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Benin (2012)

Source: REEEP Policy Database (contributed by SERN for REEEP)

This policy & regulatory overview is not updated anymore since 2015. We decided to keep it online due to high demand but would like to make you aware of the fact that it might be outdated.

Energy sources

Total installed electricity capacity (2008): 60 MW

  • Conventional Thermal: 98.33%
  • Renewable: 1.67%


Total primary energy supply (2009): 3,475 ktoe

  • Biofuels & waste: 58.7%
  • Oil: 41.3%


Benin has several crude oil reserves that are officially subdivided into 17 blocks. Seven blocks have already been granted to companies who are currently actively exploring existing resources. From 1982 to 1998, Benin has exploited a small offshore oil field. The cumulated production is an estimated 22 million barrels of crude oil. Potential reserves are assessed at more than 5 billion barrels of crude oil, and more than 91 billion m³ of natural gas. Therefore, several multinational oil companies are investigating sites of local reserves and their availability.

As with many countries in Sub-Saharan Africa, Benin's energy sector is dominated by the use of biomass-based energy sources. Households are responsible for the majority of the total energy consumption, with a total of approximately 63.9% in 2011. The transport sector accounts for 23.2%, the service sector for 10.6%, and the industry sector for about 2.3% in the same year.

Benin’s energy is produced by CEB (Communauté Electrique du Benin), a binational company owned by Benin and Togo. Energy is then distributed by SBEE (Societe Béninese d'Energie Electrique). Between 2005 and 2007, CEB’s energy production declined, and available imports from Côte d’Ivoire dipped by more than 30%. As these arrangements do not fully cover Benin’s needs, and supply of hydroelectricity is regularly interrupted by drought, SBEE imports electricity directly from neighbouring countries such as Ghana and Côte d'Ivoire, and engages in its own energy production using rented and owned diesel generation (around 15% of total demand). In 2007, 579 GWh, or 76% of Benin's energy demand, were met through supplies from CEB, and 180 GWh, or 24%, were provided by SBEE mainly from its own diesel generation.

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Reliance

Security of supply is a major issue in the sector. Benin relies on energy imports and produces just 18% of its national energy requirements. The rest of the electricity consumed is imported from Ghana, the Ivory Coast and Nigeria through the Communaute Electrique du Benin (CEB) – a bipartite utility supplying electricity to national utilities in both Benin and Togo. There is also no national oil refinery. Therefore, all petroleum products are imported via license or also, commonly, through the black market.

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National Electrification Rate (2009): 25%

  • Urban: 53%
  • Rural: 2%


Important differences in access to electricity remain between urban and rural populations. Whereas 53% of urban dwellers have access to electricity, only 2% of rural residents do. Lack of adequate and reliable supply of electricity has forced more than 60% of the population to rely on biomass as their primary energy source.

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Capacity concerns

Traditional fuels such as firewood and charcoal are the most frequently used. Around 97% of rural households rely on firewood for cooking. The unsustainable use of biomass in Benin has contributed to a serious decline in forest cover.

Low electrification rates in Benin are linked to the insufficient and unreliable supply of power. CEB, (the power generation and transmission company owned by Benin and Togo, with headquarters in Togo) sells power to SBEE (Benin’s distribution company). CEB’s own production capacity is limited to the Nangbeto hydroelectric power plant (66W) and 40 MW gas turbines in Togo and Benin. As CEB has not made the required investments in its generation capacity, it has been unable to meet growing power demand, depending instead on imports of electricity from neighbouring countries such as Ghana, Côte d'Ivoire, and Nigeria.

Limited and unreliable power supply restricts business in Benin. In 2005, 63% of firms reported that power was a major constraint to doing business, and around 68% of firms reported losses due to limited power supply. In 2009, firms indicated that around 7.5% of value was lost because of  power outages that totalled, on average, 24 days per year. Power consumption per capita in Benin, at 72 KWh/capita per year, is below the average consumption in low-income countries in Africa and only a hundredth of the average for middle-income countries.

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Renewable energy

Solar energy
The solar energy potential of Benin varies between 3.9 kWh/m² and 6.2 kWh/m². Currently, 448 kW of PV installations are operational, primarily for villages, health centres, and telecommunications, funded by the government or the Islamic Development Bank.

Wind energy
According to the National Meteorological Office, the wind speed varies between 3 and 6 m/s. More detailed information is not available; therefore it is not possible to give a complete overview of the existing potential.

