Madagascar: Madagascar Energy Profile

The Republic of Madagascar is an island country located in the Indian Ocean off the southeastern coast of Africa. The country comprises the island of Madagascar which, at 587,000 square kilometres (227,000 sq mi), is classified as the fourth-major island in the world, inclunding numerous smaller peripheral islands, the major of which include Nosy Be and Nosy Boraha (Île Sainte-Marie).

Under Ravalomanana, these investments produced substantive economic increase but the benefits were not evenly spread throughout the people, producing tensions over the increasing cost of living and declining living standards part the poor and some segments of the middle class. Current and next generations in Madagascar are faced with the challenge of striking a balance between economic increase, equitable development and natural conservation.

Energy sources

Total installed electricity capacity (2008): 246 MW
Hydro-electric: 50.4%
Conventional Thermal: 49.6%

Total primary energy supply (2008): 6,549 ktoe
Biomass: 90%
Oil and oil products: 9 %
Hydro: 1 %
Coal: 0.1 %

The exploitation of forest resources provides wood and by-products that meet most households\\\' energy needs. In the rural villages, firewood and charcoal are still being used as a fuel source, and this traditional fuel impacts the forest and the health of residents. 

Power in the form of renewable energy by independent electricity producers has increased from 88MW in 2006 to 91MW in 2007. The increase is mainly due to the coming of several private operators such as Henri Fraise, HYDELEC, ENELEC, and EDM.

There are a total of 114 centres of power generation in Madagascar. 100 are powered by diesel thermal generators, while the balance of the centres is powered by hydroelectric facilities.

Reliance

Madagascar is a net oil importer. The country stopped importing crude oil in 2005, next the refinery in Tamatave was closed. However, it imported 540,106 metric tons of final products in 2006. Besides transport, the lighting and electricity generation sectors are the second major users of petroleum. Additional than half of the electricity produced in Madagascar is derived from imported fuel. Additional than 85% of the rural people use kerosene for lighting.

Extend network

There are presently three grids in the country; the Antananarivo Grid, the Toamasina Grid and the Fianarantsoa Grid. All equipment for transmission is administered by JIRAMA, the national utility. Whilst reliability and coverage of electricity have increased over the completed 5 years, electricity generation only covers 15% of national needs, 72% in the urban areas and 5% in the rural areas. Production as a whole is unable to satisfy request, so the rate of electrification is low, particularly in rural areas where less than 2% of the people have access to electricity.

Capacity concerns

The infrastructure is insufficient and a large number of the generation and distribution facilities are obsolescent.  Load shedding is common in the capital.  In the short term, reorganizing the JIRAMA is one of the National\\\'s priorities because of electricity supply problems. Furthermore, since Madagascar is importing oil, the power sector is vulnerable to the fluctuation of the international oil price.

Although there are abundant renewable energy sources such as hydropower in Madagascar, the developed energy sources are limited, and electric power development corresponding to request increase and economic increase has not from presently on been completed. The ratio of thermal power plants has been additional than half of all power sources in the completed. Madagascar is dependant on fuel imports; therefore the sudden rise in fuel costs in recent years has been a critical issue.   Furthermore, the Antananarivo interconnected network, with a peak production of 111 MW in 2000, has reached the limit of its capacity.

Renewable energy

Solar energy
There is a favourable capacity for solar energy in the country, with an average horizontal insolation of 5.5 kWh/m2/day, across the majority of the land area. Photovoltaic’s (PV) in particular are currently utilised for powering public buildings such as health clinics, inclunding an off-grid rural electrification solution.

Wind energy
Conditions in the north and south have been identified as favourable to wind energy, exhibiting average wind speeds of 7.5 to 8.1 m/s at 80m. Other locations in the east and west have average wind speeds of 5.5 to 6.0 m/s at 80m. Wind power potential is currently being developed, as a technology for rural electrification, inclunding on a larger scale, with independent power producer projects utilising the technology, and a 1.2 MW farm being constructed in the north of the island.

