The energy sector: brighter light at the end of the tunnel   Part II By Belayneh Akalu 08/28/13 In the first part of this article posted on our website last week, the writer raised the issue of energy shortage in the face of population and economic growth and tried to look into the policy bases of the efforts to alleviate the problem. In so doing, the Growth and Transformation Plan (GTP), the Climate-Resilient Green Economy (CRGE) initiative and the Scaling-up Renewable Energy Programs (SREP) were considered to get a wider shot of the plan. As stated in the first part of this article, this second and final part deals with the projects underway to optimize the use of geothermal, hydro, wind and solar energy sources as well as oil exploration efforts in the country. So, without further to do, let’s deal with each of the sections in detail. Geothermal Energy          East Africa is a well known region for its geothermal potential especially in its Great Rift Valley section. Kenya is the largest producer of geothermal energy in the region with Zambia and Ethiopia producing a rather small amount. There are also reports of preliminary studies to develop the resource in Djibouti, Uganda and Tanzania. In Ethiopia, studies at various exploration phases have been carried out since 1969. Although these studies have indicated the country’s great geothermal energy potential, financial constraints and the lack of skilled manpower have stood in the way of realizing that potential. Under a program that began in 1969, geo-scientific studies have been conducted in a number of Ethiopian fields and over sixteen areas have been identified to have geothermal resources suitable for electricity generation in the Ethiopian Rift Valley. From these areas deep drilling has been undertaken in Aluto Langano and Tendaho and detailed surface exploration has been nearly completed in four other areas. The rest ten areas are at a first stage of surface exploration. The six candidate geothermal power projects for investment in our country are:-   1.    Aluto Langano power plant (75mw) 2.    Tendaho (100mw) 3.    Corbeti (75mw) 4.    Abaya (100mw) 5.    Tulu Moye (40mw) 6.    Dofan (50mw)   The total power generated from the six candidate power projects is 440mw. The Scaling-up Renewable Energy Program (SREP) states that geothermal power will help to diversify the Ethiopian energy mix and provide valuable base load capacity at low cost and with limited environmental impact. It is estimated that some 5 000 MW of resources are available, and the Government is seeking to develop 1 000 MW of this by 2030. Sadly, it was only in 2012 that the country started to generate the first 7.3 mw from the pilot project of the Aluto Langano power plant which is being upgraded to a full scale project of 75 mw. A more positive note, however, is that geothermal power exploration and development is the second priority in energy expansion schemes in the country next to hydropower generation.   The plans for the Aluto Langano expansion project are two pronged with the first concentrating on upgrading the capacity to 75mw with a projected cost of 229.2 million during the 2012-16 period. The other section of the plan deals with the design of a long-term strategy for the geothermal sector. The SREP document states that it will be important to explore and understand the options, including what has worked and why, and then outline a path forward for the country as Ethiopia considers how to expand its geothermal capacity beyond the 75 mw at Aluto Langano. This route involves the development of a sector strategy that focuses on clearly defining options for how geothermal assets can be developed, including leveraging the private sector strategically as a source of expertise, project management, equipment supplying and investment and financing. Furthermore, the plan emphasizes the need to ensure that future projects are bankable and that requisite business skills are built in relevant institutions.   The Tendaho Geothermal Field, on the other hand, is located in Dubti Wereda (district), Afar region in the Northeast part of Ethiopia, around 600 kilometers from Addis Ababa. The project is tipped of having a capacity of 100mw with a projected project cost of about 320 million USD. As is the case with the Aluto Langano geothermal project, the Tendaho power plant is set to be commissioned in 2016.   Hydroelectric Energy Ethiopia’s hydropower resources, which are distributed in nine major river basins and their innumerable tributaries, are estimated to generate 650 TWh per year. The technically feasible potential is estimated to be 40% of the theoretical potential i.e. 260 TWh per year or 45,000 mw. This would constitute about 15% of the total technically feasible potential of Africa, which is 1750 TWh per year. With massive water resources generated in its high plains Ethiopia has the second highest hydropower potential next to the Democratic Republic of Congo. In order to tap from these abundant water resources, various studies are being undertaken both by Ministry of Water and Energy (MoWE) and the Ethiopian Electric Power Corporation (EEPCo). Starting from the basin-wide water resource master plan studies, specific reconnaissance, prefeasibility and feasibility studies are being undertaken and attractive projects are prioritized in the GTP and CRGE using the levelized cost of generation and implementation readiness of the projects (their status in terms of study completions, whether or not contracts are signed, and the status of construction). Hydropower generates 86% of electricity in Ethiopia. However, as the rainfall in Ethiopia varies considerably from year to year, the need to diversify the country's energy sources to ensure a stable supply is dire. It also implies that overdependence on hydropower makes energy supply unstable, resulting in heavy strains on the pace of growth in every sector and the whole economy by extension.   