Biomass energy
The potential of wood energy includes contributions generated through National Reforestation Campaigns, as well as allocations of the National Wood Resources Office. The objective of the dedicated firewood project is to increase the supply of wood energy by enlarging plantations in the south of Benin.  Besides traditional wood energy, a substantial potential of about 5 million tons is identified from agricultural residues.

There are currently only a few production capacities for ethanol. For example, the Benin sugar plant, operated by “Sucrerie Complant du Bénin“ (SUCOBE), produces 40,000 tons of sugar and 4,200 m³ of ethanol per year. The YUEKEN Benin International plant has an output of 3,000 m³ of ethanol per year, derived from cassava. Due to the missing distribution infrastructure this production is not used for energy or transport purposes.

Biofuels
Various oils like pourghère, castor, palm, cotton, soy and peanut oils could be used for the production of biodiesel. In Benin there are few plants that can process vegetable oil to transport fuels. Two installations with a combined capacity of 210,000 tons are located in Bohicon. Furthermore, there is a palm oil plant in Hinvi. The capacities of these plants are not fully exploited, with currently only 30% being used.

The utilization of ethanol at an admixture rate of 15 % will create a market for roughly 33 million litres per annum. A recent survey identified a potential of 116 million litres in 2015 and 229 million litres in 2020. If the market of the European Union is taken into account, these figures are even higher.

Geothermal energy
No study has been conducted into geothermal potential of Benin. The country has little change in elevation, and little active volcanism, suggesting a low potential.

Hydropower
Benin has a significant potential for hydropower. A recent survey shows the Oueme River is sufficient for  twenty sites with a total capacity of 760 MW, and annual output of more than 280 GWh. Approximately 80 other sites are equipped with small-scale hydro installations for rural electrification.

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Energy efficiency

Few activities have been initiated by the Government of Benin to address energy efficiency challenges. On the supply side, ongoing activities include the retrofitting of existing power plants, investment in power generation plants, and the enhancement of the distribution network and equipment. On the demand side, the Energy Directorate at the Ministry of Energy and Water has initiated energy saving projects to reduce electricity expenses in public buildings. In 2004, Benin’s Agency for Rural Electrification and Energy Conservation (ABERME) was created.  However, no major measures in the area of energy efficiency have been taken since its establishment.

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Ownership

Electricity market
The Communauté Electrique du Bénin (CEB) is the state-owned electricity company of Benin and Togo. The CEB is in charge of production, distribution and the import of electricity in both countries, and is jointly owned and managed by Benin and Togo. The CEB is responsible for development of the electricity infrastructure of both countries.

The Benin National Power Utility (Société Beninoise d'Electricité et d'Eau, SBEE) is largely involved in the distribution of electricity within the national territory of Benin. The SBEE is also responsible for the development and upgrade of the interconnection of the North Togo/North Benin networks.

The institutional structure of the power market between Benin and Togo imposes a significant financial burden on CEB. As CEB is, by law, the producer of energy for both Benin and Togo, all power produced by SBEE and CEET (Togo’s power utility) must be bought by CEB, which then resells it to these utilities at a price lower than its purchase price. As of 2009, the average effective tariff charged by CEB was $0.11 per kilowatt-hour, against an average cost of $0.19. This situation has resulted in important losses to CEB, which has seen the losses associated with under pricing increase from $33 million in 2005 to $50 million in 2009. Furthermore, SBEE’s liquidity problems have created arrears to CEB, which are slowly being paid by Benin’s government. These payments were as high as $23 million in 2007, equivalent to almost 4% of Benin’s 2007 national budget.

Liquid fuels and gas market
The Ministry of Energy and Water (Ministere de l'Eau et de l'Energie, MEE) controls and supervises the petroleum sector of Benin. It is the major regulatory institution, and decides all matters within this sector. Besides the MEE, several oil companies are involved in the petroleum sector of Benin. The national oil company SONACOP, together with several licensed companies such as Total Benin, Texaco Benin S. A. and Oryx Benin S. A., are in charge of import and distribution activities. Furthermore, several unlicensed importers and distributors have created an informal market for petroleum products.

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Competition

The revision of the Benin-Togo Electricity Code in August 2006 ended the CEB monopoly over electricity production, thereby opening the electricity production and distribution segments to private operators. However, with respect to commercial electric power, CEB remains the sole buyer of production (except in regions not serviced by CEB, where SBEE plays such a role).

SONACOP is responsible for the distribution of oil and petroleum products, as well as their importation. The government currently controls 45% of SONACOP, the rest having been sold to private-sector participants in 1999.