Biomass energy
Biomass in the south has been identified as having high potential for energy production. Sugar production is high, and bagasse co-generation is common. Currently, GEM Biofuels has a 137,000 acre plantation within the country dedicated to jatropha oil production. The initial commercial shipment of oil was made in January, 2010.

Geothermal energy
adagascar is believed to have a geothermal potential which is estimated to be in excess of 350MW and it presents a huge number of medium and low enthalpy geothermal zones of interest. The exploration of geothermal energy in Madagascar is still at an early stage. In 2008, the country evaluated its low and medium enthalpy geothermal resources and the preliminary results from geology, geochemical data analyses and geophysical measurements indicate that medium temperature geothermal systems exist in the central and northern parts of the country and possibility of drilling into a medium temperature geothermal reservoir is high.

Hydropower
The total hydro-electric potential of the country is estimated at 7,800 MW. However, only 150 MW of this is currently exploited, indicating the very high potential for further hydropower utilisation. Madagascar currently has 7 hydro-electric power plants, inclunding 11 small-/micro-hydro plants.

Energy efficiency

Deforestation in Madagascar is an ever-present issue, primarily because of the country\\\'s dependency on traditional biomass fuels. Charcoal is a major source of fuel, and its production is often inefficient. Programs are in place to utilise solar cookers in the country, in an effort to reduce dependency on biomass.

Technical and distribution losses have as well been an issue within the Malagasy electricity sector for some time. Rehabilitation of generating units, inclunding improvements to the transmission and distribution network, are priorities for the sector.

Ownership

Electricity market
In 1998, the national started to liberalise production, transport and distribution of electricity, but these activities have attracted few investors.  The national-owned company Jiro sy Rano Malagasy (JIRAMA, http://www.jirama.mg/) holds ten-year concessions for the generation, transport and distribution of electricity.  Following liberalisation, other producers have entered the market and supply JIRAMA, which is still the only company engaged in transport and distribution.  Electricity producers are free to fix the selling price; currently, the national sets ceiling prices for transport and distribution.

Liquid fuels market
The Office des Mines Nationales et des Industries Stratégiques (OMNIS, http://www.omnis-madagascar.mg/), a national-owned enterprise, is in charge of the hydrocarbons mining sub-sector. Twenty one mining titles for exploration had been granted by the end of 2007.  In addition, OMNIS may propose two types of operating arrangement to oil companies:  joint ventures, and production sharing.  In the former case, the mining titles may be held by the partners, while OMNIS holds the titles in the case of production sharing contracts.

Currently, licences to import hydrocarbons are held by JOVENNA, TOTAL, GALANA, Shell, JIRAMA, and the Madagascar Petroleum International Gas Station (MPIGS).  The only refinery at Toamasina, privatised in 2000 and taken over by GALANA, is ceasing its activities.  Several operators hold licences for storage and transport of hydrocarbons, and for the sale of fuel.

Competition

The 1999 reforms led to :
1) The creation of a electricity  regulatory body, the Office de Régulation de l\\\'électricité (ORE), which helped to: 
- Definie the  three activities of production, transport and distribution,
- Abolish the generation monopoly for  JIRAMA ,
- Fix  tariffs on the basis of economic principle,
- Create the Agency for Rural Electrification (ADER) with subsidy mechanisms.

2) A redefining of the role of the national: The national has the role of conceding authority, and has mechanisms to promote the development of national resources to satisfy requirements of electric power to stimulate increase.

3) Encourgae Private Public Partnership and the increased role of the communes.

Thus private-sector participants have been able to generate electricity since 1999 but JIRAMA retains the monopoly in transmission and distribution, and this is expected to remain so for some time. All owned by the national, JIRAMA is notionally run as a commercial company and provides almost all of the public supply of water and electricity in Madagascar. There are almost 340,000 subscribers in 114 towns with electricity, and nearly 110,000 subscribers in 65 centres for water.

