Senegal: Regulatory Status and Prospects in the Electricity and Renewable Energy Sector- Franck Allesie

Intending to diversify energy production sources and reduce the government’s dependence on fossil fuels (coal, oil, gas), the Senegalese government has implemented a legal framework to ensure the promotion and development of non-fossil fuels and the protection of the environment.

It is in this regard that the law No. 2010-21 of December 20, 2010, on the orientation law on renewable energies was adopted.

This law provides that the selection of independent producers of electricity from renewable energy sources is made through calls for tenders issued by the Commission de Régulation du Secteur de l’Electricité su Sénégal (CRSE). However, as a transitional measure, the CRSE gives the Minister in charge of energy (currently the Minister of Petroleum and Energy) the power to approve unsolicited bids submitted by private promoters, intending to negotiate energy purchase contracts with Société Nationale d’Electricité du Senegal (SENELEC). In the same vein, the CRSE has always considered that when SENELEC is not a bidder, it can proceed to launch calls for tenders. Within this framework, the CRSE supervises the process, and SENELEC is responsible for submitting the results of the work at all stages for validation.

Senegal is favourable to the development of renewable energy projects such as solar, wind, hydro, hydropower, tidal, small-scale hydro, and biomass energy. Concerning sunshine, for example, Senegal has significant solar potential with an average annual sunshine duration of about 3,000 hours and average irradiation of 5.7 KWh/m2/d. This irradiation varies between the sunnier northern part (5.8 KWh/m2/d in Dakar) and the southern part richer in rainfall (4.3 KWh/m2/d in Ziguinchor). Sunshine in Senegal is stable throughout the year. The winter period offers a little less sunshine than the dry season, with August as the least sunny month of the year.

To carry out activities of production, distribution and sale of electricity from renewable energy, the company is subject to obtaining titles (concession or license as the case may be). More specifically, in the case of production and sale of electrical energy, the promoter is subject to the issuance by order of the Minister of Energy for fifteen years, renewable, a license for the production and sale of electrical energy.

Within the framework of the distribution, wholesale purchase, transmission and wholesale sale of electrical energy, the promoter must obtain a prior concession to this effect from the Minister in charge of Energy. The concession is granted for 25 years, renewable.

In Senegal, SENELEC is the only company authorized to engage in the wholesale purchase, transmission and sale of electrical energy throughout the national territory. SENELEC holds an exclusivity period through the signing of a concession contract with the State of Senegal; an exclusivity period that allows it to have the status of a single buyer, which means the exclusive right to purchase throughout the Senegalese territory, from independent producers of electrical energy, intended to be transported using a transmission network.

SENELEC’s monopoly has been extended several times by an addendum to the concession contract and is still maintained until 2023. The purpose of the expiry of this exclusivity will be to allow third parties free access to the network. It will put an end-point to the single-buyer system by gradually allowing certain large consumers and independent retailers to enter into contracts for the purchase of electrical energy directly from independent producers of their choice.

It is also to be noted that in Senegal, any natural or legal person (company or household) can produce electricity from renewable energy for its consumption throughout the national territory. However, the exercise of activities for private consumption is subject to prior declaration addressed to the Minister in charge of Energy who can authorize the sale of any surplus.

In any event, the company (whether it is an independent producer or, to another extent, a self-producer) engaged in the production, distribution, transmission and sale of electricity from renewable energy sources is not exempt from obtaining all the authorizations required under the applicable regulations, in particular concerning town planning, the safety of personnel and the public and the environment. Besides, it must comply with all applicable competition provisions. It justifies this in the prior declaration of activity.

Moreover, Senegal intends to update its existing legal framework relating to electricity and renewable energies. The mood had already been set with the reorganization of the Ministry of Petroleum and Energy by decree No. 2020-024 of April 3, 2020. The elaboration of a network code, an Electricity Code as well as the subsidiaryization of SENELEC’s production, transmission and distribution activities are as many projects and reforms that will soon emerge from the Senegalese legal system.

The author is a PhD thesis candidate at the University of Paris whose research focuses on the analysis of Public-Private Partnership (PPP) agreements and its geo-economic issues in the West and Central African sub-region.

Read Franck Allessie’s Millenial Feature here