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Energy framework

Benin does have high potential for renewable energy. Renewable energy is viewed as an option for increasing energy independence and reducing the reliance on expensive energy imports. Consequently, the national objective is to increase the electricity production and to promote a significant contribution of renewable energy to the overall energy supply of Benin. The stated objective of state policy is to cover the whole territory within the next two decades.

The national strategy is to facilitate private sector involvement in rural electrification. The country has been divided into 15 zones, known as Concessions for Rural Electrification (REB). Localities within each zone can develop initiatives for the electrification of their area, but there are also calls for bids for concessions. Within the REBs, Priority Programmes for Rural Electrification (PPRA) are the electrification of localities identified as priorities. There are 4 concessions currently under development. In order to enable consistent resources to finance rural electrification, the government has created a rural electrification fund (ERF). This fund is drawn from a combination of resources such as state grants, donor funding, gifts and bequests and taxes on electricity production. Nevertheless, the rural electrification programme is currently under funded.

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Energy debates

The utilisation of biogas is currently only planned for the large-scale level. Pilot production units for biogas from animal residues are planned at former state-owned farms with financing from private investors. Several pilot electricity production units and three larger production units (mainly using household residues) will be gradually implemented at 5 MW per unit in 2011, 2018 and 2024. The country is also currently further developing plans for three small hydropower projects of 72 MW, 42 MW and 36 MW respectively.

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Energy studies

Benin is a member of the Economic Community of West African States (ECOWAS, http://www.ecowas.int/), which is working towards greater regional cooperation in energy. ECOWAS has approved an Energy Protocol that outlines principles for cross-border energy trade and investment. In particular, the West African Power Pool project is developing plans for the inter-connection of Benin with the electricity grid of Nigeria, and the upgrading of the existing Benin-Togo-Ghana electrical transmission infrastructure. The ECOWAS is also looking into the West African Gas Pipeline (WAGP) project, to connect the aforementioned three countries with Nigeria's natural gas production capacities.

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Role of government

The Ministry of Energy and Water (Ministère de l‘Energie et de l’Eau – MEE, www.gouv.bj/spip.php?rubrique150) is responsible for the overall electricity sector and all related policies. It is in charge of managing the country's hydropower potential, as well as all matters related to alternative energy sources in Benin.

The Ministry of Agriculture, Livestock and Fisheries is responsible for assisting the MEE in promoting the sustainable use of biomass resources to the public.

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Government agencies

The Benin Agency for Rural Electrification and Energy Control (ABERME) was founded in 2004, and is responsible for the implementation of policies in the field of rural electrification. ABERME aims to implement a wide spectrum of energy efficiency measurements in Benin. The agency has divided the country into 15 rural electrification concessions, and has offered tenders to private sector actors.

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Energy procedure

o meet the supply gap Benin is undertaking investments in an 80 MW thermal power plant. Also being prepared is a 400 MW regional gas-fired power plant spearheaded by the West African Power Pool to be constructed in Benin. In addition, Benin and Togo are now pursuing the completion of the proposed 147 MW Adjarala hydropower plant in the context of the West African Power Pool. It is expected to provide a good complement to the overall power mix.

At the time of writing there were no registered CDM projects in Benin. A 2006 study by the Hamburg Institute of International Economics (HWWA) investigated the potential CDM pipeline in Benin, which included hydroelectricity, gas power generation, sustainable production of fuel wood, high efficiency kilns for charcoal production, off-grid solar electrification, ethanol production from cashew fruits, and potential grid interconnection projects.

There have also been capacity building initiatives to develop project documentation and encourage the registration of projects. For example, Benin was involved in the CASCADe programme, a joint initiative of UNEP and UNEP Risoe Centre. The programme identified the project activities including:

  • A 3 MW gasification plant in Kandi, North Benin;
  • Jatropha plantation and fossil fuel substitution in the Zou region of Benin;
  • Rehabilitation of degraded lands of Djidja.

Although none of the projects has been registered to date, it is clear that the project potential lies in renewable energy generation and biomass energy efficiency sectors. Aside from the CDM, there is an improved cooking stove project that has been registered under the Voluntary Gold Standard.
 

  • Benin: GEF Energy Efficiency Project


Supported by a Global Environment Facility (GEF) grant of US$1.82 million, this project seeks to improve energy services in urban areas for customers that already have access to electricity by:
(i) Installing compact fluorescent light bulbs (CFLs) to reduce peak demand and consumption;
(ii) A regulatory and labelling system for CFLs and individual air conditioning units, to provide consumers with efficient and high-quality products;
(iii) Promoting energy efficiency through capacity building, information, and awareness.

