Can the regulation of renewable energy in Cameroon help to reduce the energy deficit in the country?

CAN THE REGULATION OF RENEWEABLE EN- ERGY IN CAMEROON HELP TO REDUCE THE

ENERGY DEFICIT IN THE COUNTRY?

University of Eastern Finland Law School

Master’s Thesis

Ndi Boniface Eyabezoh 285282 30.9.2018

Supervisor: Seita Rompannen &

Tuula Honkonen

Abstract

UNIVERSITY OF EASTERN FINLAND

Faculty

Social Sciences and Business Studies

Unit

Law School Author

Ndi Boniface Eyabezoh Name of the thesis

Can the Regulation of Renewable Energy in Cameroon help to reduce the energy deficit in the country?

Major

Environmental and Climate Change Law

Description Master’s thesis

Date Pages

Abstract

Energy is an important part of every country and it is inextricably linked to other sectors of the economy. Many sub-Saharan African countries are experiencing an energy deficit where the demand for electricity is greater than supply. Access to clean and affordable energy is therefore important for many of these countries. This thesis takes a look at the regulation of renewable energy in Cameroon. It analyses the current legislative framework regulating renewable energy in Cameroon alongside making some comparative analysis with the promotion of renewable energy in the European Union. It also makes some rec- ommendations on what can be done in reducing the energy deficit and increasing access to electricity of many Cameroonians.

Key Words

Energy, energy deficit, Cameroon, electricity, renewable energy, access to electricity

TABLE OF CONTENTS

Abstract

TABLE OF CONTENTS

REFERENCES

ABBREVIATIONS

TABLES AND FIGURES

CHAPTER 1. INTRODUCTION

1.1 Background ... 1

1.2 Objective and research Questions... 7

1.2.1 Objective ... 7

1.2.2 Main Research Question ... 7

1.2.3 Sub Research Questions ... 8

1.3 Research Method ... 8

CHAPTER 2. THE ENERGY DEFICIT PROBLEM

2.1 Definition and Scope ... 10

2.2 Causes of the Energy Deficit Challenge in Cameroon ... 12

2.3 The Importance of Renewable Energy Development... 14

2.4 Renewable Energy Potentials ... 20

2.4.1 Hydroelectric ... 20

2.4.2 Solar ... 21

2.4.3 Wind ... 22

2.4.4 Biomass ... 22

CHAPTER 3. THE REGULATORY FRAMEWORK OF RENEWEABLE ENERGY IN CAMEROON

3.1 Regulatory Actors in the Electricity Sector in Cameroon ... 24

3.2 Analysis of the Electricity Sector Regulatory Framework ... 30

3.2.1 The 1998 Electricity Law ... 30

3.2.2 Analysing the 2011 Electricity Law ... 33

3.2.3 Discussing the Strength and Weaknesses of the 2011/022 law ... 41

3.3 Other Benefits of the Law ... 43

CHAPTER 4. WHAT LESSONS CAN BE LEARNED FROM THE EUROPEAN UNION LAW ON THE PROMOTION OF RENWEABLE ENERGY

4.1 EU Legislative Framework for the Promotion of Renewable Energy and how the Cameroonian Legislation can be modelled after it ... 47

4.1.1 Possibilities and Restrictions ... 48

4.1.2 What Can Cameroon benefit?... 49

CHAPTER 5. RECOMMENDATIONS ON HOW TO PROMOTE RENEWABLE ENERGY TO HELP REDUCE THE ENERGY DEFICIT IN CAMEROON

5.1 Progress Made So Far ... 58

5.2 Recommendations ... 61

5.2.1 Regulatory ... 61

5.2.2 Financial and Market ... 62

5.2.3 Research and Development ... 66

5.2.4 Energy Efficiency and Information Dissemination ... 67

5.2.5 Cooperation ... 69

CHAPTER 6. CONCLUSIONS

REFERENCES

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ABBREVIATIONS

ADB African Development Bank AER/REA Rural Electrification Agency

ARSEL Electricity Sector Regulatory Agency CDM Clean Development Mechanism

CEMAC Central African Economic and Monetary Community

EU European Union

EDC Electricity Development Corporation FIP Feed in Premium

FIT Feed in Tariffs

GDP Gross Domestic Product

MINEE Ministry of Water Resources and Energy MW Mega Watt

NDC Nationally Determined Contributions

NEEPSAP National Energy Efficiency Policy, Strategy, and Action Plan

PDER Rural Electrification Master Plan PDSE Energy Sector Development Plan PRSP Poverty Reduction Strategy Paper

RECP Renewable Energy Cooperation Program REEEP Renewable Energy and Energy Efficiency Partnership

RISE Regulatory Indicators for Sustainable Energy ROGEP Regional Off grid Electrification Project SDG Sustainable Development Goals

SEAR State of Electricity Access Report

SONATREL National Electricity Transmission Company SONEL National Electricity Company

UNEP United Nations Environment Program UN United Nations

UNFCCC United Nations Framework Convention on Climate Change

VAT Value Added Tax

TABLES AND FIGURES

Figure 1. Electricity generation by sources in Cameroon 2013.

