Liberia Energy Situation

Energy situation

In Liberia woody biomass is the primary energy source used for domestic cooking and heating. In 2004, it was estimated that over 95% of the population depends on firewood and charcoal for cooking and heating needs and palm oil for lighting. According to the Central Bank of Liberia (CBL), a total of 14.8 tons of charcoal was produced in 1998. The CBL reported that charcoal production increased to 255 tons in 1999 with about 90% of households using firewood and charcoal as an energy source. The National Charcoal Union of Liberia (NACUL) estimated that charcoal production in Liberia went up to 36,500 tons in 2005. Recent studies estimate a charcoal consumption of 280 tons per day with a value of 43,000 USD or 102,200 tons per year. There are no firm data on firewood consumption in Liberia, but findings from a survey conducted by CSET in 2004 indicate that scarcity of firewood is becoming a serious problem in most parts of Liberia, especially in Montserrado County.Annual consumption of firewood in rural Montserrado County is estimated at 18m3 per household. Forecast for the country estimates an annual increase in demand of about 0.6 m³ per household. Other estimates foresee an annual increase in demand of about 0,43 m³ per person. On the other hand most rural household use firewood that is collected from their immediate surroundings, consisting mainly of dead wood, branches, etc., Although more households are using firewood than charcoal, the number of trees available is so large and the population density is relatively low so that it is reasonable to assume that the collection of firewood does not pose a problem in the short and medium run. The potential for serious environmental damage to wood resources as a result of charcoal production is more severe. 

Modern energy services based on electricity and petroleum products are predominantly used for economic production and transportation. In the household sector, the use of modern energy services consists mainly of kerosene, electricity, and liquefied petroleum gas for lighting, cooking, and entertainment. These are used by higher income households in urban areas.

According to the data of the government, about 10% of urban residents and less than 2% of rural residents have electricity access largely from self-generation using expensive imported fuel. The access rate to public electricity is less than 1%. While LEC served about 2,500 connections in Monrovia as of 2010, the baseline study carried out by Norad estimates that close to 90,000 households and businesses in Monrovia may be served by small diesel generators.

Charcoal production and commercialization are entirely run by private operators and community-based organizations. Most electricity is generated by private petrol or diesel generators. The private sector is expected to provide the bulk of the planned electricity generation capacity development for the medium term.

Energy Supply

Electricity

The installed generation capacity is 23 MW of Diesel power, all situated in or near the capital Monrovia. There is no generation capacity outside of Monrovia beyond privately-owned generators and scattered donor-funded pilot projects. A number of Government agencies, community organizations and private sector establishments in rural locations in several counties have been able to receive diesel generators and solar power systems through USAID, the United Nations Development Programme, and some NGOs. Data on the energy supply outside Monrovia are scarce. The amount and location of households using solar PV systems in Liberia is not known. According to the RREA, there is no data on biogas or wind energy project identified in the country. Only one small wind turbine has been noticed in Monrovia. Currently, there are no data on the number of people using stand alone diesel plants in the country. With regard to electricity access by household, The Liberia Electricity Company (LEC) has some scattered data on the capitals of the counties. Due largely to expensive diesel production, Liberia has one of the highest public tariffs in the world at $0.48/kWh. This is however lower than the cost of self-generation which is estimated at not less than US $0.75/kWh. The GOL subsidizes the balance of LEC’s costs and is expected to continue doing so during the transition to cheaper medium-term generation options now under active investigation and planning.