The project focuses on lighting and includes the distribution of 350,000 subsidised CFLs. It is part of the Increased Access to Modern Energy Project (DAEM) totalling US$70m.

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Energy regulator

Energy policy and regulation are currently conducted through the Ministry of Energy and Water, but the West African Power Pool Regional Regulation feasibility study shows the desire for the establishment of a Regional Regulatory Body.

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Degree of independence

The Ministry of Energy and Water (MEE) is a government body, with the Minister being appointed by the President, and funds being allocated from the national budget for its operation.

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Regulatory framework

The government planned  to have in place a regulatory system for the electricity sector by June 2011, to open up the capital of the state-owned electricity company to the private sector. At present, potential customers have to consult two state monopolies in order to become connected (the SBEE and the CEB). Law No.98-032 1998, Portant Réforme du Secteur de l’Électricité: Structural Reform of the Electricity Sector, is the current power sector law. This law contains regulations related to authorisation and concession, electricity tariffs and the entry to the electricity market of the private sector.

The practices are shown in Decree No.2001-173, fixing the condition and applicable mode of the Law No.98-032 1999 for structural reform of the electricity sector.

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Regulatory roles

The Regulatory Body that Benin wishes to institute aims to:

  • Develop cross-border exchanges,
  • Supervise progressive opening to competition,
  • Improve communication among stakeholders,
  • Restore investor confidence.


Main regulatory functions will include;

  • International standards,
  • Monitoring competition,
  • Ensuring, stakeholders respect their commercial and contractual commitments,
  • Develop interconnection and power exchange between power systems of Member States of the West African Power Pool Project,
  • Use of gas flared in Nigeria to feed power stations in neighbouring countries (West African Gas Pipeline Project)
  • Promotion and protection of private investments,
  • Harmonising legislations and standards of operation in the power sector,
  • Creation of an open and competitive regional electricity market.
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Energy regulation role

The Ministry of Energy and Water (MEE) is the major government agency responsible for electricity regulation, although the The Benin Agency for Rural Electrification and Energy Control (ABERME) is also involved, through the undertaking of capacity-building measures in small-hydro plant production and maintenance.

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Regulatory barriers

Outdated technology, lack of technical knowledge and inadequate finance are major barriers to implementation of renewable energy in Benin. Also, no incentive measures, such as exemption from taxes, are available for potential investors. The high costs of renewable energy equipment and low prices for conventional energy are not encouraging potential investors. Benin has several local experts in the field of renewables, mostly in technical departments, universities and research centres. There is, however, a need for technical cooperation in the energy sector.

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References

GEF (2009) Project proposal to the GEF Trust Fund. Available at: http://www.esmap.org/sites/esmap.org/files/5.%20Benin_GEF_EE_Project.pdf [Accessed 5th September 2013]

Dominguez-Torres and Foster (2011): Benin’s Infrastructure: A Continental Perspective Available at http://www.infrastructureafrica.org/system/files/Benin%20country%20report.pdf [Accessed 5th September 2013]

AFDB (2011): Benin Project For The Electrification of 17 Rural Centres Available at http://www.afdb.org/fileadmin/uploads/afdb/Documents/Evaluation-Reports/Benin_%20Project%20Performance%20Evaluation%20Report_%20web.pdf [Accessed 5th September 2013]

Nicolas Müller (2011): Piloting greater use of standardised approaches in the Clean Development Mechanism Available at: http://www.perspectives.cc/typo3home/groups/15/DFID/Piloting_greater_use_of_standardised_approaches_in_the_CDM_Phase_2_report.pdf [Accessed 5th September 2013]

IEA (2009) Share of Total Primary Energy Supply- Benin. Available at: http://www.iea.org/stats/pdf_graphs/BJTPESPI.pdf [Accessed 5th September 2013]

Energici (2010) Benin Available at: http://www.energici.com/energy-profiles/by-country/africa-a-l/benin [Accessed 5th September 2013]

Assogba (2009) Country Chapter: Benin, Produced by GTZ on behalf of the Federal Ministry for Economic Cooperation and Development, Germany. Available at: http://www.giz.de/Themen/en/dokumente/gtz2009-en-regionalreport-westafrica-gesamtpublikation.pdf [Accessed 5th September 2013]

Global Environment FFacility (2011) GEF Funds Benin Energy Efficiency Project Press Release, Available at: http://www.thegef.org/gef/node/2207 [Accessed 5th September 2013] Close References