Figure 2. Sectoral electricity consumption in Cameroon 2014.

Figure 3. Solar Irradiation in Cameroon.

Figure 4. Schematics of existing and emerging regulatory priorities.

CHAPTER 1. INTRODUCTION

1.1 Background

In the international community, it is widely accepted that access to modern energy is a nec- essary requirement for alleviating poverty and increase the economic growth of a country.¹ Without a sound and reliable energy system, it is often difficult to create employment, erad- icate poverty and support human development. In every nation, energy is an important sector that intertwines with other sectors of society,² because of this importance, the United Nations (UN) included sustainable energy as goal number seven in the UN’s 2030 Sustainable De- velopment Goals (SDG), to ensure access to sustainable, affordable, relaible and modern energy for all.³

Therefore, planning to increase access to energy or reducing the energy deficit should be an integral part of nation planning to improve on the economic situation of the country and also achieve the UN SDGs. It is no secret that the rate of access to electricity in poor countries is very low and according to the 2017 World Bank Sate of Electricity Access Report (SEAR 2017), Sub Saharan Africa ( countries that lie south of the Sahara desert; Cameroon, Nigeria, Ghana, Chad, Senegal, Ethiopia, Central African Republic etc) has the lowest electrification rate in the world with about 62 percent of its population not having access to electricity.⁴ The people in this region often rely on solid biomass (fuel wood) and kerosene for cooking and heating which results to high levels of indoor pollution and is often associated with high rates of mortality especially for women and children who are more exposed to this pollution.⁵ Africa is rich in energy resources but poor in its capability to exploit and use them.⁶ Came- roon for example has about 20 million hectares of forest cover,⁷ and people often cut down forest vegetation to be used as fuel wood for cooking food. This can sometimes lead to en- vironmental problems such as deforestation and biodiversity loss.⁸ Moreover, the problem

1 International Energy Agency 2017, p 20.

2 Ibid

3 Transforming our world: The 2030 Agenda for Sustainable Development, UNGA Res 70/1 of 25 September 2015.

4 World Bank State of Electricity Access Report 2017, p. 16

5 Ibid

6 United Nations Environment Program 2017, Atlas of Africa Energy Resources.

7 The REDD Desk 2013, country profile Cameroon.

8 Maria et al 2015 Global Ecology and conservation 2015, p. 200, 201

of climate change means that most of these Sub Saharan African countries who mostly rely on hydroelectricity have to diversify their energy sources. The average person living in Sub Saharan Africa consumes as little as 200k Wh/year as opposed to 1,442k Wh/year in North African countries and 4,148k Wh in South Africa.⁹The situation is much worse in rural areas where people consume lesser amount of electricity. In perspective, the average person con- sumes in one year considerably less electricity than what a fridge does consume over the same period of time in the United States.¹⁰

These countries must therefore introduce other sources of renewable energy into their energy mix to make it more sustainable and reliable. Most of the countries in this region have been blessed with abundant renewable energy potentials, it is therefore left for these countries to open up their energy sectors and legally make way for the development of other renewable sources of energy. This will go a long way to increase the rate of access to sustainable energy and reduce the energy deficit in the region.

Energy deficit refers to the situation where demand for energy (Electricity) is far greater than supply. There are about 600 million people without access to electricity in sub Saharan Af- rica, significant and sustained investment is required across Africa’s entire generation and supply value chain.¹¹ Economic development and poverty eradication is a priority in most of these countries and this can mostly be achieved by setting up legally sound laws and policies to encourage the development of other sources of energy and not rely entirely on one. The governments of these countries therefore have a crucial role to play in securing the energy futures of their countries and reduce the energy deficit. Such roles might include the long- term commitments of governments to the goal of reducing energy deficit and increasing access to clean and modern energy, the developments of institutions and regulations to fa- cilitate the development of new forms of energy supply and maybe some financial incentives to households or subsidising energy to increase affordability in households. This thesis looks into the case of Cameroon, focusing on trying to analyse the governmental regulations put

9 Hafner – Tagliapietra – Strasser 2018, p. 2

10 Ibid

11 Van Tonder EE publishers 2018, Addressing Africa’s Energy Deficit.

in place to promote renewable energy and increase access to electricity thereby reducing the energy deficit in the country.