Energy framework

In 2008, given the dependency on the oil imports and in the line of long term development of the country, the Government of Madagascar has set ambitious targets for extending electricity access under the Madagascar Action Plan (MAP). The MAP, which covers the period 2007-2012, is the medium term framework for achieving the country’s long term development aspirations as embodied in Madagascar Vision Naturally, inclunding the long term targets in the Millennium Development Goals (MDGs) or “Objectifs du Millénaire pour le Développement” (OMD). In the targets, the Government of Madagascar has planned to increase the electricity access rate to 74% in urban environment and 10% in rural environment by the year 2011. The energy supply will be derived from all possible sources of energy in Madagascar (solar, hydro, wind, bio).

To reach those targets, the Government of Madagascar has elaborated the National Energy Strategy and Policy.

The National Energy Policy contains statements on issues such as energy pricing and subsidies, energy sector governance and regulation, and the financing of energy sector investments. The policy as well contains a separate policy statement on the electricity sub-sector, which confirms the policy commitment to enhancing access to electricity, particularly in rural areas.

The National Energy Strategy sets out how the energy transition in Madagascar will be completed given the macroeconomic impacts of consuming additional petroleum products and electricity. The strategy highlights that the Government’s priorities to develop a knowledge-based economy and exploit indigenous energy resources will help to ensure that modern energy consumption is consistent with sustainable increases in national gain levels.

Energy debates

Electricity generation and distribution are essential for the country’s economic and social development. Given the financial and production problems facing the national company JIRAMA, which have resulted in power cuts and poor quality of service, the government has received technical assistance from the World Bank and the French government for the rehabilitation and reform of JIRAMA, and has commissioned the International Finance Corporation (IFC) to provide advice on a leasing arrangement. On the basis of this assistance, and conclusions of a joint mission of the World Bank, the French Development Agency (AFD) and the European Investment Bank (EIB), the government has committed to continue the restructuring of JIRAMA.

Energy studies

Madagascar is a member of the Common Market for Eastern and Southern Africa (COMESA, http://egov.comesa.int).  COMESA is a regional economic grouping comprising 19 member states, which have agreed to promote regional integration through trade development, and to develop natural and human resources for the benefit of all their people.  COMESA has recently embarked on an Energy Programme to promote regional cooperation in energy development, trade and capacity building.

The programme is intended to harmonise energy policy and regulatory frameworks through model policy and regulatory guidelines for the energy sector; establishing a Regional Association of Energy Regulators for Eastern and Southern Africa.

The programme is as well intended to facilitate trade in energy services through harmonised standards and to develop regional energy infrastructure with the development of a medium to long-term energy master plan. The major activities are in generation and transmission, to facilitate cross-border trade in electricity and to narrow down the high discrepancies in the prices of electricity in various nations in the region.

Role of government

Ministry of Energy and Mines (MEM)
The Ministry of Energy and Mines (MEM, http://www.mem.gov.mg/), has jurisdiction over the energy sector, inclunding the power sector and mineral resources. The original Ministry of Energy (MOE), which was separate from the MEM, had some jurisdiction over the energy sector since January 2007 but the ministries are presently in the process of integrating. The MEM takes charge of the investment and the development strategy policy, inclunding requests for foreign assistance and other policy aspects, whilst JIRAMA takes charge of the technical aspects of the power sector.

Energy procedure

• Promotion of Rural Electrification through Renewable Energies (2008-2014)

With the support of German Technical Assistance (GTZ), the project aims to improve access to electricity from renewable energy sources in rural areas, and to promote the productive use of this electricity in order to reduce dependence on fossil fuels. The implementing agency is the Agence de Développement de l’Électrification Rurale (ADER).

• Mad\\\'Eole 1.2 MW Wind Energy Plant (http://www.madeole.org/)

The energy supply in the city and the surrounding area of Antsiranana, in northern Madagascar, is very unstable. High oil and electricity prices have increased the request for firewood and charcoal, which puts the local forest in danger. In Madagascar, electricity has until presently been produced above all through the combustion of diesel or petroleum, which, in addition to CO2 emissions, as well leads to local air pollution.

