Just Energy Transition Partnership deal

Description

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Context

Senegal signed the Just Energy Transition Partnership deal, announced on June 22, 2023, after South Africa, Indonesia & Vietnam to fasten the process of providing electricity access to all its citizens by 2025.
This deal will help in increasing the share of renewable energy installed capacity to 40% and 2.5 billion euros will be mobilized for country to achieve this target.

Other Details

Senegal became the fourth country to sign the deal promoted by International Partners Group.
International Partners Group comprises of France, Germany, the European Union, the United Kingdom and Canada.
This financing will extend over an initial period of 3-5 years and will be provided by international partners and multilateral development banks.

Just Energy Transition Partnership (JET-P) deal

It is a type of innovative funding models by developed countries in the direction of generation of energy through clean and renewable sources.
The first Just Energy Transition Partnership was announced at COP 26 Glasgow in November 2021.
The mechanism will help developing countries in achieving their targets related to energy security and access, climate change mitigation.
It helps in decarbonisation of the emerging economies of a country that are heavily coal-dependent.

Significance of the Deal

It will provide various opportunities for investment from the private sector, sovereign wealth funds and philanthropic foundations.
Development of renewable energy will be in a quick and efficient manner.
It will help Senegal in shaping and publishing a long-term vision for greenhouse gas emission strategy before COP28.
Its nationally determined contributions will reflect the new climate ambitions hence positively contributing towards environment.

Current situation and targets of Senegal

Until 2010, Heavy Fuel Oil was the main source of electricity. Its contribution was as high as 85% to the total electricity generation.
In later years, 2014-17, oil and gas reserves were discovered and country has seen a shift to gas-to-power strategy in 2018.
In 2015, targets of 20 per cent renewable energy in the electricity mix by 2020 and 23 per cent in 2030 were set.
Also in 2015, a new target was set which was - 30 % of photovoltaic and wind in the electricity generation mix by 2025.
By 2020-21 total installed capacity in Senegal was 2 to 1.5 gigawatts.
Currently In the total installed capacity of Senegal, renewable energy contribution is around 31%.
Also only 20 % of the total electricity is generated by using renewable sources thus Senegal relies heavily on imported fossil fuels.
However it is to be notes that Senegal emits less than 0.03 % of the global CO2 emissions, 13.6 million tonnes of CO2.

Europe’s Vested Interests

Germany supported export of gas and other LNG sources from Senegal to Europe, Subsequently a Germany-Senegal gas plan came up in 2022.
For exporting gas Infrastructure is already in place and more is being developed.
Greater Tortue Ahmeyim field for instance will start exporting by end on 2023.
However organizations like African civil society are opposing the exploitation of Africa’s natural resources by Global North and criticising its energy policies.

Energy Challenges and concerns of Senegal

Providing energy access to its 16.8 million populations by 2025.
Around 30 per cent of population, especially in rural areas, is lacking access to electricity.
Most used fuel sources are firewood and charcoal for cooking which are not good for health and environment.
In the new deal there is no emphasis on grants and concessional loans for the required energy transition.
As per Beyond Climate Finance report, annual debt burden of Senegal is far more than the cost of achieving its climate goal. Hence a concern of affordability of this electricity rises.

India and JET-P deal

India has not signed the deal
There is a possibility of India signing a similar JET-P deal but no final decision is made due to various concerns.
Major concerns are –
- Consent of stakeholders is challenging as they are diverse, large and there are complex ownership of the Indian power sector.
- Nature of Finance – as evident from the experiences of other countries like South Africa, it is mostly in the form of loans which creates a financial burden.
- India’s energy security and development objectives are not properly considered in such deals.

PRACTICE QUESTION

Just Energy Transition Partnership deal is a much needed initiative for a clean energy transition however it poses a serious concern for the developmental objectives and the healthy growth of economies of developing countries. Examine. (250 words)