The Republic of Cameroon is a Sub Saharan African country that lies within the Gulf of Guinea, bordered by Nigeria to the west, Chad to the north, Central African Republic to the east and Congo, Gabon, Equatorial Guinea to the south.¹²English and French are the official languages and it has a population of about 25 million inhabitants,¹³of which 58 percent live in urban areas with an urbanisation rate at 3.3 percent between 2010 and 2015.¹⁴This makes Cameroon the most populous nation in the central African sub region of Central African Economic and Monetary Community (CEMAC) and covers a total surface area of about 475,440km2. According to a 2017 African Development Bank (ADB) Report on Green Mini Grid market development program in Cameroon, since 2010, the country’s GDP has grown at an average of 5 percent per year and GDP per capita is estimated at US dollar 1,407.

Economically, the country is a power house within the CEMAC zone with its capital Ya- oundé, being one of the largest cities in the sub region

Cameroon has enormous renewable energy potentials such as solar, wind, biomass, and ther- mal energy potentials,¹⁵ and like many other African countries, suffer from an energy deficit problem. The country has a growing economy with rapid electricity demand which the power generators and distributors cannot fulfil. The US Power Africa Fact Sheet of 2016 puts the national rate of access to electricity in Cameroon at 55 percent while the rate is 17percent in rural areas.¹⁶ The residential sector contributes most to primary energy demand. Energy ef- ficiency is not represented heavily in national energy legislations and policies. Persistent energy scarcity has limited the country’s economic growth and prevented it from attaining social and other development goals.¹⁷ The country therefore suffers from an energy deficit and by energy deficit, we relate to the lack of reliable and adequate power supply to homes, firms and service providers.¹⁸

12 Wirba et al Renewable and Sustainable Energy Reviews 2014, p. 560

13 Countrymeters 2018, Country Profile Cameroon.

14 Abanda Renewable and Sustainable Energy Reviews 2012, p. 4558

15 Wirba et al Renewable Energy 2015, p. 560

16 USAID Cameroon 2016, Power Africa Fact Sheet.

17 Nkiruka et al OXFAM Research Backgrounder 2017, p. 8

18 Power People Planet, Africa Progress Report 2015, p. 15

The energy deficit here can also be referred to the demand and supply mismatch where de- mand for electricity is always greater than supply as earlier mentioned. The Cameroonian government came out with a plan to make the country become an emerging nation by 2035 by enacting the vision 2035 action plan.¹⁹ For these plans to materialise, energy sufficiency and access to electricity are some of the key issues that need to be addressed.

Cameroon at the moment has no overt energy policy, nor a national policy focusing on re- newable energy.²⁰Several attempts have been made to come up with a legislative and policy overview to govern the energy sector. There is no particular legislation on renewable energy in Cameroon. The lack of a clear-cut legislation on renewable energy makes it very difficult to formulate a long-term plan for the energy sector. The country strongly needs an open and effective legislative and regulatory framework to fulfil its long-term goal in developing the renewable energy sector. Openness here means the law is applicable to everyone with well- defined rules applicable to all stages of electricity generation and supply. Effectiveness here refers to the fact that the law is followed and applicable to every individual in the energy sector with specific and clearly defined rules applicable by the courts and other energy sector regulatory agencies. The presence of a renewable energy legislation will clearly help all par- ties in the energy sector (both government and private investors) in setting out policies to harness the renewable energy potentials in the country.

The only law which mentions renewable energy is Law No 2011/022 of 14 December 2011 Governing the Electricity Sector in Cameroon. Its pat IV spells out general goals for pro- moting renewable energy and energy efficiency and also the use of renewable energy to expand rural electrification. There was also Law No 98/022 Governing the Electricity Sector of December 1998, which was the first law created to govern the electricity sector and it led to the creation of the Electricity Sector Regulatory Agency (ARSEL) and the Rural Electri- fication Agency (REA) in charge of the follow up and use of primary energy sources for rural electrification. There is also the Ministry of Water Resources and Energy (MINEE)

19 Cameroon Vision 2035 working paper 2009.Working Paper for policy makers.

20 Abubakar et al Renewable and Sustainable Energy Reviews 2015, p 783.

which is also in charge of formulating legislative and policy frameworks for the energy sec- tor.

The energy sector of a country is very important for its economic growth. Therefore, Cam- eroon cannot make forward economic steps if the country continues to suffer from a high rate on lack of access to electricity, constant power shortages and blackouts. This hinders the development of businesses that rely on electricity and also deters foreign investors who are looking to invest in energy intensive sectors of the economy. The government has taken some steps over the years to open up the energy sector which led to the enactment of certain legislations (Law no 98/022 and Law no 2011/022) and also created government agencies (under the control of the Ministry of Water Resources and Energy) to regulate and help at- tract foreign investment into the energy sector. Energy has also been mentioned in some of the governmental plans for the long-term economic development of the country such as in the Poverty Reduction Strategy Paper (PRSP) and also the in the country’s Vision 2030.

