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Energy sector development is a key component of Senegal’s Plan Sénégal Emergent (PSE), a national plan established to achieve structural transformation of the economy and reach middle-income status by 2035.[1] Alongside goals related to sectors such as health and infrastructure, some of the plan’s key energy objectives include lowering generation costs by reducing dependence on imported fuels and increasing access to electricity.[2]
However, much remains to be done. Currently, electricity is generated primarily by fuel imports, and while electricity access has reached 90% in urban areas it is still limited to roughly 44% in rural areas.[3] Moreover, Senegal has high electricity prices that are set at approximately 30% to 40% below cost recovery[4] as well as one of the highest production costs in sub-Saharan Africa – about $0.30 a kilowatt-hour (kWh). To enact successful reforms and ensure affordable and consistent access to energy throughout the nation, accelerating access to diverse generation sources is crucial.
Senegal is rich in natural resources. According to the World Bank, by 2025 its installed capacity is projected to include a minimum of 22% renewable energy resources (including solar, wind and hydroelectric power), 64% gas, and 8% coal.[5] In order to use these resources as a means of furthering economic and social development, the Government of Senegal adopted a “Gas to power” strategy in 2018. This strategy defines the areas of intervention for the development of electricity production from natural gas, and provides a legal, regulatory, and institutional framework for the midstream and downstream gas sector.
As the regulator overseeing the country’s energy sector, Senegal’s Commission de Régulation du Secteur de l’Electricité (CRSE) will play an integral role in working collaboratively with energy sector stakeholders to meet energy sector goals. Established in 1998, the CRSE’s responsibilities include regulating the production, transmission, distribution, and sale of electrical energy to the entire extent of the national territory.
With support from the United States Agency for International Development (USAID) and Power Africa, the National Association of Regulatory Utility Commissioners (NARUC) launched a regulatory partnership with the CRSE in 2017 as a means of strengthening its technical capabilities to regulate electricity and facilitate information sharing, consensus-building, and collaboration between energy sector stakeholders. Additionally, the partnership supports USAID and Power Africa goals to mobilize needed investment in Senegal by leveraging public and private financing while supporting the advancement of energy sector transactions. Strengthened regulation in Senegal will ensure that energy sector investments are economically sound, that projects and transactions come to closure, and that the stability and reliability of the electricity grid is improved.
Under the partnership, NARUC has provided support to aid the commission in its efforts to achieve energy sector policy goals and enhance regulatory capacity. As the nation seeks to employ more diverse power generation sources and utilize gas-to-power technologies, the CRSE has worked with NARUC to strengthen its skills in integrated resources planning (IRP) and regulating natural gas. In addition, Senegalese energy regulators have acquired knowledge from NARUC assistance on a variety of tariff and rate-related topics as well as on power procurement processes, all of which will help them to enhance regulatory transparency and create an enabling environment for investment in the power sector.
NARUC also supports Senegal through the West Africa Regional Regulatory Partnership.
Developing IRPs
Enhancing Senegal’s energy portfolio is a key pillar of its strategy to provide universal and reliable power access to its people by 2025 and increase economic competitiveness. Therefore, among other actions taken to strengthen the energy sector, Senegal is working to diversify its energy generation profile and use new resources, such as natural gas and renewable energy. In order to determine how/which new resources should be used, Senegal has begun the process of developing a resource planning process that will evaluate the energy needs of the country and how energy can be transmitted to serve a larger portion of the population in rural zones.
The CRSE will be the key agency to oversee the utilities’ drafting of the IRPs in Senegal, as it is mandated to evaluate and monitor utilities and energy companies. Therefore, the CRSE will be responsible for tasks such as establishing benchmarks and other quality of service indicators, among others, all of which are critical to ensuring the smooth implementation and development of a resources plan that charts the country’s mid-range energy needs.
