Towards a Viable and Robust Energy Market in the West African, ECOWAS Region

Despite the complexities of their development, regional energy markets provide an opportunity to take advantage of economies of scale, reduce overall cost of energy, leverage technologies and rally international and domestic investments by expanding market size.

The Economic Community of West African States (ECOWAS) region, comprised of 15 West African countries (Benin, Burkina Faso, Cape Verde, Cote d’Ivoire, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo), boasts an abundance of energy resources (both conventional and renewable), yet the region is characterized by low electricity access. Electricity consumption levels are also very low in the region (150 kWh per annum). Moreover, access rates vary greatly from country to country and range from as low as 9% to more than 90%. The region’s power sector, which is comprised mainly of isolated national systems, proves inadequate in meeting rising electricity demand.

These are some of the reasons that have led to the establishment of specific energy institutions in the ECOWAS region, such as: the West Africa Power Pool (WAPP), the ECOWAS Regional Electricity Regulatory Authority (ERERA), the West Africa Gas Pipeline Authority (WAGPA) and the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE). These institutions work together to ensure that the region achieves regional energy integration and cooperation.

These institutions, together with international partners, civil society and the private sector, got together for the maiden edition of the ECOWAS Sustainable Energy Week, which took place from 17-19 October 2016, in Accra, Ghana. The Week, which was supported by the Austrian Development Cooperation (ADC), the Spanish Agency for International Development Cooperation (AECID) and the United Nations Industrial Development Organization (UNIDO), focused on how the region can forge ahead with the establishment of a sustainable robust and viable regional energy market. Discussions not only highlighted the historical efforts of the ECOWAS on regional energy integration, but also took stock of the current status of the regional electricity market.

Through the West African Power pool agency, ECOWAS has developed the ECOWAS Generation and transmission master plan, to promote the exchange of electricity among the 14 inland ECOWAS States.

For its part, ECREEE seeks to take advantage of the potential of the abundant renewable energy resources in the region and is developing the West Africa Clean Energy Corridor (WACEC) in cooperation with the International Renewable Energy Agency (IRENA). ECREEE is currently focusing on developing a 2 GW solar corridor. Efforts are well advanced in identifying the projects that will form part of the solar Corridor. The measures currently being taken include: zoning and resource assessment; country and regional planning; the development of enabling frameworks for investment; capacity building and awareness raising; and the promotion of political support.

One of the main messages from the ECOWAS Sustainable Energy Week was that “ECOWAS member States have set their mind to develop a single robust regional energy market to pool regional energy resources together to increase access to modern and sustainable energy services for its citizens.” This market must also be designed to increase the share of renewable energy to take full advantage of the region’s potential and shift away from environmental polluting resources and technologies, such as coal and diesel oil. The market must also be guided by best practice rules that foster power exchange across borders.

Cross border cooperation for energy is not new. In fact, the ECOWAS Energy Protocol is modeled after the European Energy Charter Treaty. The Protocol, which was signed in December 2003 by ECOWAS Heads of State, seeks the swift elimination of cross-border barriers to trade in energy.

Going forward, all the re- gional entities (WAPP, WAGPA, ECREEE and ERERA) have shown a commitment to the Protocol and to the development of the single market. All four entities are actively engaged in fulfilling their part through a number of regional actions. For its part, ERERA will have to harmonize market rules that free cross border trade of energy. The WAPP is tasked to scale up the planning and construction of interconnection infrastructure, as well as the control and commercialization of cross-border electricity exchanges, while ECREEE is to ensure a significant increase in renewable energy in the overall power pool.

Overall, there is consensus that the inter-connection of national power grids, the development of a regional power pool, as well as other regional infrastructure will go a long way in achieving the energy delivery objectives of the region. All stakeholders, including the ECOWAS member’s States, are looking forward to the next edition of the ECOWAS Sustainable Energy Week when real concrete progress would have been made. In the words of John Jinapor, Deputy Minister for Power of Ghana, “the establishment of the West African energy market is long overdue.”