However, it must be said that these changes and developments have been very slow and that is why the country is still facing the energy deficit problem as it is today.

It should also be noted that this energy deficit problem is faced by other Sub Saharan African countries. The 2015 Africa Progress Report estimated that energy sector bottlenecks and power shortages cost the region 2-4 percent of GDP annually,²¹ which undermines job cre- ation and investments. Most power Utility companies in Sub Saharan Africa are state owned except for a few countries which have privatised their power utility companies. Governance of these companies is often political with corruption at the core of it. Inefficiency in govern- ance often lead to inefficient output and its often the poor consumers who end up paying the price as they suffer from regular power blackouts. Also, there’s lack of competition in the power sector in most Sub Saharan African countries.

21 Power People Planet, Africa Progress Report 2015, p. 16.

Cameroon needs to learn from other parts of the world that have achieved almost 100 percent access to clean, affordable and reliable electricity. This is so because it will be very difficult for the government alone to undertake projects that can electrify the entire country at almost 100%. They therefore need private investors to develop certain parts of the renewable energy sector where the government cannot develop. Renewable energy because the country is blessed with enormous potentials of hydro, wind, solar and biomass sources from which energy can be developed. Moreover, they are clean sources of energy which are not exhaust- ible after a period of time. The Cameroonian legislation to promote renewable energy has some regulatory uncertainties which can deter investors. It should be noted that this area is somehow new to the Cameroonian legislators therefore it is important that we study and learn from an already established and functioning system on the promotion of the use of energy from renewable sources.

Therefore, this work will also look at the promotion of renewable energy in the European Union (EU) and see what Cameroon can learn from the EU legislations on the promotion of renewable energy. The EU because its policy framework to promote renewable energy has evolved over time and has been developed to meet the present-day environmental challenges of the world. The Cameroonian framework should be able to take into consideration the present and future challenges of the country to come up with an efficient legal framework to promote renewable energy to meet up with the present and future energy needs of the coun- try. The EU legal framework sounds like a good one the Cameroonian framework could be modelled after.

This is important because in as much as the country has abundant renewable energy re- sources, they don’t have the capital and technical know-how to develop these resources. The government therefore needs to rely on foreign investors to come and invest in the develop- ment of the renewable energy sources. This will require an elaborate and well-functioning legislation that can make energy produced from renewable sources profitable and this will attract investors as they will be able to invest in renewable energy production in Cameroon which will increase supply of electricity and reduce the current energy gap faced in the coun- try.

1.2 Objective and Research Questions 1.2.1 Objective

The main aim of this thesis is to analyse the relevant legislative and regulatory framework in the context of renewable energy promotion in Cameroon. The purpose of this analysis is to evaluate the applicability of the legislative and regulatory framework,²² in relation to the energy deficit challenge and access to clean energy. This is because, Cameroon is heavily reliant on hydroelectricity for its electricity which so far has not been able to meet the grow- ing demand for electricity thereby resulting to the energy deficit or energy gap where de- mand exceeds supply.

Cameroon has no specific legislation regulating renewable energy promotion. Therefore, this thesis shall analyse the current legislation in place which covers the generation, transmission and distribution of energy in Cameroon which is Law No 2011/022 of 14 December 2011 governing the electricity sector in the country, focusing on its part IV which sets out the general goals for promoting renewable energy as well as energy efficiency, and for the use of renewable energy for the purpose of rural electrification.

1.2.2 Main Research Question

The main research question will be: What is the relevant legislative and regulatory frame- work to renewable energy in Cameroon? This is one of the most important questions which needs to be answered as the thesis seeks solutions to the energy deficit challenge in Came- roon.

22 The legislative framework referring to hard laws while the Regulatory framework referring to a broader concept which also captions legislation. This thesis will be looking at both.

1.2.3 Sub Research Questions

These sub research questions will also be answered as the thesis seeks to answer the main research question. What are the strengths and weaknesses of the current legislation regulat- ing renewable energy with regards to the energy deficit challenge in Cameroon? How has the legislation and regulation of the energy sector in Cameroon evolve over time in relation to the energy deficit challenge.? Looking at the evolution of the legislation and regulation of the electricity sector over the years, especially from 1998 onwards. What are some of the benefits the country has enjoyed from the passing of these legislations? Since access to elec- tricity rates in the country has increased over the years but at a very low rate.

What are the legislative and regulatory roles played by the various actors involved in the electricity sector in Cameroon?

