Modeling the transition towards a sustainable energy production in developing nations q Djiby-Racine Thiam a,⇑ , René M.J. Benders b , Henri C. Moll b a Groupe de Recherche en Economie Théorique et Appliquée (GRETHA), Avenue Léon Duguit, 33 608 Pessac Cedex, France b Center for Energy and Environmental Studies IVEM, University of Groningen, Nijenborgh 4, 9747 AG Groningen, The Netherlands article info Article history: Received 7 March 2011 Received in revised form 6 October 2011 Accepted 6 January 2012 Available online 11 February 2012 Keywords: Energy transition Renewable technologies PowerPlan South Africa Senegal abstract The paper investigates how renewable technologies could promote the transition towards a sustainable energy production in developing nations. Based on two different developing nations in terms of eco- nomic, technological and institutional structure: South Africa and Senegal, we implemented scenarios in a bottom-up PowerPlan model in order to analyze the transition toward a sustainable electric produc- tion. Two scenarios have been considered: a business-as-usual (BAU) and a hybrid renewable energy (HRE) scenario. In the first scenario (BAU) we assume that the electricity demand is entirely satisfied by an increase of the investment in the current supply structure based on fossil-fuel energy source. Whereas in the renewable energy scenario, we assume 20% and 30% of the electricity supply being gen- erated from renewable resources by 2020 and 2030 respectively. Focusing on wind and solar photovoltaic technologies, our results show the cost-competitiveness of renewable energy deployment in South Africa. In the case of Senegal, our results show that fossil-fuel resource remains the most competitive to generate electricity in the nation during the next coming years as long as environmental advantages of renewable resource are not considered. Our research indicates that in the case of a centralized electricity supply option, both a scale effect and a learning improvement could eventually strengthen the competitiveness of renewable technology deployment in developing nations. Ó 2012 Elsevier Ltd. All rights reserved. 1. Introduction The promotion of renewable technologies has received wide- spread interest in developing nations. The reasons behind this increasing interest in clean technologies can be at least summa- rized in two points. On the one hand, the promotion of renewable technologies in developing nations encourages the diversification of electricity supplies as well as a reduction of the share in the budget spent throughout the importation of fossil-fuel resources. On the other hand, the transition toward renewable technologies improves the environmental quality through a reduction of green- house gas (GHG) emissions during the electricity generation [1–4]. GHG emissions have important impacts on the climate, therefore, their increases are considered as a threat in modern societies. The threat of climate change in terms of economic, ecological and social impacts urges many developing nations to find alterna- tive paths to providing electricity. In this context, the objective of the paper is to analyze the im- pacts of renewable technologies to providing energy transition into the electricity sector in simultaneously South Africa and Senegal. These impacts are captured in terms of costs, electricity supply mix opportunities and environmental reduction advantages. These countries are chosen as benchmarks because they are active – although at different scales – in investigating potential contribu- tions of renewable technologies into their electricity supply portfo- lio. Their objectives, to diversifying the energy supply system through the introduction of renewable technologies have a sub- stantial weight on the agenda of their respective governments [5,6]. For example South Africa has already set up, since 2009, financial mechanisms (feed-in-tariff) in order to increase the share of clean technologies into their energy balance. The Department of Energy of the Senegalese government has recently undertaken, since June 2010, an institutional re-arrangement and provided financial incentives in order to support the transition towards clean energy path. For example a Department of Renewable Energy has been newly created – within the whole Department of Energy – focusing entirely on the investigation of the determinants and schedules promoting a transition towards renewable technology structures within the nation. Some tax policies have been applied, during the importation of renewable technologies, in order to facilitate large deployments of these technologies in the nation. 0306-2619/$ - see front matter Ó 2012 Elsevier Ltd. All rights reserved. doi:10.1016/j.apenergy.2012.01.011 q This research was undertaken at the IVEM, University of Groningen, The Netherlands. ⇑ Corresponding author. Address: Groupe de Recherche en Economie Théorique et Appliquée (GRETHA), UMR CNRS 5113, 33 608 Pessac Cedex, France. Tel.: +33 556842971. E-mail address: djiby.thiam@u-bordeaux4.fr (D.-R. Thiam). Applied Energy 94 (2012) 98–108 Contents lists available at SciVerse ScienceDirect Applied Energy journal homepage: www.elsevier.com/locate/apenergy