Ethiopia's ambitious five-year growth and transformation plan, which began in 2010, aims to increase the power generation capacity of the country from the present level of 2000 mw to 10,000 mw by the end of 2015. The aim is to address both domestic demand while exporting surplus power to neighboring countries and beyond. The need to expand the transmission and distribution system is also emphasized in order to deliver the energy generated to the consumer in an efficient and reliable manner. The GTP further envisages increasing the customer base of the power utility from the current level of 2 million to 4 million and the universal electricity access rate from 45% to 75%.   In 2009/2010 fiscal year, the generated energy stood at 4976.5 GWh and the system peak was 913.93 MW. The actual generation was constrained for the three years between 2008 and 2011 due to shortage of generation and transmission capacity. These problems have been alleviated with the commissioning of Tekeze (300 MW) and Beles (460 MW) hydroelectric power plants. With Gibe III (1870mw) expected to be commissioned in 2014, the total electricity generated is going to rise to 4,000 mw. Wind power plants having a total of 770MW capacity are also planned to be commissioned before 2014 in order to avert possible shortfalls and also due to their added advantage in complementing the hydro generations during unfavorable dry periods.     In addition to the projects expected to be commissioned in 2014, there are other projects set for investment. These are:-   No       Name of the project             Installed capacity mw          Status 1.         Tekeze II                              450                                        Under feasibility S. 2.         Derbu I&II                           250+325                                Feasibility S. 3.         Geba I&II                             366                                        Feasibility S. 4.         Gojeb                                     153                                       Feasibility S. 5.         Genale V                               100                                       Reconnaissance 6.         Beko Abo                               1,700                                    Under feasibility S. 7.         Baro I&II and Genji             900                                       Feasibility S. 8.         Menedeya (Blue Nile)          2,000                                     Under feasibility S. 9.         Tams                                     1,060                                     Reconnaissance 10.       Dabus                                    425                                        Reconnaissance 11.       Birbir R                                 467                                        Reconnaissance 12.       Gibe V                                   660                                        Under feasibility S. 13.       Gibe IV                                 1,400                                      Under feasibility S. 14.       Lower Didessa                      613                                         Reconnaissance 15.       Wabishebele                          87                                          Under feasibility S.   Total                                                 10,956   With the highly expected 6,000 mw from the Great Ethiopian Renaissance Dam, the total electricity generated in the country from hydro power stations is expected to exceed 20,000 mw in the coming years.    Regarding the interconnectors the construction of Ethiopia-Djibouti interconnection line is completed and power export has been operational since 2011. The construction of the interconnector (200 MW) with Sudan has been completed and power flow has started. The feasibility study for the 2000 MW HV DC interconnector with Kenya has been completed and is now under construction. The finance for the construction is already secured from development partners and a Power Purchase Agreement between the two countries was agreed and signed. The Eastern Nile Power Trade study project which is commissioned by the Eastern Nile Technical Regional Office under the Nile Basin Initiative has concluded the feasibility of implementing 3200 MW interconnector between Ethiopia, Sudan and Egypt starting from year 2018. Furthermore, the East Africa Power Pool master plan study has recommended expediting and making on-line the Ethiopia-Sudan-Egypt and the Ethiopia-Kenya interconnection lines before 2016 in order to increase the regional interconnection benefits.   Wind Energy      Ethiopia has very rich wind energy generation potential. A study conducted by the Chinese which is of relevance in designing Ethiopia’s wind and solar master plan denotes that the country has a potential capacity of 1.3 million mw.  The ambitious Carbon Resilient Green Economy (CRGE) target of Ethiopia sets 2,000 mw to be generated from wind by 2030 while there are plans to produce 890 mw of wind energy by the 2014/15 fiscal year – the last year of the Growth and Transformation Plan (GTP).   