Why and what can Cameroon learn in the promotion of renewable energy from other regions such as the EU which has a separate legislation on renewable energy promotion?

This work shall look at the aspects which can be applied in the Cameroonian context. Lastly, this work will try to answer the question of what can be done to reduce the energy deficit in Cameroon? Here some suggestions and recommendations will be made to help ameliorate the energy situation in Cameroon.

.

1.3 Research Method

This thesis uses a normal method of legal research were relevant legal rules are systemised and analysed. The relationship between renewable energy and energy deficit in Cameroon and also the question of what is the regulatory framework of renewable energy in Cameroon relevant to the energy deficit challenge shall be answered through the analysing of the rele- vant legislations, of secondary data from other works carried out on the same subject in Cameroon, as well as through analysing some of the information from the electricity sector regulatory agencies in Cameroon.

The thesis also uses the comparative approach where certain aspects of the Cameroonian and EU legislations on renewable energy promotion will be compared and analysed. It shall con- clude by providing recommendations on certain aspects that could be included into the Cam-

eroonian legislation on Renewable energy promotion to make it better. The doctrinal ap- proach which focuses on what the law is,²³ will be used in the analysation of the current legislation in place on renewable energy regulation and promotion in Cameroon. The policy approach will be used in the last section of the thesis in proposing recommendations that could help make a separate legislation on renewable energy development and promotion in Cameroon better equipped to face the energy deficit challenge and similar challenges that may arise in the future.

23 Bodansky 2010, p. 6

CHAPTER 2. THE ENERGY DEFICIT PROBLEM

2.1 Definition and Scope

The Republic of Cameroon often referred to as Africa in miniature, is endowed with abun- dant renewable energy resources, yet these resources are underutilised or unexploited at all.

In the course of this work, energy deficit shall be referring to the inability of many Came- roonians to get access to reliable and sustainable electricity. The country is not self-sufficient in terms of energy and suffers from constant energy shortages. The current rate of access to electricity stands at 55 percent nationally,²⁴majority of the country’s population live in urban areas whose access to electricity rate is estimated at about 95percent.²⁵The rate is very low in rural areas which stands at 17percent.²⁶ At this moment, the country suffers from regular blackouts as a result of power shortages where the demand for electricity is far greater than the supply and the power distribution company is forced to ration electricity supply. This therefore constitutes the energy deficit problem in Cameroon and with the government aim- ing to turn the country into an emerging economy through its program vision 2035,²⁷there is the pressing need to address the energy deficit problem facing the country.

Energy is a very important sector in every economy and more so in a developing country like Cameroon which is seeking poverty reduction and economic growth by trying to open up all segments of the economy to potential investors. Energy is inextricably linked to every other sustainable development goal, be it education, health, poverty reduction, gender equal- ity, employment as well as climate change.²⁸ Therefore, electricity access and energy deficit reduction is very important in achieving other developmental goals of the nation. The coun- try therefore has to revamp its energy sector and try to become energy sufficient before other

24USAID Cameroon 2016, Power Africa Fact Sheet.

25 ClimateScope Report, 2016, Country Profile Cameroon.

26 USAID Cameroon 2016, Power Africa Fact Sheet.

27 Cameroon Vision 2035 Working Paper, Policy document.

28 Energy is fundamental to all aspects of development. Sustainable energy is critical for improving health and livelihoods of millions of people in Sub Saharan Africa. It provides new opportunities, enables busi- nesses to grow, generates jobs as well as creates new markets. Economies can grow more resilient and com- petitive, families can generate incomes, children can study after dark, clinics can store life saving vaccines. It is therefore important to deliver universal access to affordable, reliable, sustainable and clean modern energy to the population.

energy intensive sectors like mining, mineral extractions and some manufacturing can take off.

The main source of electricity in Cameroon is hydroelectricity and the country has enormous hydroelectric potential which it has not been able to harness so far. This might be because of the lack of a clear renewable energy policy and also the absence of commitment and enthusiasm from the government which is weakening the sector’s potentiality to be devel- oped by private and foreign investors. Therefore, it is important for the country to introduce other sources of energy into its energy mix which can go a long way in reducing the energy deficit facing the country by supplying electricity to those areas where grid extension is dif- ficult and also reduce its over dependence on hydroelectric.

In Cameroon, there’s monopoly over the distribution and supply of electricity. Even though the 2011 law on electricity opens the way for independent power producers, there’s monop- oly over transmission and distribution. This monopoly makes it difficult for other companies to come in and compete in this sector and therefore it is the consumers that suffer as a result of low-quality product from the sole supplier. In Cameroon, if the only distribution company has a major problem, it can force the entire country into serious power shortages or even total blackouts in worst case scenarios. This is not healthy for any country looking to emerge economically and reduce the poverty rate of its citizens.

