Statistical evidence and studies identify the participation of the private sector as urgent and necessary; however, in most countries of Sub-Saharan Africa, private investors might have to face different and unexpected barriers, such as unsecure or ambiguous regulatory frameworks, long and murky tender procedures, and political instability.

There is, however, an exception, calling for deeper consideration and analysis: the case of Senegal. In contrast to many countries on the continent, in the last decade Dakar has managed to attract numerous investments dedicated to the generation of renewable energy: in 2018, for instance, IPP’s accounted for two-thirds of total electricity production. The results are tangible, encouraging, and did not take long to arrive: between 2009 and 2019, the total generation of renewables grew from 12 MWs, to more than 230 MWs. The objectives of the Senegalese government are ambitious, but in line with the efforts necessary for the energy transition: by 2030, the country aims to increase the share of renewables in its overall energy mix to 23% (from the current 7%).

However, some challenges of the Senegal’s renewable energy market must be addressed: the country’s public utilities are in need of major reforms, while its transmission and distribution networks are calling for consistent investments and for a comprehensive digitalisation programme, aimed at boosting their resilience and cost-efficiency. The urgency of intervening on the electricity grid infrastructure appears even more evident, if we compare urban and rural percentages of access to electricity: the former significantly outweighs the latter (at 95% and 70% respectively).

Further issues are insufficient transparency and speed in the granting of permits, difficulties in resolving disputes between private actors, and a gap between energy tariffs and costs of generation, distribution and maintenance.

There are, however, plenty of solutions that Senegal could explore in order to solve these issues. As explained in RES4Africa’s new report Examen réglementaire du marché de l’électricité au Sénégal: vers une attraction des investissements du secteur privé, the bottom line should be to create favourable and welcoming conditions for private sector investments, by mitigating the perceived hazards through dedicated de-risking instruments, adopting standardised guidelines and templates for the drafting of contracts, and building a solid system of incentives, tax exemptions and subsidies. In addition, a well-structured procurement programme, able to diversify the energy mix away from oil, would be highly desirable, as well as an electricity mix away from biomass and towards solar, wind, and storage, thus creating a sustainable and resilient power sector.

Senegal’s renewable energy sector could also benefit from the adoption of clear and structured regulations dedicated to the integration of decentralised grids to the national network, as well as from a periodic and data-based review of the electricity tariffs, able to meet the consumers’ needs but also to provide the investors with warranties about their expected return on the investments. Equally, this should be paired with un unbundling of the electricity sector, to increase transparency and foment cooperation with third parties capable of sharing expert knowledge and offering financial support. 

Lastly, Senegal must allocate equal attention to all the segments of the energy value chain, from generation, to the development and growth of transmission and distribution networks, in order to avoid a standstill in the development of its RE sector. 

Senegal, in conclusion, is a country to keep an eye on: its track record of achievements is surely a model other African countries can apply to their internal energy markets, while its unsolved criticalities represent a wake-up call, for the international renewable energy community, to keep on investing in Africa, and believing in the immense potential of its countries. 

Other Reads

Other Reads

Res4 Africa

Res4 Africa

RES4Africa (Renewable Energy Solutions for Africa) is a Foundation that works in support of Africa’s just energy transition in order to achieve the SDG7, ensuring access to affordable, reliable, sustainable and modern energy for all.

More from the Author

Sign up for latest news and event info

Copyright © 2023 Energy Capital & Power. Privacy Policy · Terms of Use