Power policy

Mauritania’s government has rolled out little in the way of incentives to deploy clean energy. Since 2013, it has issued three auctions for engineering, procurement, and construction (EPC) contracts to build solar and wind. These auctions led to the construction of the 30-megawatt wind farm outside Nouakchott and the 50-megawatt Toujounine solar PV plant. The latest project, a 100-megawatt wind farm in Boulenoir, is waiting for the state utility Societe Mauritanienne d’Electricite Sna (Somelec) to resolve grid balancing issues to start operations. All grid-connected renewable projects were financed almost entirely by development funds from Arab countries. Siemens Gamesa and Elecnor SA are providing the EPC and maintenance services for both wind farms.

Mauritania has already exceeded its renewable energy target of 20% of total electricity generation by 2020. The power mix is currently at 35-40% of renewable generation, thanks to existing hydro, wind, and solar generation. The official government target is 50% of renewable generation by 2030, which the country should hit once the 100-megawatt wind farm becomes operational. To transition to 100% carbon-free power, the biggest challenge is to replace the country’s thermal generation, which currently runs on diesel and heavy fuel oil, with clean power. The current plan is to retrofit part of the country’s biggest power plant, the North Central thermal station, to run on natural gas instead of diesel or heavy-fuel oil.

The government wants to double the rural electrification rate to 12% by 2024 from 6% in 2022 by expanding the state-led mini grid program and electrifying at least 200 villages. In the long term, the objective is to increase rural electrification rates to 40% and achieve universal access in urban areas by 2030.

Power prices and costs

Generous subsidies have kept retail tariffs stable over the past few years. Compared with neighboring countries, Somelec’s power tariffs are low, at an average retail price of $156.41 per megawatt-hour. However, most citizens pay discounted ‘social’ rates bankrolled by the state while rural consumers are faced with steeper bills levied by microgrid operators. There is little regulatory clarity concerning how tariffs are determined and adjusted. The latter falls under the remit of regulatory agency Autorite de Regulation.

Power market

Mauritania’s state utility Somelec owns the generation, grid, and retail electricity sectors. But the government introduced structural reforms in 2022, which would break up Somelec into four different companies and open power generation to competition. The new, independently run Somelec entities would still control the transmission, distribution, and retail sectors. Still, there are no planned auctions or offtake frameworks for independent power producers (IPPs) to build new renewable projects. The government plans to issue specific decrees and frameworks for the terms and duration of new power purchase agreements between IPPs and Somelec.

Most industrials in Mauritania, mainly in the mining sector, have built on-site solar, wind and diesel projects. With the new reforms, industrials would be allowed to sell the excess generation of their on-site projects back into Somelec’s grid. To do so, the company would need to obtain a license that justifies that Somelec benefits from using this excess electricity. Commercial and industrial (C&I) customers are also able to purchase electricity from an on-site project owned and operated by a third party if the project is bigger than 30 kilowatts and there is a bilateral contract in place.

In rural areas, operators with a concession may participate in power generation, distribution, and retail. This license, which the government issues via tenders, allows private companies to build, operate and sell electricity from a mini grid at pre-determined prices. The fixed prices for mini grids are 5 ouguiya ($0.13), 9 ouguiya and 12 ouguiya per kilowatt-hour depending on the project size. As of July 2022, there were 20 new mini grids under construction or up for tender, according to the Ministry of Petroleum, Mines and Energy.

For the financing, the government uses funds from development banks to pay for 90% of the upfront capital expenditure of a mini grid. PV-diesel hybrid projects are the most popular form of rural mini grids, but the government wants to prioritize solar paired with battery storage in its mini-grid expansion efforts. The size of these mini grids can range from 30-200 kilowatts in size, per government estimates, but some can be as large as 2-6 megawatts.

The discovery of offshore gas has made the government eager to begin selling energy to its neighbors and convert some of its thermal generation plants to natural gas from diesel and oil.

Doing business and barriers

Mauritania has built out large transmission infrastructure that can accommodate plenty of new large-scale renewable power generation. But power interruptions at the distribution grid level remains a problem for electricity reliability.

Grid balancing issues at interconnection points are one of the biggest barriers to build large-scale renewables. Voltage and frequency spikes at these points force existing renewable projects to shut down three to four times per month during at least a couple of hours. These rapid shutdowns, if they happen too often, can seriously damage a wind or solar plant’s equipment. Mauritania’s grid operator Somelec must prioritize regular maintenance and oversight of the grid, implement grid balancing programs and invest in necessary upgrades. Transparent grid extension plans and clear rules on interconnection would also reduce project development risks.

Physical and demographical challenges also make large-scale renewable development hard. Mauritania is a vast country but its population size of roughly 4 million to 5 million is very geographically dispersed across the country. About 60% of the population lives in cities, and a quarter of households are nomads. Urbanization and population growth should increase electricity demand in dense areas.

The country already has excess grid-connected power capacity, but generation is heavily reliant on a few power plants. Peak electricity demand in Mauritania is just about 200 megawatts, compared with over 450 megawatts of available power capacity, which excludes the new 100-megawatt Boulenoir wind farm.

Even after the upcoming liberalization of power generation, new IPP project development will be limited unless companies can earn very high returns and have access to strong loan guarantees, credit enhancement mechanisms and investor protection rules. Soft costs as well as regulatory and market risks are too high to justify new projects, especially given the small population size of Mauritania, per interviews with international developers. Even if the country were to replace the 312 megawatts of thermal power installed with clean sources, the ambition is too small for most big energy companies with experience in Africa. Somelec, which would purchase all power from new IPP projects, is also heavily indebted and at the brink of bankruptcy.

EV market

The government has yet to implement any substantive policy support in the transport and electric vehicle sectors.

EV policy

The government has yet to implement any substantive policy support in this sector.

Buildings market

The government has yet to implement any substantive policy support in the buildings sector.

Buildings policy

The government has yet to implement any substantive policy support in this sector.