As water levels fluctuate during the rainy and dry seasons, the electricity generated from water resources fluctuates as well leading to power shortages especially in the dry season. Wind energy is, in that regard, considered complementary to hydro power as wind and consequently the energy harvested from it become stronger during the dry season making up to the reduced amount of power generated from hydro power plants during that period. Considering that wind projects are cheaper and take relatively smaller space to install than the conventional gasoline fuelled generators, it becomes obvious that wind energy is the efficient remedy of power shortages in Ethiopia. Accordingly, a number of wind power generation projects have already been commissioned with more on the pipeline. As can be expected, some projects are on the feasibility study stage while others are on different stages of construction. Those that have already been commissioned and thus producing electricity include:-   1.    The Adam I wind farm:- located 95 kms from Addis Ababa, the capital, at the entry point of Adama town, the wind farm produces 51mw of electricity. The farm is made up of 34 turbines with each capable of producing 1.5mw. A Chinese joint venture comprising CGCOC and Hydro China carried out the construction while the Addis Ababa University Technology Faculty provided the consulting services. The 117 million USD Adama project is financed through a loan from the Export-Import Bank of China.   2.    The Ashegoda wind farm:- located about 760 km north of the capital Addis in Tigray regional state, the Ashegoda wind farm produces 120 mw of electricity. The farm consists of 54 wind turbines with a capacity of 1.67 mw each and another 30 with a capacity of 1 mw. The construction was undertaken by the French company Vergniet S.E at a cost of 300 million USD. The project received loan from French financial firms.   There are also other wind farm projects under construction and the most notable of them is the Aysha I wind farm. Located near the Ethio-Djibouti border in the Somali regional state, the Aysha wind farm produces 300 mw of electricity. Construction activities on the project are categorized into three phases the first of which is set to begin any time now. The first phase is expected to produce 120 mw of electricity and the Chinese company Dongfang Wind is in charge of the construction. The second phase is also expected to produce 120 mw of electricity with the company to manage it not specified until now by the European Investment Bank yet. The interesting thing about the third phase that is expected to produce 60 mw is that it is scheduled to be constructed by the state-owned Metal and Engineering Corporation in collaboration with a Chinese company. The three phases are designed to produce 300 mw in total and there would hopefully be expansion on the wind farm in Somali region of Ethiopia once these phases prove to be a success. In addition to the Aysha I wind project, the Ministry of Water and Energy (MoWE) has disclosed that the feasibility study for the 153 mw Adama II wind farm has been completed with the construction set to start soon. Other projects in the pipeline that are scheduled for construction recently include the 100 mw Debre Birhan wind farm located north of Addis Ababa, the 100 mw Assela wind farm project located on the South East of the capital, the 250 mw Galema I wind project and the 42 mw Mesebo Harena wind farm. Apart from the above mentioned projects that are on the brink of construction, the Ministry has selected sites for future wind energy generation across the whole of the country. Accordingly, thirty three sites have been short listed for future wind energy development. The following table shows the potential installed capacity of wind energy in each state and the whole country:- State Area (1,000 km2) Potential installed capacity (GW) Amhara 155.0 59 Tigray 50.2 78 Afar 94.1 52 SNNP 109.9 26 Gembela 24.6 0 Oromiya 320.0 75 Benshagul 49.5 0 Somali 300.3 1,060 Ethiopia 1,103.6 1,350   Although the marks of local companies is barely visible in the wind energy projects already completed in the country, a better day for their involvement seems just around the corner. The responsible government offices have set the schemes to aim not only at power generation from wind but also to enhance local expertise and resources. The responsible government organs have started to include technology transfer and capacity building of local staff in the wind farm projects they sign with foreign companies. Efforts to enhance technology transfer and capacity building include training local wind energy based industries and providing them with contracts. Although it is still hard to find competent local businesses that can produce up to standard high-technology products, there have been positive notes on increasing local capacity to produce towers and blades of wind turbines. Some even go further to estimate that local companies, at present, can make up to 50% of the value-added products needed for wind turbines. The assignment of the Metal and Engineering Corporation to carry out the third phase of Aysha I wind farm that is expected to generate 60 mw of electricity is a commendable step in the right direction. With such accelerated trends of technology transfer and capacity building, it will not be long before we see Ethiopian companies take on wind farms by themselves. Solar Energy     Dubbed as the country with “13 months of sunshine”, Ethiopia enjoys year round sunny weather. That goes along with its great potential for solar energy generation. The Chinese study of Wind and Solar Master Plan for Ethiopia denotes that the country has an annual solar energy reserve of over 2 million TWH.  