Analysis of an Alternative Green Energy Scenario Tender - 67667969

Procurement Summary

Country: Niger

Summary: Analysis of an Alternative Green Energy Scenario for the Least Cost Generation Plan

Deadline: 05 Jul 2022

Posting Date: 13 Jun 2022

Other Information

Notice Type: Tender

TOT Ref.No.: 67667969

Document Ref. No.: 1281612

Competition: ICB

Financier: World Bank (WB)

Purchaser Ownership: Public

Tender Value: Refer Document

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Tender Details

Expression of Interest are invited for Analysis of an Alternative Green Energy Scenario for the Least Cost Generation Plan
Assignment Description
1. Background

At 19.5%, electricity access rate in Niger is not only among the lowest in Sub-Saharan Africa, but it also hides big disparities between urban and rural areas. According to NIGELECs data, grid access rate ranges from 50 percent to 86 of the population in regional capitals. Outside of the main regional capitals, namely in other cities and rural areas where 83 percent of the population lives, only 5.3 percent of the population benefited from electricity in 2020. On the supply side, the power system is heavily dependent on imports of cheap electricity from Nigeria and expensive domestic diesel-based generation. Forecasts of the power sector indicates the need to increase generation capacity and change in the systems configuration to meet the high annual demand growth above 10 percent per year.

The government has set a target for 30 percent share of renewable energies by 2030, emphasizing on least-cost and low-carbon technologies to leverage local renewable resources such as solar, wind and hydropower to achieve this transition. The GoN seeks to add about 1, 015 MW of new generation capacity by 2025, with more than half of it being domestic generation.

To prepare the sector for a scale up in investments dedicated at accelerating electricity access according to the National Electrification Strategy (NES), the Government of Niger (GoN) has undertaken a series of reforms. In May 2016, it adopted an Electricity Code which currently governs the power sector. This ended the quasi monopoly of the vertically-integrated national utility, NIGELEC, opened up the sector to private sector participation, particularly in generation and in rural electrification and created an independent Energy Sector Regulatory Authority (ARSE) under the Prime Ministers Office. In 2018, the Government implemented a new tariff setting methodology and structure based on a cost-coverage approach since 1994. The new tariff methodology allowed an overall increase of 20 percent with a pro-poor social tranche and a multiannual electricity tariff adjustment covering 20182020 and 20212022. Furthermore, a performance contract was also approved in February 2019 between the State and NIGELEC. The GoN has also implemented NIGELECs debt restructuring plan by increasing its share in the capital of the electricity utility which brought the ratio of equity to permanent capital below 50 percent.

Niger has prepared its least cost plan for power development for generation and transmission. The Generation plan includes several fossil-fuel based solutions including coal and HFO which donors could not support, even though it makes technical sense for Niger to use available domestic resources. The generation plan is based on a list of projects established in 2018 at the beginning of the study of the plan. This list has since changed, and the study was finalized in early 2022 without its update. Some assumptions of demand forecasting based on business start-ups and urban development have also changed due to the postponement or cancelation of these projects. The Generation Plan therefore requires an update to consider new assumptions of demand forecasting and new projects, the majority of which are based on renewable energy sources. Similarly, the Transmission Plan based on demand forecasts and the Generation Plan must be updated accordingly. In addition, some assumptions, specific to the Transmission network need to be updated, such as the dates for (i) the start of the second interconnection line with Nigeria and (ii) the start of the establishment of a national network connecting the networks of the Western Zone and the Central-East Zone.

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