Senegal Turns to Domestic Gas in Push to Cut Electricity Costs by Up to 30%

Senegal plans to increase the use of domestically produced natural gas in electricity generation as part of a wider strategy aimed at lowering energy costs and reducing the country’s exposure to expensive imported fuels.

Energy Minister El Hadji Abdourahmane Diouf told Reuters that the government’s priority is to lower the underlying cost of electricity through domestic gas development, increased renewable-energy capacity and improvements in operational efficiency.

Turning production into cheaper power

Senegal has moved into a new phase as an oil and gas producer following the start of production at the Sangomar field and the development of the Greater Tortue Ahmeyim LNG project. The Yakaar-Teranga gas field, now licensed to state oil company Petrosen, is also expected to play an important role in domestic supply as well as exports.

The economic test is whether greater domestic production can translate into lower electricity-generation costs for households and businesses rather than functioning primarily as an export industry.

A 30% objective

The government has said it eventually aims to reduce energy costs by around 30%. That objective is expected to involve domestic gas, renewable energy, efficiency improvements and changes to the way energy subsidies are targeted.

Diouf said the government is moving from broad support toward subsidies focused more closely on vulnerable households, public transportation and strategic productive sectors. No specific subsidy reforms have yet been finalised.

Sources

• Reuters: Senegal’s gas production should ease electricity prices