ECOWAS Energy Consultant wants governments of member-states to mandatorily create a sound regulatory framework such as transparent licensing and tariff regimes for solutions to thrive
The Economic Community of West African States (ECOWAS) has been tasked to increase electricity access in the sub-region so as to guarantee stable and affordable energy, integrate the power markets of member states, harness and create an investment framework towards the utilisation of energy resources.
Dennis Asare, Consultant, Centre for Energy and Natural Resources Studies in Accra, Ghana, made the revelation on Tuesday during a presentation on the theme “Investment Promotion and Protection of stakeholders in the Ecowas Regional Electricity Market.”
According to the ECOWAS Energy Consultant, West Africa is endowed with enormous energy resources; however, about 60 million people were living in darkness because the resources are unevenly distributed and located far from those without access.
“Access to electricity is overly concentrated in the urban centres. Only Ghana, Cape Verde, and Cote d’Ivoire have achieved over 50 percent rural access,” he notes.
According to the International Energy Agency (2022), Cape Verde registered 93 per cent rural access, Ghana has 74 per cent access, and Cote d’Ivoire with 55 per cent. The reports showed Nigeria only registered 36 per cent of rural coverage, Senegal with 47 per cent, Niger with 1 per cent, and The Gambia with 35 per cent.
According to the WAPP 2017 findings, out of the 92 per cent power generated, only 8 per cent was traded.
“The regional electricity market has not worked effectively because: utility companies are not financially viable, weak transmission and distribution infrastructure, inadequate investment and finances, and non-enforcement of regional regulatory measures.
Averagely, Ghana’s transmission losses were about 60-70 percent of total exports to the sub-region over the last two decades. In 2021, Ghana’s transmission losses were equivalent to 62 percent of exports,” he explained.
He also pointed to the ECOWAS Parliament Joint Committee meeting that despite the challenges of the regional market, its transition of electricity offers significant tariff and financial savings to member states.
“Ghana, Côte d’Ivoire, and Nigeria could achieve production savings of about US$250 million and US$700 million respectively by 2025 with unit cost savings between 4-11 percent,” according to Power Africa (2019).” In terms of Renewable Energy, Dennis Asare said Renewable energy investment in West Africa has been relatively low in the past two decades.
According to him, “West Africa received only 7 per cent of Renewable Energy Investment between 2000 and 2020. “Nonetheless, West Africa is the second highest destination of off-grid Renewable Energy investment in Africa. West Africa received about a third ($509 million) of the total off-grid Renewable Energy investment between 2010 and 2020.”
On the way forward, Asare recommends that governments commit to creating a stable political and economic environment to reduce the risk of project failure in the sub-region. He cited the recent political instability in Burkina Faso, Mali, and Guinea.
“Governments must create a sound regulatory framework such as transparent licensing and tariff regimes for such solutions to thrive,” he said.