Liberia has considerable potential for hydroelectric power. At the onset of civil war there were three (3) operational hydroelectric power plants in Liberia: Harbel (Firestone), 4MW; Mount Coffee (LEC), 64MW; and Yandahun (a community micro hydro in Lofa
County), 30KW. The Mount Coffee and Yandahun plants were destroyed during the war, but the Harbel plant is still operational. A number of feasibility studies were carried over the period 1976-1983. At least 14 largescale schemes were identified in over six (6) main rivers. The Cavalla River has a single largest potential (225MW at Tiboto) but with more than half of this in Cote d’Ivoire, bilateral cooperation is required for its development. Similarly, the Mano River, with the potential of up to 180MW, has nearly a quarter of its basin in Sierra Leone2. However, since four (4) of the six river basins are within Liberia’s borders, they could be developed. The major drawback is that all suffer from the problem of low-head flow, requiring huge investment in storage or reservoir to maintain firm capacity during the dry season. About 24 other sites have been identified for small hydroelectric schemes (up to 5 MW). In 1988, the Liberia Electricity Corporation (LEC) sought investment capital to develop six mini hydro schemes with total installed capacity of about 20 MW, which was intended to supply three (3) rural grids serving 14 major population centers in the
northern half of Liberia. 

Biomass

With some 60% of the land is covered with forests (5.7 million hectares, FRM 2004), there is certainly no lack of trees in Liberia. There are 11 designated National Forests in the country (under limited protection), and two legally protected areas, Sapo National Park (approximately 149,000 ha) and East Nimba (about 15,000 ha). The FDA, Forest Development Authority has the exclusive rights to manage forest resources and focuses on large-scale concessions for timber extraction.
The US national Renewable Energy Laboratory (NREL) recently studied biomass resources (other than forestry) in Liberia with a view how these resources could be used for energy purposes. NREL also indicated that the potential annual waste stream from logging operations - once they restart - could be very substantial, with an estimated 20 million m3 available (162,645 TJ/year), of which 10.9 million m3 at sawmills and the remainder at the logging site; most of that waste would be lost. The annual waste at the sawmills would be able to produce 100 million bags of charcoal, if all waste were convertible into charcoal; this is much more than is currently used in the country.
NREL further estimates that of the total cropland in Liberia, 37% of the territory, only 6% is currently cultivated. The remaining cropland amounts to some 3 million hectares, indicating that in addition to existing resources, there is a large potential for new crops including tree crops that could yield resources suitable for charcoal production.
Large-scale rubber plantations (>800 ha) in Liberia today cover an area of approximately 58,000 hectares, some of which are in close vicinity of Monrovia; more land used to be under rubber trees as well: NREL estimates about 100,000 ha in total. Buchanan Renewables indicated that the area currently under rubber trees (all types of plantations combined) would be more like 250,000 ha, of which possibly one-third should be renewed soon. There are also smaller rubber plantations (5-800 ha), but these are generally perceived to have newer trees on their estates. In addition, there are numerous household plantations below 5 ha each.
An active rubber plantation annually generates considerable amounts of wood residues from pruning and replanting activities, and charcoalers are known to use this for making charcoal. Trees need replacement after 25-30 years when these cease to be productive; approximately 81 dry tonnes of wood (trunks, branches) can be obtained per hectare of old trees (about 180 m3 of green wood).
Oil palm trees are abundant in the coastal regions, on family plots, in the wild, and on abandoned plantations (30,000 ha). Most trees are at the end of their productive life. It is unknown if old trees are converted into charcoal.
The average household farm is 1.2 ha, and 6% of the 353 thousand farms have coconut trees as a cash crop, 13% have oil palms, and 32% cacao trees. It is not know to what extent these trees contribute to charcoal production, but it is certain that it cannot be ignored.

Energy Consumption

Electricity

Estimates of the current level of electricity demand range from 11 to 25 MW. While Liberia’s First State of the Environment Report forecasts that the demand for electricity will rise an average of 10.3% annually by 2010, and then decrease slightly to a 3.4% growth annually until 2020, a recent demand forecast by the International Finance Corporation (IFC) projects total demand for Monrovia and its environs of 19 MW by 2010, 34 MW by 2015, and 41 MW by 2020. For a variety of reasons, it appears that these forecasts are very conservative. The actual demand for Liberia, including the various concessions, is likely to be in excess of 350 MW by 2020, for the following reasons:

• Liberia’s population, estimated at around 3.5 million from the provisional results of the 2008 census, has been growing at an average annual rate of 2.1%. Over 53 percent of the population is under 18 years of age. With a large pent-up demand for consumer goods and services as evidenced by previous levels of demand and rising incomes, demand for energy used in the production of these goods will increase as the population rises.
• Since pre-conflict electricity capacity exceeded 400 MW, it seems likely that at some point the economy will begin to take off and very quickly reach previous levels of capacity. Industries which are large consumers of energy are only now looking at Liberia for opportunities to re-invest. Cement processing, rubber processing, breweries, and other factories and industrial operations have a huge demand for power. Prior to the civil conflict, the iron ore industry consumed about 210 MW of electricity. Although none of these former mines are currently in operation, the Government has prioritized their re-opening in the short to medium term, beginning with a recent concession agreement with ArcelorMittal for one of the former mines. The next two concessions for the Western Cluster iron ore deposits and the Old Bong Mines will be awarded soon. Furthermore, aggressive mineral exploration and resource appraisal programs for additional iron ore deposits are underway. The prospects for new hard rock mines for minerals such as gold, diamonds, uranium, and bauxite are very promising. The demand for energy for these operations in the medium and long term will be very significant, and without a strong Government energy policy, the requisite power to fuel these mining operations will not be developed.
• The agriculture sector, although mostly artisanal at present, has a high demand for energy services. Agro-based concessions, such as rubber and other mechanized activities, produce electricity for their own consumption. Demand for energy in agriculture in the short, medium, and long term will be significant.

 Almost 74% of Liberia’s population resides in rural areas, while the remaining 26% live in and around the urban center of Monrovia. Rural households expend a significant amount of their meager incomes on inferior forms of energy such as candles, flashlights, and kerosene or oil lanterns for lighting. Higher fuel costs result from long transportation distances, fragmented delivery systems, and absence of economies of scale.

Biomass

The most recent Census (2008 data, published in 2009) shows that 70% of the urban population use charcoal for cooking and 5% of the rural population; 91% of the rural population use firewood for cooking and 21% of the urban population. In Monrovia, the percentage of households using charcoal is even higher, 85%.

 

Energy Policy, energy strategy

The Government of Liberia (GOL) is considering energy access to the population, particularly to the previously neglected rural poor a cornerstone of its policy.The GoL published in 2007 a Renewable Energy and Energy Efficiency Policy and Action Plan. In the document the government outlines its policy build and increase the application of renewable energy and energy efficiency technologies in Liberia by promoting investment, technology transfer, market development and local capacity building. In 2009 a National Energy Policy (NEP) was formulated which further developed the ideas of the Policy and Action Plan. NEP defines as principal objective of the national energy policy to ensure universal access to modern energy services in an affordable, sustainable and environmentally-friendly manner in order to foster the economic, political, and social development of Liberia. In addition, the GoL declares its intention to drive Liberia towards a carbon neutral economy by 2050. Short term objectives of the policy are that by 2015:

40% of Liberian citizens living in rural and peri-urban areas and using traditional biomass for cooking shall have access to improved stoves and kerosene or efficient-gas cookers in order to reduce indoor pollution;
30% of the urban and peri-urban population shall have access to reliable modern energy services enabling them to meet their basic needs (lighting, cooking, communication, and small production-related activities);
15% of the rural population and 25% of the schools, clinics, and community centers in rural areas shall have access to modern energy services to meet the same basic needs.
The GOL expects to achieve its access goals for 2015 while reducing greenhouse gas emissions by 10%, improving energy efficiency by 20%, raising the share of renewable energy to 30% of electricity production and 10% of overall energy consumption, and increasing the level of biofuels in transport fuel to 5%.

The NEP is considered a key contribution to the poverty reduction policy of the government as outlined in the Poverty Reduction Strategy (PRS). Poverty reduction is built on four pillars – (1) consolidating peace and security; (2) revitalizing the economy; (3) strengthening governance and the rule of law; and (4) rehabilitating infrastructure and delivering basic services.