There’s a requirement in the Cameroonian law governing the electricity sector for total un- bundling of the production, transmission, and distribution networks and also a review of the privatisation laws which granted monopoly over electricity distribution in Cameroon. This will make the sector open and attractive for other investors and consumers will benefit as access to electricity will become more affordable and efficient due to competition. They can also enjoy other benefits competition brings such as lower tariffs, reliable and constant elec- tricity, and also the quick servicing of equipment’s when there’s a problem. Urbanisation, economic and population growth are driving the demand for energy higher every year. An efficient energy legislation is therefore a requirement for Cameroon to meet its future energy and economic challenges and also reduce the energy deficit which the country is facing.

Furthermore, the country is also faced with the threat of climate change, high temperatures and low rainfalls have led to low river levels in recent years especially in the northern parts of the country and that makes it difficult for sustainable hydroelectric dams to be built.

Therefore, it is of paramount importance for the country to develop other renewable sources of energy which it has in abundance. Renewable energy sources should be developed be- cause the country has renewable energy potentials in abundance, and it will be easier and cheaper to develop. It will provide clean electricity for heating and cooking and will also be a means of combatting the climate change threat. The country is now looking to open its energy sector for investors to come and develop its enormous renewable energy potentials.

This therefore requires a transparent and well effective legislative and regulatory framework.

This can go a long way in attracting foreign investors who are sure and guaranteed that their investments are safe irrespective of a change in the political atmosphere of the country.

The government therefore needs to address this energy deficit issue in the country and the best way to do so is to create a strong and comprehensive legal and policy framework that will establish guiding rules for all players in the energy sector. There is therefore the need for an elaborate framework covering all aspects of energy production, transmission and dis- tribution. Lack of access to electricity has been named as one of the key barriers of doing business in sub Saharan African countries.²⁹

2.2 Causes of the Energy Deficit Challenge in Cameroon

It is important to get a glimpse of how the country came to experience this energy deficit problem, which has evolved through time. Cameroon gained its independence in 1960 and there was an oil boom during that period. Energy was mostly from oil and gas without leav- ing out fuel wood,³⁰ which played a crucial role in domestic cooking and heating. The So- ciété Nationale d’Electricite (SONEL) also known as the National Electricity Company was formed in 1975 after the merger of ENEELCAM, EDC and Powercam.³¹The wholly inte- grated company SONEL was responsible for the production, distribution and transmission

29 IMQS 2017, Africa’s Electricity – a Business Challenge.

30 People use wood to generate energy for cooking and heating.

31 Pineau Energy Policy 2002. p. 1001

of electricity in the entire country. This company was given monopoly in electricity distri- bution by Law 20 of November 1983.

Cameroon later experienced an economic slump in the late 1980s and there was therefore the need to reform certain parts of the economy following pressure from the International Monetary Fund (IMF) and the World Bank. These reforms led to the privatisation of the state-owned electricity company. Before the privatisation the energy deficit problem was already in existence because of the lack of competition for the only state-owned electricity company. This led to drop of quality of services provided by the electricity company. Power shortages were regular and some of the infrastructures used were ageing.³²Also, the eco- nomic situation of the country was not good, and many people could not afford electricity.

There was also lack of desire from the electricity company to carryout grid expansion to remote and rural areas thereby making it very difficult for those in that area to have access to electricity and they were therefore, forced to rely on fuel wood for cooking and heating.³³ They lost a lot of time gathering wood and also suffered from household air pollution.³⁴All these contributed in increasing the energy deficit in the country.

The state-owned electricity company was later privatised, and the privatisation was eased by a series of laws and decrees which were enacted between 1998-2000. The 1998 law No 98/022,³⁵ created certain agencies for the regulation of the electricity sector. These were the Electricity Sector Regulator (ARSEL) and the Rural Electrification Agency (AER) in charge of rural electrification. The law also tried to unbundle the power sector by dividing it into generation, transmission, distribution and retail sales. It also introduced the idea of conces- sions which companies are required to acquire before beginning their activities in the power sector. It is fair to say this law was laying the ground work for future regulations in the energy sector. The government had realised the existence of the energy deficit and was there- fore setting the ground work to try to solve the problem even though it will take so many years for it to be solved.

32 Ibid

33 Fuel wood refers to wood taken from the forest and used for domestic purposes such as cooking food, heat- ing as well as lighting of homes in some situations.

34 World Energy Outlook 2017, p 13.

35 KPMG Africa Infrastructure 2016. Sub Saharan Africa Power Outlook, p. 18

In February 2001, the American company AES Sirocco acquired a 56 percent stake in the state-owned electricity company and the company was now known as AES SONEL, which was given 20 years concession over the distribution and supply of electricity in Cameroon.

