COUNTLESS BENEFITS OF THE CLSG PROJECT
“In recognition of the benefits that this project will bring to the CLSG countries, it was singled out by the G20 as a priority project at the 2011 Cannes meetings.”
Regional Integration of electricity networks
It provides the power utilities of the region with a vehicle to achieve the vision embodied in the ECOWAS Energy Protocol –that of creating a “level playing field” to facilitate the balanced development of diverse energy resources of the ECOWAS Member States for their collective economic benefit, through long-term energy sector cooperation, unimpeded energy transit and increasing cross-border electricity trade.
Reducing the greenhouse gas emissions
The interconnection results in reduced use of hydrocarbon fuels in the four countries and helps avoid more than 5.6 million tons of carbon over the lifetime of the project in comparison to the “without” project scenario. Assuming a damage cost value of US$20 per ton, overall gains from avoided carbon emissions can be valued at US$62.5 million in net present value (NPV) terms.
Economic Recovery and Poverty Reduction
The project will contribute to economic recovery and poverty reduction through improved access to essential power supplies in the CLSG area. This will be accomplished through the re-construction of essential infrastructure and strengthening of institutional capabilities to plan, procure, operate, maintain and sustainably manage these services. It will provide support for targeted critical investments with the aim of developing the most economic power resources in the CLSG area and making services available from a regional power system that overcomes the structural inefficiencies presented by the small sizes of the individual economies.
Improving the Financial Performance
The CLSG project will improve the financial performance of at least some of the national utilities significantly, as the energy imported would displace more expensive generation sources. In turn, the combined regional and domestic impacts will support the transition to normally functioning power utilities in these countries with lower cost, more sustainable generation and more effective means to control and optimize system expansion and operations.
Developing Alternative Power Supply Model
Grid connection of mining sites would allow a number of alternative power supply models to be developed. The CLSG countries are endowed with vast areas of world class iron ore deposits that once developed could represent a major demand on the CLSG line. Indeed the CLSG line goes closely past the most significant mining areas and the potential amount traded by the mining companies is high. If mining demand were interconnected to the grid, different supply arrangements could be developed that would allow the energy supply surplus from mining to be sold to the grid (either bilateral or to the utilities) or allow the development of large supply generation plan to meet the mining demand while using the CLSG line.