In 2021, NARUC held a webinar designed for participants from the CSRE and the utility company, Société nationale d'électricité du Sénégal (SENELEC), to learn about the building blocks and essential elements of crafting a national IRP. Additionally, NARUC experts shared best practices in monitoring and evaluating quality of service, load forecasting, and stakeholder engagement strategies when conducting resource planning. All of these recommendations will assist the regulator in ensuring that an IRP is both technically accurate and reflective of supply and demand and ensuring that consumers are able to comment and provide input on the plan. As a result of the webinar, participants gained an understanding of how resources planning helps streamline energy resource capacity and can be used to help achieve overarching national energy goals.
Natural Gas Regulation
Though Senegal has traditionally relied on hydropower and imported diesel and fuel oil for electricity generation, the CSRE is shifting its attention to integrating natural gas into the energy portfolio. CRSE is working to develop a natural gas tariff structure, transportation tariffs, and pipeline safety measures, all of which are critical to ensuring smooth implementation. .
In 2020, NARUC conducted a webinar series on midstream and downstream gas regulation with the CRSE. The activity served as a comprehensive introduction to natural gas tariff structures and methodologies, safety protocols, and safety measure enforcement and investigation. It also provided a platform for CRSE staff to engage with French-speaking regulatory experts from both Canada and France to discuss how such tasks are implemented. As a result, the CRSE learned about key regulatory frameworks and tools, such as collecting accurate data, developing safety protocols, and tariff setting.
Power Purchase Agreement (PPA) Review and Approval Processes
While power generation projects are essential in countries that experience a shortfall of electricity, these projects often represent a pioneering level of investment and financial complexity. Many of them require Power Purchase Agreements (PPAs), which are designed to provide predictability and durability to enable business investment and help drive the growth and development of independent power producers (IPPs).
To complement Senegal’s efforts to create and/or improve procurement processes, licensing and permitting procedures for IPPs, and PPA agreements, NARUC experts reviewed the CRSE’s PPA review process in 2018. During the review, NARUC experts suggested improvements and shared regulatory best practices from the U.S. As a result, CRSE staff learned to identify ways to streamline and enhance the PPA review and approval process to ensure timely commissioning of new generation projects. With many gas- and renewable-powered generation projects currently in varying stages of PPA negotiations, the CRSE is set to play a vital role in ensuring a smooth growth in generation capacity.
Women in Energy Regulation Internship
Launched in 2017, the USAID/Power Africa and NARUC Women in Energy Regulation Internship Program aids in creating opportunities for the advancement and employment of young women in energy regulation by facilitating placements in short-term positions within their country's energy commissions. By completing this program, interns acquire the foundational technical skills, professional experience, and institutional knowledge needed to pursue a career in the sector and become attractive candidates for employment at the host commission, other regulatory agencies, or regulated entities such as electric utilities.
In 2019, the CRSE welcomed an intern under the internship program. Under the CRSE, the intern’s work focused on a directive from the commission that would contribute to the effort of regionalizing a West African electricity market. In particular, she had an opportunity to delve into the energy regulatory field alongside the national regulator and examine legal frameworks to participate in ongoing electricity sector reforms. Through this experience, she was able to build confidence in her regulatory and legal knowledge, which she can use throughout her career journey.
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[1] “Senegal Energy Outlook.” IEA. https://www.iea.org/articles/senegal-energy-outlook
[2] “Senegal Power Africa Fact Sheet.” USAID. https://www.usaid.gov/powerafrica/senegal
[3] Idem.
[4] “Making Senegal a Hub for West Africa.” International Monetary Fund. https://www.imf.org/external/pubs/ft/dp/2015/afr1501.pdf
[5] “Project to Promote a Shift towards Lower Carbon Power Generation in Senegal (P169744).” The World Bank. http://documents1.worldbank.org/curated/en/581421558458547633/pdf/Concept-Project-Information-Document-PID-Project-to-Promote-a-Shift-towards-Lower-Carbon-Power-Generation-in-Senegal-P169744.pdf
Project Dates: 2017 - present
Primary Partner: Commission de Régulation du Secteur de l’Electricité (CRSE)