However, the change in ownership didn’t necessarily mean a closure of the energy gap in the country as regular power shortages were still common. Power infrastructures were still ageing. There were also some positive aspects from the acquisition as the company was now in private hands which became more efficient in providing power and other electrical ser- vices. Also, the electrification rate grew from 11 percent in 2000 to about 16 percent in 2012.³⁶ AES continued to operate in the Cameroonian electricity sector until 2014 when it sold its interest to ACTIS, a British private equity fund. This also led to the changing of the name from AES SONEL to ENEO Cameroon.

The government, recognising the need to close the energy gap and improve the rate of access to electricity of many Cameroonians, have been taking some measures to improve on the electricity rate in the country. It has adopted some policies which will be analysed in the next chapter such as the National Energy Plan of 2005, the Energy Sector Development Plan (PDSE) 2030, the Rural Electrification Master Plan (PDER), the Cameroon Vision 2035, and above all the 2011 Electricity Law,³⁷which introduced the role of renewable energy and its promotion to be used for reducing the energy deficit of the country and increase the rate of access to electricity of many Cameroonians.

2.3 The Importance of Renewable Energy Development

Despite the abundance of these renewable energy potentials which was supposed to make the country to be self-sufficient in energy and even exporting to other countries, Cameroon still suffers from an energy deficit with low rate of access to electricity. Although most urban regions are electrified, it is still very insufficient and unaffordable to many communities.

Low rate of access to electricity and cooking gas in rural areas has led to communities de- pending on fuel wood to cook and sometimes lighting up their homes, and this has led to

36 United Nations Environment Program 2017. Energy Profile Cameroon

37 KPMG Africa Infrastructure 2016, Sub Saharan Africa Power Outlook, p. 18

massive deforestations in some parts of the country as people tend to cut down forest vege- tation for various domestic uses. This lack of access to reliable and constant energy triggers a number of effects such as massive deforestation which also leads to a colossal loss of biodiversity. Therefore, a solution to the energy deficit problem in Cameroon does not only makes the country becomes energy sufficient, but also reduces deforestation and potent loss of biodiversity as well.

Moreover, even though about 70percent of electricity produced in Cameroon comes from hydropower, there is the pressing need to diversify and develop other renewable energy sources. The problem of climate change is real and increase in temperatures in the sub-Sa- haran region of Africa has seen a decline in the amount of water flowing in rivers especially in the dry seasons. This poses a serious threat to the hydropower sources in the country as some river’s flows tend to slow down in the dry seasons leading to power shortages and blackouts in the most vulnerable parts of the country and also rationalisation of electricity.

Figure 1. Electricity generation by sources in Cameroon 2013.³⁸

38 Erasmus et al Renewable and Sustainable Energy Reviews 2017, p. 3

From figure 1, it can be seen that Hydro accounts for the greater part of electricity generation in Cameroon. Production of electricity from other renewable energy sources such as wind, solar and biomass accounts for less than 1 percent of the country’s energy mix.

Also, reducing greenhouse gas emissions has become top policy agendas of most govern- ments in sub-Saharan Africa including Cameroon which has undertaken strategies to reduce their greenhouse gas emissions. The country is part of the international effort to combat climate change. It has signed and ratified a Multilateral Environmental Agreements (MEA), known as the Paris Agreement of the United Nations, Paris, 12December 2015, In force 4 November 2016, XXVII 7d United Nations Treaty Collection (2019). Cameroon signed the agreement on the 22^nd of April 2016 and ratified it on the 29^th of July 2016,³⁹ where it has pledged to take efforts to fulfil its own Nationally Determined Contributions (NDCs) by making sure 25percent of its energy comes from renewable sources by the year 2030.⁴⁰ The use or exploitation of renewable sources of energy to increase access to modern energy in the country can be undertaken through the Clean Development Mechanism (CDM) projects.

Access to sustainable and clean energy is one of the goals of the United Nation’s Sustainable Development Goals (SDG). The world is moving towards clean energy and Cameroon should be part of that train seeking to provide clean energy to its citizens and this can only be achieved by promoting the use of energy from renewable sources to reduce the energy deficit in the country and increase access to electricity. Therefore, by engaging in the exploi- tation of renewable energy sources to increase access to energy, they do not only solve the energy deficit problem, but also that of deforestation, biodiversity loss as well as climate change.

