Solar: Ethiopia’s Future Energy

By Samuel Tekleyesus /ABN/

Ethiopia has an abundance of potential renewable energy sources that, if pursued, could significantly change the nature of Ethiopia’s current energy sector which heavily depends on the use of traditional sources towards a future of countrywide electrification. Ethiopia’s Growth and transformation Plan (GTP)considers renewable energy as one of the leading new drivers of economic growthin the country.Under GTPII, the country plans to increase the current electricity generation capacity to 17 GW by 2020.

As per the report of the Ministry of Water Irrigation and Electricity, in Ethiopia 90 % of the population use traditional biomass for cooking and 70 % use kerosene for lighting.According to sources, around 45% of Ethiopia’s populationcurrently has access to electricity grid.

To bridge thegap between abundant resources with the needs the country launched theNational Electrification Program(NEP) in 2017 in collaboration with the World Bank by outlining a plan to reach universalaccess of electricity by 2025.

In 2018 the Ethiopia ElectrificationProgram (ELEAP) was launched by thecountry’s government together with theWorld Bank to directly support the NEP.For the millions of people living in remote rural areas of Ethiopia who lack access to the power grid or cannot afford electricity, solar energy can be an important first alternative on the energy access basket.

Ethiopia’s power generation mix consistsentirely out of renewable energysources. The country currentcapacity is 4.5 GW excessively dependent on its hydropower plantspower generating capacity which came from 14 hydropower plants, whichaccounts for more than 85% of the total capacity. Other large hydro plants are also currently under development including the massive Great Ethiopian Renaissance Dam (GERD), the Koysha Hydropower project and the GenaleDawa III project.Other thanhydropower, the country also has threewind farms, collectively generating 324MW, and a few diesel plants, generating143 MW, with the rest being generated bysolar power (14 MW), geothermal power(7.5 MW) and other renewables.

Based on the Ministry of Water Irrigation and Electricity, there is an abundant solar irradiation which can be utilized as source of Electricity. The national annual average irradiance is estimated to be 5.2 kWh/m2 /day with seasonal variations that range between the minimum of 4.5 kWh/m2 /day in July to a maximum of 5.6 kWh/m2 /day in February and March with a higher annual average irradiance well above 6 kWh/m2 /day in rift valley regions, Western and Eastern lowlands of the country. Even thoughover the past five years Ethiopia’s solar PVcapacity has almost tripled, the solar energy sector in Ethiopia is still in its earliest stages of developmentrepresenting 0.3% of the country’s totalenergy capacity.

Ethiopia has prioritized construction of large-scale solar projects in the regions of Afar, Somali, Oromia and Tigray, onPublic Private Partnership (PPP).In 2016, the state-owned Ethiopian Electric Power (EEP)launched the country’s first solar tender for the 100 MW Metahara and  Italian energy company Enel renewable energy was selected, the constructionis scheduled to come online by the end of 2019.

The second tender was launched in 2017 for the constructionof two 125 MW solar facilities in Gad and Dicheto which a Saudi Arabia’s Power firm, ACWA has won it with the record low tariff rate in Africa. In January 2019, the newly formed Public Private Partnership (PPP) Board has approved six solar energy projects at a cost of USD 795 million with capacity to generate some 750 megawatt of electricity.

S/N   Project Name   Capacity (MW) Estimated Project cost (USD Million)   Region
1 Metehara Solar 100 120 Oromia
2 Gad Solar Scale (Phase I) 125 150 Somali
3 Dicheto Solar Scale (Phase I) 125 150 Afar
4 Mekele Solar 100 120 Tigray
5 Humera Solar 100 120 Tigray
6 Welenchiti Solar 150 165 Oromia
7 Weranso Solar PV 150 165 Afar
8 Metema Solar PV 125 150 Amhara
9 Hurso Solar PV 125 150 Dire Dawa

Source: Own compilations from different sources

In conclusion, Ethiopia has a large population with a rapidly growing economy and very low level of electrification. Ethiopia is doing very well withregards to generating electricity throughhydropower butthe current capacity is extremely small for a country with such rapidly growing energy demand and needs to be supported by alternating sources such as wind and solar.Underlying solar energy with a potential to be used in both small- and large-scale electrification measures, currently it only takes up a small part of Ethiopia’s power mix.

On the other hand, the country’s ambition on massive industrial complexes and agricultural farms create a big opportunity for investors as the government considers private and foreign direct investments in renewable energy sector is critical to the success of the plan.This shows a large potential to invest significantly in energygeneration and transmission.The high degree of solar PV potential in Ethiopiaoffers an extremely profitable opportunity for investors in the development of solar PV projects.

(The writer has MBA in Finance; he’s a

lecturer, researcher and business consultant)

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