 

 

 

Important Laws and Regulations

Institutional set up

Ministry of Lands, Mines and Energy (MLME): The key roles and responsibilities of the Ministry especially the Department of Energy (DoE), among others, are to facilitate the provision of energy to the domestic, commercial and industrial users by public enterprises and the private sector, through the development of an efficient regulatory, planning and implementation framework. It also reorientates the approach to rural electrification emphasising informed community choice, sustainability and containment of Government subsidy to achieve greater penetration of electrification into rural areas. Furthermore, to research and promote the development of local energy resources such as Hydro-power, biomass, solar, wave and wind energy; and promote energy conservation measures which improve both technical and economic efficiency in energy use.

Rural and Renewable Energy Agency (RREA): The RREA is the agency dedicated to the commercial development and supply of modern energy services to rural Liberia with emphasis on utilizing available local renewable energy resources. The RREA’s mandate includes integrating energy into rural development planning; promotion of renewable energy technologies; facilitating delivery of energy products and services through rural energy service companies (RESCOs) and community initiatives; and facilitating the funding of rural energy projects including managing a Rural Energy Fund (REFUND). The REFUND aims to provide for the coordinated and sustainable financing of projects and programs for the delivery of modern energy services for rural development. REFUND is intended to become the channel through which all domestic and international financial resources intended for rural energy delivery in Liberia shall be managed. REFUND’s main distinction from other funds is the focus on economic viability, including environmental and social benefits, regardless of financial viability. Prioritization of projects on the basis of economic viability will ensure that the income-generation programs supported by initial investments will be able to contribute financially to subsequent projects. However, also demographic and geographic criteria will be considered in order to ensure growth with equity. Where projects are of the same order of economic viability, preference shall be given to those serving more people. Where the projects serve approximately the same number of people, preference shall be given to those serving more than one village, district, or county.  The REFUND will mobilize funding for rural and renewable energy services through the following mechanisms:
1. Domestic – Energy taxes, levies, and fees; general taxes; user fees and capital contributions; voluntary corporate social responsibility contributions.
2. International – Traditional bilateral and multilateral loans and grants; carbon finance.
The three main uses of the REFUND will be:
1. Capacity building – This will be based on grant funding and includes support for the operating budget of the RREA, marketing and promotion of renewable energy technologies, and technical assistance (research and development, feasibility studies, business planning, training and development, etc.).
2. Project and consumer finance – This includes provision of grants to match community contributions for approved rural and renewable energy projects and programs; provision of subsidized loans for projects that cannot be funded through commercial financial services; provision of consumer loans through micro-credit financial institutions.
3. Risk management – This includes provision of partial or full guarantees for approved rural and renewable energy projects and programs that can be funded through commercial financial services but where the project promoters do not have the collateral needed.

The focus of the existing working team of RREA is on sustainable solar market packages (SSMP). In additon it is planned to work out a Rural Energy Master Plan, which will provide a prioritized development program to achieve universal energy access. Together with a Grid Development Master Plan, the country’s long-run marginal cost can then be derived to serve as a strategic planning guide.

Energy Regulatory Board (ERB): ERB approves the tariffs and prices set by the operators. The general policy is that energy services should be provided on a full cost-recovery basis to those who are able to pay and on a targeted subsidized basis to those who can only afford to pay a portion of the cost.The Government intends to establish a regulatory process for monitoring all costs – economic, financial, social, and environmental – and allocating these to the user (rate payer or polluter) or public (taxpayer) as appropriate. 

Bureau of Standards: is responsible to establish standards to ensure accuracy of meters and gauges, product safety, security, reliability, consistency, purity, and availability as well as timeliness in responding to stakeholder service requests.