The local organization Mad\\\'Eole plans to construct Madagascar\\\'s initial wind farm in Ramena (ca. 25 km from Antisarana) with a capacity of 1.2 MW, which will be connected to the local power supply system. The wind farm will include six turbines with a capacity of 200 kW each.

• Village Hydroelectric Grids: Energy and Respect for the Environment 2008- 2012 (RHYVIERE)

Financinced by the European Union and the Rural Electrification Development Agency, to a budget of €2.3 million.

RHYVIERE aims to design, test and disseminate mechanisms by which to develop rural electricity grids supplied by micro hydroelectric plants in Madagascar. Its major activities are:

• Designing, with actors in the sector, tools and procedures to develop the commodity chain;
• Providing institutional, technical and financial support to actors in the sector, inclunding the private sector and national and local authorities. They aim to develop seven hydroelectric grids in the framework of public-private partnerships, inorder to supply additional than 14,000 people with electricity in three regions of Madagascar;
• Developing a rural electrification observatory (“Ampere” database) for ADER so as to monitor the evolution of the sector;
• Transferring the micro-turbine technology to Madagascar.

Today, all the project tools have been designed and are being tested in the seven selected locations. The Ampere service monitoring observatory has been designed and is being tested with ADER. The transfer of micro-turbine technology was delayed due to the civil crisis in Madagascar.

• Hydropower projects

Three mini hydro projects are being developed by Hydelec SA: Sahanivotry (16.5 MW), Maroantsetra (1.2 MW) and Mahitsy (12 MW).

An extra four mini and medium hydro projects are being developed by JIRAMA: Andekaleka (62 MW), Mandraka (24 MW), Telomita (8.2 MW), and Manandona (1.5 MW).

The Association pour le Développement de l\\\'Energie Solaire  (ADES)

ADES (http://www.adesolaire.org) is a Swiss NGO that produces solar cookers in Madagascar.

ADES has three centres in Madagascar where they construct and conduct outreach activities in solar cooking. In 2008, they sold 1,500 solar ovens. Manufacturing is well organised, but promotion is tougher, as traditional biomass fuels are firmly ingrained in the national psyche. ADES is developing programs such as \\\"women teaching women\\\" and environmental education in the schools.

Energy regulator

The powers of the Office de Régulation de l\\\'électricité (ORE, http://www.ore.mg/,) are defined by the Electricity Code and the Decree 2003-194. The ORE is responsible for granting permits and concessions to suppliers (from Madagascar and abroad). 

The Office Malgache des Hydrocarbures (OMH) (Malagasy Hydrocarbons Board) is the regulatory authority for the downstream petroleum sector, and issues authorisations to operators for the import, processing, transport, storage and sale of hydrocarbons; these activities are open to Malagasy nationals and foreigners.  The exercise of such activities requires an operating licence and the payment of certain costs.

Degree of independence

The regulatory body is, in theory, all independent from the government.  Permit holders in the electricity sector must pay a levy of 1.2% on their turnover, and the sums collected are used to fund the ORE.

Regulatory framework

N/A

Regulatory roles

N/A

Energy regulation role

Agency for Rural Electrification (ADER)
Article 3 of Law No.98-032 indicates that the Ministry of Energy and Mines is in charge of promoting rural electrification.  Under this ministry, ADER initiated its activities in 2002. While ORE has the authority to decide the electricity tariff for the grid electrification regions, ADER is responsible for   electrification in off-grid areas, adjusting electricity tariffs, and regulating the relationship between local governments and independent power producers  in off-grid electrification projects.

Regulatory barriers

The country has not enacted any legislation specifically to promote and enable the development of renewable energy projects. The creation of a regulatory framework for renewable energies would promote the utilisation of such energy sources in the country, inclunding facilitate and improve currently-operational projects and planned projects.