Côte d'Ivoire's electricity challenge in 2050: Reconciling economic development and climate commitments

Highlights

• We develop a TIMES model of the electricity sector for Côte d'Ivoire that provides least-cost solutions for power systems.

• Our estimates show that electricity demand could increase by a factor of 4.5 by 2050.

• Least cost solutions show that solar PV could provide at least 18% of total electricity generation in 2050.

• A carbon price of US$21 in 2035 to US$82 in 2050 ensures that the electricity mix will be compatible with climate goals.

• In the case of a low-cost solar scenario, PV capacity is up to 24 GW and storage is nearly 15 GW between 2030 and 2050.

Abstract

In closing its economic gap with emerging markets, Côte d’Ivoire will face a substantial increase in electricity demand over the next three decades. Côte d’Ivoire has signed the Paris Agreement that aims to achieve a balance between anthropogenic emissions by sources, including electricity, and absorption by sinks of greenhouse gases in the second half of the century. This This paper develops a forward-looking tool to explore electricity technology investment paths compatible with both rapidly increasing electricity demand and the Paris Agreement. We build a TIMES model for Côte d’Ivoire and run scenarios with two sets of reasonable assumptions that represent two competing, and probable visions of the future costs of coal and photovoltaic technologies. The results show that a carbon tax of about US$21 in 2035 and US$82 in 2050 on electricity generation will ensure low-carbon electricity generation in line with the Paris Agreement. Although a low-carbon energy mix would create significantly more jobs, the two main challenges in achieving this energy mix will be to install as much as 24 GW of photovoltaic power by 2050 or to achieve a socially accepted carbon tax.

Introduction

Like many developing countries, Côte d’Ivoire suffers from a lack of electricity infrastructure. The development of this sector is one of the country's main priorities in order to achieve political objectives such as universal access to electricity and economic development. Between 2000 and 2018, the installed electrical capacity almost doubled from 1.2 GW (50% hydropower and 50% thermal energy) to 2.2 GW (40% hydropower and 60% thermal energy). In the same period, annual consumption per capita went from 174 KWh to 277 KWh (AIE, 2014; A NARE-CI, 2017). However, as of 2014, per capita consumption in Côte d’Ivoire is 43% lower than the average for sub-Saharan Africa and 91% lower than the world average.

Frequently updated ten-year electricity sector master plans (ANARE-, 2017, WAPP, 2011, WAPP, 2018) and available forecast (IRENA, 2013, IRENA, 2018) focus on a 2030-2035 time horizon. IEA (2019) provides two electricity mixes up to 2040 but with few details. According to WAPP (2018), the planned capacity is expected to increase by 1,880 MW in 2030, of which 37% would be coal-fired power plants and only 5.3% would be photovoltaic solar power plants. This development mimics China's emerging strategy in the early 2000s. However, the current context is different in four respects. First, Côte d’Ivoire's natural endowment of inputs for coal-fired power plants is negligible, making the country dependent on imported resources. Second, as highlighted in Diallo and Moussa (2020), Côte d’Ivoire's high natural endowment of solar radiation enables the country to reduce the cost of solar technology compared to the rest of the world, including China. Moreover, the authors show that this advantage makes the solar home system a viable option for rural electrification in Côte d’Ivoire. Third, unlike in the 2000s, the current costs of renewable energy and its prospects are competitive. Fourth, the fight against climate change has become a top priority at the international level. For these reasons, this paper will pay particular attention to coal and solar energy technologies.

African Development Bank, 2011 projections show that long-term real GDP growth in West Africa, including Côte d’Ivoire, could exceed 4.6% over the period 2020–2050 and reach 8.8% in the 2020s. These high real GDP growth projections are fairly consistent with the International Monetary Fund, 2019's short-term projections, which range from 7.3% in 2020 to 6.4% in 2023.¹ In addition, the population size will almost double from 26 million to 51 million according to the medium fertility variant of the United Nations (2019)'s projections. Both real GDP and prospects for population growth will significantly boost electricity demand over the next three decades, and beyond.

In 2015, the African Union Commission (AUC), of which Côte d’Ivoire is a member state, issued Agenda 2063 (2015). This publication calls on AUC member states to act with a sense of urgency on climate change and the environment by participating in global efforts to mitigate climate change. In addition, Côte d’Ivoire ratified the Paris Agreement in 2015, which crystallized its commitment to climate action. According to its National Determined Contribution (NDC) of 2015, the share of green energy in the electricity mix is expected to reach 42% and greenhouse gas (GHG) emissions from this sector are not expected to exceed 9.2 Gt of CO₂eq in 2030.² To date, Côte d’Ivoire has not made any other quantitative commitment beyond 2030. This document aims to highlight public policy actions to align the two challenges: a substantial long-term increase in electricity demand and a low-carbon economy.

The set of investment decisions that a public planner faces in a given circumstance is limited by the decisions that previous officials made. This situation of path dependency is particularly true for the electricity sector, where the life of investments can be as long as 35–40 years, i.e. a supercritical coal-fired power plants. These sustainable technologies require generations of highly skilled engineers, specialized in the operation of particular technologies. Potential technological and human bottlenecks could be obstacles to achieving specific goals such as climate commitments. Therefore, it becomes essential to balance short-term decisions with a long-term perspective to address the challenges of sustainable development.

In order to reconcile the above-mentioned horizons and challenges, we have built and calibrated The MARKAL-EFOM integrated system (TIMES) for Côte d’Ivoire. This energy planning model selects an optimal mix of technologies to meet a given demand at minimum cost. To our knowledge, this is the first time this model has been applied specifically to Côte d’Ivoire. The main arguments for and against our choice of a technology-oriented model are as follow. TIMES is a bottom-up modeling approach of the energy system, and such models have well-known limitations.³ Yet technology choices are critical when it comes to energy systems, and bottom-up models offer unique insights into the articulation and competition between existing and future technologies that cannot be adequately captured by an analysis of past trends. Furthermore, optimization models do not predict the future of a system, but they do offer the ability to evaluate how a given technology pathway can be ideally adapted to meet new constraints.

This paper adopts a scenario approach to assess future transformations of the Côte d’Ivoire's power system. We develop scenarios using two sets of reasonable assumptions that represent two competing visions of future costs, particularly for coal and photovoltaic technologies. We also apply environmental restrictions to assess the socio-economic challenges of the power sector in Côte d’Ivoire to meet the long-term climate commitment. We then complete our forward-looking assessment with a sensitivity analysis for selected parameters.

The rest of this paper is organized as follows. Section 2 presents the model and its assumptions, Section 3 discusses the scenarios and the results, Section 4 presents a sensitivity analysis of our results, and Section 5 concludes.