For all the great potential that Ethiopia has to develop solar energy, the country has barely harnessed it. The writer could not access any primary or secondary data that could verify the presence of a single solar farm in Ethiopia. There are, however, capacity building measures being taken to strengthen the technical and financial capacities of manufacturing industries relevant to this section of the energy sector. Assembly and maintenance of solar panels has seen a steep increase in recent years. Apart from the governmental channel, there are notable contributions by Non Governmental Organizations (NGOs) to replace kerosene lamps with solar solutions and even power televisions and radios. Oil exploration                Although it is a fact that Ethiopia has always been a non oil producing country, the prospects for discovering commercial reserves have always been high. There was at least a moment during the reign of emperor Haileselassie and the derge when the hope of oil discovery was disclosed by the heads of state to send the whole country in to a euphoric mood. What is going on these days, however, is making the whole east African region ecstatic.        “There has been a surge in exploration interest throughout the East African region based on a growing consensus about the potential for a major regional hydrocarbon system referred to as the East African Rift System. Recent oil discoveries in the East African Rift System in countries like Uganda and Kenya and the natural gas discovery in Tanzania drew the attention of oil companies to the East African Rift System and Ethiopia is part of this system.” (The Reporter) According to the article cited above, Ethiopia has five sedimentary basin prospective areas for oil and gas reserves discovery. Hydrocarbon resources (oil and gas reserves) are found in sedimentary basins. These basins are found in Ogaden, Gambella, Omo Valley, Abay gorge and Mekelle. Studies undertaken by the Ethiopian Ministry of Mines and Petronas, the Malaysian oil and gas giant, indicate that the two most promising hydrocarbon areas in Ethiopia are the Gambella and Ogaden basins. The Gambella Basin is believed to be geologically analogous to South Sudan. The Ogaden basin is a vast arid land in the remote eastern part of Ethiopia. Since the sedimentary basin has an equivalent age similar geological formation with that of oil productive basins in the Middle East it has been considered as the most promising area for oil reserve discovery. Relatively speaking, it is the most explored basin.  A total of eight international companies have shown an interest for exploration in Ethiopia since 2005, of which seven have signed the Production Sharing Agreement (PSA), and one [Africa Oil Corporation] has signed a joint study agreement in addition to the PSA. South West Energy Ltd recently announced a Competent Persons Report (CPR) prepared by independent consultant Senergy Limited for the company’s Gambella basin block(s) and Jijiga basin. The CPR concluded the potential of the Gambella and Jijiga basins have best estimate Prospective Resources of 1.56 billion barrels and a high of 2.9 Billion Net Undiscovered Play Assessed Prospective Resources. The Chairman and CEO of SouthWest Energy, Mr. Tewodros Ashenafi commented: “I am very pleased to announce the result of the CPR by Senergy, which I consider a significant step forward for our company and a strong validation of our work to date. The release of the CPR report was welcomed by, Mrs. Sinkinesh Ejigu, Minister of Mines for the Federal Democratic Republic of Ethiopia. “I am pleased to note the release of this important report from Ethiopian oil and gas exploration company SouthWest Energy. I congratulate the company and wish it every success in this important next step in the quest to find onshore oil in our country.” Although the discovery of oil has not been confirmed yet, reports emerge of significant steps in that direction from time to time. With recently vamped exploration activities in the country, the prospect of discovery is closer than ever. Conclusion       As we have tried to deal with in the first part of this article, sound energy policies that consider the future population serge, the economic growth of the country and the resulting increased appétit for energy have been put in place. It is not just that the policies try to avail more power in the country in the coming years; they also grant green environmental efforts justice. In this regard, there have been considerable activities to harness the abundant renewable energy resources of the country. Consequently, various projects to harness and make use of geothermal, hydro, wind and solar energy have been extensively carried out with yet more numerous projects in the pipeline. Exploration of oil resources has also been pronounced until recently with more prospects given to the East African Rift System of which Ethiopia is a member. The positive indicators in the direction of discovery are encouraging besides proving the fact that Ethiopia will inevitably be an oil producing country in the near future. In general, the future for energy generation in our country seems to be brighter. Further efforts to overcome yet unforeseen upcoming energy gaps in fulfilling future demands need the uninterrupted upgrading of present plans. Despite the long way we have come towards overcoming energy problems, even more needs to be done to ensure the country has a carbon resilient green economy.