Over the last 5 years, how has the energy mix changed, and what have been the key drivers?

The Republic of Senegal launched the Energy Sector Development Policy Letter of October 31, 2012, pursuant to Act no. 2010-21 on the Renewable Energy Policy Law of December 20, 2010, and Decree no. 2011-2013 on the Implementation of the Renewable Energy Act.

This decree sets the conditions for the purchase and remuneration of electricity generated from renewable energy sources by power plants and their connection to the grid. The 2012 Energy Sector Development Policy Letter aimed to diversify sources of energy generation. The Senegalese National Electricity Company (SENELEC) signed several power purchase agreements with independent power producers (IPPs) in order to buy power to be injected into the public grid. Moreover, SENELEC also buys the surplus of renewable energy generated by self-producers.

In 2013, the Republic of Senegal adopted the strategic energy plan, which aimed to increase the energy mix dynamic in the country for a five years (2013-2018). The energy mix refers to the development of power generation from coal, gas, hydro, solar and wind. Current percentages of power generation:

• From location: 5,2%
• From SENELEC: 31%
• From hydro: 5,2%
• From solar PV: 11,5%
• From wind: 3,8%
• From IPP (conventional): 27,4%
• From Mauritania (importation) :1,4%
• From self-producers: 0,4%
• From non-interconnected grid: 4,7%

Between 2013 and 2018, plants producing 143 MW of solar PV, 201 MW of heavy oil convertible into natural gas and 15 MW of hydroelectricity (from the Organization for the Development of the Senegal River infrastructures) and 125 MW of coal power were installed.

In 2019, the government adopted an electricity roadmap for 2035 to increase access to electricity, make the energy mix more dynamic and reorganize electricity subsectors (production, transport and commercialization) as well as the governance of the sector. This roadmap is in line with the Senegalese Development Plan for 2035 adopted in 2014.

Total capacity will be increased in the next few years as Senegal has discovered 17 trillion cubic feet of natural gas at the Grand Tortue Ahmeyim (GTA) gas field near the maritime border with Mauritania. Production is expected to start around 2023. In this regard, a gas code was adopted in 2020 through Act No. 2020-06, following a National Strategy Plan called “Gas to Power” in 2018. The main objective of this strategic plan is to produce electricity from natural gas and to increase public access to electricity in Senegal.

What is the outlook for the energy and natural resources sector in the next 5 years? In particular:

Key policy decisions

New electricity code: The Senegalese government has adopted a new electricity code through Act No. 2021-31 of July 9, 2021. The main provisions of the act include raising awareness of regional electricity markets (West African Power Pool - WAPP) with third-party access to the grid, promoting renewables and increasing the energy mix using natural gas, boosting energy efficiency and the development of off-grid rural electrification. According to the code, the government will set up a national electricity holding with subsidiaries in each step of the electricity value chain, including generation, transmission, and distribution and further regulation related to third-party access to the grid.

Regulatory authority: The current electricity regulation authority has been replaced by the Energy Regulation Authority set up by Act No. 2021-32 of July 9, 2021. The new body oversees the regulation of the energy sector, including downstream petroleum activities and midstream and downstream gas activities. It will also oversee third-party access to the grid.

Grid code: A grid code is also expected to be adopted in 2021. This code will allow third-party access to the grid according to WAPP regulations. It also separates the roles of infrastructure managers (gestionnaire de reseau) and system operators (opérateur du système).

WAEMU Energy Code: The West African Economic and Monetary Union (WAEMU) is working to adopt an energy code that will apply within its frameworks.

Main policy challenges

The key challenges for the implementation of the policies mentioned above:

• Renewal of infrastructure as current infrastructure is outdated;
• Integration of renewable energies into the national grid;
• Optimization of the energy mix including new natural gas production;
• Ensuring competitiveness of local production in the regional market (WAPP); and
• Capacity building for the public administration regarding the new policies.

The anticipated role that renewables and/or new technologies will play

Renewables and/or new technologies will play an important role in Senegal:

• New technologies will can ensure the efficient use of power, including implementation of smart metering.
• They will contribute to the planning and management of power transmission, including at the regional level through WAPP.
• Renewables will facilitate access to electricity and rural electrification.

What are the key investment opportunities in the energy and natural resources sectors over the next 5 to 10 years?

In accordance with the gas to power strategy mentioned above, the key investment opportunities in the energy and natural resources sectors are:

• activities regarding the generation of electricity from natural gas; and
• development of infrastructure to obtain and transport natural gas.

In accordance with the renewable energy strategy of the country, the key investment opportunity is going to be IPP projects for solar energy, battery storage and wind energy.

With particular focus on sustainability, and on reducing carbon emissions, how will the energy and natural resources landscape change over the next 5 to 10 years?

As mentioned above, Senegal is implementing a gas to power program in the energy sector. The purpose of the program is to convert existing thermal power plants to dual-fuel and to build future thermal power plants using natural gas as a primary energy source. The exploitation of the GTA field will play an important role in promoting consumption of clean energy and will support the implementation of the gas to power program.

It will produce some positive outcomes for the state, investors, and the population. These advantages are:

• Reduction of the supply of environmentally harmful fuels such as fuel oil to SENELEC;
• Phasing out the tariff compensation paid by the state (and thus a reduction of the state's costs);
• Reduction of the costs of access to energy for the population and companies in Senegal; and
• Achieving universal access to energy by 2025, as well as providing a cleaner source of energy.

In addition, the use of power generated from natural gas and the phasing out of fuel oil for power generation will contribute to the reduction of carbon emissions in the country.