Liberia Electricity Company (LEC): The utility is managed by a joint venture between Manitoba Hydro International and Kenyan Power and Light Corporation based on a 5-year Management Contract (MC) that started on July 1st, 2010.  The management is supervised by a Board that is supported by NetGroup (RSA) in its monitoring and supervisory role. The MC incorporates a results based financing component. It includes performance fees and penalties for over and under performance, respectively, on key indicators. In addition, reduction/increases in operational costs will lead to performance/penalty fees.

A key aspect of the MC is that the target indicators were to be based on the initial (tentative) commitments from donors for
investment contributions, totaling $53million over the 5 years. Thus, the Operator has a strong incentive to use donor contributions
effectively and achieve improved results. In addition, the World Bank has committed some $2million per year in OBA financing. Further to the performance indicators, the Operator is required to carry out a range of training activities and has rather
extensive reporting requirements. Performance indicators include: 

reduction of technical and non-technical losses from 23% to 12%, generation efficiency, increase of the billing and collection rate from 94 to 97%, removal of illegal connections/networks and correction of metering discrepancies and to connect additional 10000 customers.

 

Activities of other donors

Main energy programmes/activities in the past:

In 2006 soon after the inauguration of the President, the Emergency Power Program (EPP) was designed to re-establish public power supply as part of the Government’s political stabilization and economic reconstruction program. Several international partners, including the United States Agency for International Development (USAID), Ghana, Norway, the European Union, and the World Bank provided over US $40 million in grant funding and technical assistance. As a result of EPP, power generation based on diesel providing 9.6 MW, 80 km of transmission and distribution network were restored, 1,000 street lights installed and over 2,500 customers in Monrovia served.  

 

1. Emergency Power Programme (EPP). Main features:

• USAID, EU, NW, WB funded
• Focus: Technical Assistance to Liberia Electricity Corporation to kick-start power production (
• Some support to infrastructure (grid rehabilitation) and running costs of power generation
• EPP is currently running out

As a result of the emergency power program (EPP),  basic services to parts of the city, including the 2,500
connections supplied by some 10MW of diesel power (until end of 2010) were restored. As a next step power generation was  increased to 23MW with 10MW financed by USAID and 3MW by Norway

2. LEAP (Liberia Energy Assistance Programme), USAID

Main areas of support:

• Continued support to LEC, e.g. on prepaid meter systems
• Implementation of social PV (health centers, schools…)
• Support to the establishment of a Rural and Renewable Energy Agency (RREA) and a Rural Energy Fund (REF)
• Development of a National Energy Policy (NEP)

New Energy Programmes

1) USAID – New Renewable Energy Programme:

• $24mio over 4 years; $4mio into power generation; $4mio into institutional support for implementation of NEP
• Focus:
  • (community-run) MHP
  • Biomass (residue use)
    o Potentially hybrid systems of MHP and biomass gasification as rivers dry up in dry season
• Long-term TA has been contracted and is expected in country in June 2010
• Like-wise, the first workplan is expected for June 2010
  • Apart from long-term activities, there will be initial short-term TA (baseline studies etc.?)
  • Concrete details will become clearer once TA is in-country

2) World Bank:

The World Bank has committed $3.4mio in support of RREA and the implementation of NEP components through RREA. Activities include:

• Development of a business plan for RREA  
• Restructuring of Energy Dpt in Min of Lands, Mines and Energy
• Restructuring of and management contract for LEC
• Setting up an Energy Regulatory Board
• Restructuring National Oil Company in view of potential oil extraction in Liberia
• Implementation of pilot projects to be implemented by RREA (funded by WB)
  • 35kW MHP 
  • 2 social PV projects => Training for maintenance on PV with objective to build up capacities in-country
• Rural Energy Masterplan: RREA has applied for EF II funding (1.5 mio) to carry out this plan

In addition, the WB has lauched a rehabilitation project for Yandohun’s micro-hydropower plant with financing from the Dutch Trustfund under its AFREA program. The project is scheduled to be completed in 2012.

10MW financed by USAID and 3MW by
Norway