However, this up take of renewable energy to solve the energy needs of many Cameroonians, faces some significant challenges such as lack of institutional support and the research for the potentials of the various renewable energy sources have not been done in the details. Just a few renewable energy potential sources have been thoroughly researched such as hydro- power sources and maybe solar too. Other sources such as wind and geothermal have not

39 United Nations Treaty Collection 2019, Paris Agreement Cameroon signatory and Ratification Dates.

40 United Nations 2015, Climate Change Announcement.

been researched in depth.⁴¹ This has sometimes left policy makers with limited knowledge on the renewable energy potentials available in the country and therefore, made the drawing up of a legal framework covering the general exploitation of renewable energy sources in Cameroon difficult.

Most services in Cameroon depend on the availability of electrical energy. The scarcity of energy therefore retards the economic, environmental and social progress of a society. The lack of constant and reliable electricity means education, health as well as the business sector does not operate efficiently and also hinders the spread of information and communication technology which plays an important role in the economy of every country. Electricity access is often very low in rural areas which are often sparsely populated and not connected to the main grid. The rugged nature of the terrain sometimes makes grid expansion very difficult and expensive, thereby leaving the people in rural areas with no or very little access to elec- tricity.

Figure. 2. Sectoral Electricity Consumption in Cameroon 2014.⁴²

41 Wirba et al Renewable Energy 76 2015, p. 562

42 Erasmus et al. Renewable and Sustainable Energy Reviews 2017, p. 3

From figure 2, we can see that the industrial sector alone consumes more than 50 percent of the entire electricity produced in the country, thereby leaving the other sectors to scramble for the remaining half of the electricity produced which most often is not enough to satisfy the demand for it. This leads to power shortages and rationing of electricity to try and meet up with its ever-increasing demand.

There is always the question of why the use of renewable energy to reduce the energy deficit in Cameroon instead of other conventional sources of energy? Cameroon is also rich in oil and gas deposits. However, there are several benefits that comes with using renewable en- ergy to increase access to electricity rates in Cameroon. These benefits ranges from the avail- ability of the resources to the climatic and environmental benefits of using the resources.

Cameroon is abundantly rich in renewable energy sources such as hydro, biomass, solar and wind. The potential capacities of these renewable energy sources will be discussed in the next chapter. Renewable energy should be used because they are energy derived from natural processes and are replenished at a faster rate than they are consumed.⁴³It therefore makes more sense to use renewable sources to produce electricity as opposed to other conventional sources such as oil and gas which are not replenished as fast as they are being consumed.

The oil and gas reserves might run dry some day and the country will be in search of where to produce electricity from. I think it is therefore important to make that switch now and use renewable sources of energy to generate electricity instead of using other sources which might leave us wondering what we are going to do when they finish. They can continue to use and develop other sources of renewable energy and also carrying out some research to make it better and more efficient in the future to serve their electricity needs.

Also, using and introducing diverse sources of renewable energy into their energy mix helps ensure security of energy supply. Over dependence on one source for supply of electricity does not guarantee security of supply. The goal is to have constant, reliable and sustainable energy supply and this I think can be easily achieved when your energy needs are fulfilled from diverse renewable sources. This will increase the supply of electricity to meet with the

43 International Energy Agency 2017. Facts about renewable energy

growing demand, thereby increasing access to electricity of many Cameroonians and reduc- ing the gap between electricity demand and supply.

The environment plays a crucial role to the wellbeing of an individual. Our everyday activ- ities affect the environment in which we live in. Therefore, it is important for us to keep our environment sound and healthy as it is affected by our activities. Choosing renewable energy to be used to increase access to electricity in Cameroon as opposed to other conventional sources is its relation to the environment. The less carbon emissions we emit into the atmos- phere the safer our environment becomes. The use of conventional methods to generate elec- tricity leads to the emission of greenhouse gases into the atmosphere and that has led to the problem of climate change we are facing now.⁴⁴Renewable energy usage decreases our de- pendence on fossil fuels and the less fossil fuel we use, the fewer greenhouse gases end up in the atmosphere. Fighting climate change is very important for Cameroon because the country is mostly dependent on agriculture and climate change might bring several aspects which are not favourable to the country’s agricultural system such as droughts and regular floods.⁴⁵

In Cameroon, climate change has a negative impact on agriculture which is a very important sector of the economy, therefore renewable sources of energy which produce little or no greenhouse gases should be used as means of fighting climate change and providing clean energy to Cameroonians. Developing and using renewable sources of energy to produce electricity as opposed to conventional sources is one of the most important means of com- bating climate change. It is therefore in the interest of the country to encourage and promote the use of renewable energy to increase access to clean energy to Cameroonians and reduce the energy deficit in the country.

Renewable energy can be developed anywhere as long as the potentials are available in that area. In Cameroon, majority of the people without access to electricity are those in the rural

44 Renewables Talk 2012. Connection between renewable energy and climate change

45 Molua – Lambi Policy Research Working Paper 4364. World Bank Development Research Group 2007, p.

8.