The Ethiopian government's pledge in the Powering Africa: Ethiopia meeting to spend 20 billion dollars on the power development program in the second generation of the Growth & Transformation Plan (GTP-II), from 2015 to 2020, consistent to the country's annual spending track record of two billion dollars for the past three years is another renewed commitment to the energy industry.
To achieve both the ambitious goals of meeting the local energy demand and exporting power to the neighboring countries, Ethiopia should genuinely thrive to avoid the brakes on energy developments such as timely reforming the barriers in the national energy policy. Promoting Public Private Partnerships are also at the nation's disposal to shape the energy future. The energy sector policy should be made wide enough to accommodate best business practices and to the regional competitive standards, at least.
Professionals and the energy stakeholders should be encouraged to be proactive in the participation of international and regional energy conferences to inform the opportunities for investment in Ethiopia.
The new energy law enacted recently allows private developers to generate and sell power to the Ethiopian Electric Utility. So far, Reykjavic Geothermal, the Icelandic company, signed a memorandum of understanding with the Ethiopian Government to generate 1000 MW from geothermal reserve near Shashemene town. Reykjavik which plans to invest USD 4 billion on the geothermal project is negotiating to sign the first power purchasing agreement in the history of the country. Others should also be allowed to follow suite to change the energy picture of the nation once and for all. The competitive environment will create many more advantages to the nation's energy industry.
If the decline in oil price, about 60 percent since the end of 2014,on the global market which comprises about one fifth of Ethiopia's total import cost sustains, the saving will be another plus to fund the power projects.
The Energy Mix
Since the end of 2013, the former sole utility monopoly, Ethiopian Electric Power Corporation, has been split in to two independent entities, Ethiopian ElectricPower and Ethiopian Electric Utility, in a bid to restructure and make the company more efficient. While the former is tasked to undertake and oversee the country's power projects including the mega hydroelectric dams and transmission lines, the later is made responsible for the operations, distribution and sales of electric power, at least until to the near future. Whether the restructuring achieves its objective is an answer the public has been waiting for, however.
Unless the ongoing major power projects are made operational in a short span of time, the current double digit annual economic growth in the nation's economy will pose a real setback to the businesses operating in the country.
The domestic electricity demand in Ethiopia currently is expected to grow by more than 32 percent per year. For that matter, the current installed generating capacity of approximately 2300 MW is far from meeting the rising demand.
The ongoing national grid infrastructure project when commissioned is anticipated to boost the connectivity of the load dispatch centers and the overall grid network but the integration of the central grid and distributed sources will remain an issue to be resolved in the times ahead. How smart are the smart meters to be assembled locally and introduced to the market determines the pace and the cost of the integration of the two.
The Enterprise network solutions could be extended to help the power entities replace the much paper dependent communication which is a cause for red tape, blackmailing and ultimately delays, with modern approach. For an investor accustomed to fast and modern approaches to communication, the long paper work may be a nightmare to cope with.
The collaborations of the power companies with the state’s educational institutions, like the case in the Adama wind farm where Addis Ababa University was the project consultant are crucial to the development of the industry. The energy sector should be supported with relevant studies, researches and hence innovations to stand on its feet by its own and maximize the benefit to the 90 million people.
Power entities should set up independent expertise/bodies or consulting partners not only to be able to identify and address the real shortcomings in their operations but also acquire best practices to move the efforts forward faster. The level of expertise required to manage the energy resources as most of the ongoing massive projects are operational is not something to be postponed. Leveraging full features of modern technologies is also another frontier to be dealt with.
Maintenance of the power infrastructure
The government sources claimed that the electricity coverage reached to 55 percent though other independent sources suggested a much lesser figure. Even with the larger estimate there is still half way to go to fully electrify the country. Equally important is the quality of service. In spite of increasing production power outage particularly on peak hours is becoming. While the lowest electricity tariff rating in the continent is an important incentive to businesses in particular and the economy's production in general, providing sufficient power at all times have been an issue which requires immediate attention.
Power and Energy Practitioner, and
Experienced Projects Manager
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