USAID/NARUC/ EKT- East Africa Regional Regulatory

1st Partnership Exchange:

ETHIOPIA POWER SECTOR OVERVIEW

Presentation Outline 2

Country Overview

Power Sector Overview

Government policy highlights &-

Regulatory framework overview

Concluding Remarks

Country Overview 3

Federal Democratic Republic of

Ethiopia .

The Federal State is composed of 9(Nine)

regional State and 2 Cities under the direct

oversight of the Federal Government.

Map

Country Overview cont… 4

Country overview con--- Regional States Map 5

Country Overview cont. 6

Location: Eastern Africa, west of Somalia Lies within 15 degrees North of the Equator,

Terrain: high plateau with central mountain range

divided by Great Rift Valley

Size; Total: 1.127,127 sq km water: 7,444 sq km land: 1,119,683 sq km

Altitude extremes: lowest point: Denakil Depression-125 meter below sea

level

highest point: Ras Dejen 4,620 meter above sea level

Population about 86 Million • Rural population: 85% and • Urban population:15%

Country Overview cont. 7

Cool Zone -Areas above 2,600 m (8,530 ft)

Temperate Zone -Areas between 1,500 m (4,920 ft)

and 2,600 m (8,530ft)

Hot Zone -Areas below 1,500 m (4,920 ft) with both

tropical and arid conditions

Rainy season lasts from mid-June to mid-September

(longer in the southern highlands) preceded by

intermittent showers from February or March;

remainder of the year is generally dry

Ethiopian Power Sector overview

Energy Supply

Ethiopia’s domestic energy resources are mainly

renewable consisting of :

Hydropower (45 GW),

Wind (1,350 GW), considering areas more

than 7.5m/s at 50 meters above ground

level.

Geothermal (5 GW),

Solar energy (5.5 kWh/m2.d)3

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Bioenergy (96 Mtons yield/y)

known reserves of:

Coal (260 million ton) and

Natural gas (4.7TCF).

The country relies heavily on bio-

energy resources to meet its energy

demand.

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Current development plans are

expected to shift the

characteristics of energy supply

and use in Ethiopia. Supply side

plans include increasing power

supply capacity by four fold by

2015.

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Energy Demand

Domestic energy consumption in

Ethiopia is estimated at 1,300PJ.

The Residential sector accounts for

93% of the total energy consumed

in Ethiopia

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The main energy requirements in

the residential sector are for

cooking and baking.

The residential sector consumes

37% of the total electricity

supplied.

Per-capita consumption of

electricity is about 48.2 kWh/year.

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The industry sector consumes 37%

of the electricity supplied.

The commercial services and the

social services/health facilities,

educational facilities water supply

services etc../ together accounts

26% of the electricity supplied.

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Currently the demand side

plans for introduction of

extensive rail network, both

inter city and intra city, which

will introduce demand for

electricity from the transport

sector.

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Ethiopian Power sector overview cont.

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Power companies:

The Ethiopian Electric Power

and

Ethiopian Electric Utility

are the Enterprises involved

in the power sector at large.

---- overview cont. 16

EEP and EEU are established by

Council of Minister regulation

no.302/2013 and 303/2013

respectively. These companies

emerged to exist as a result of

restructuring the form vertically

integrated company EEPCO/ Ethiopian Electric Power Co-operation /

EEP is in charge of among others:

Power generation, Transmission and

Substation construction and upgrading

Electricity generation and Transmission

operational and maintenance activities

Lease electricity transmission line as

required

Sell bulk electric power

Undertake Universal electric access works

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overview cont….

EEU on the other hand is in charge of

among others;

Construct ,maintain and administer electric

distribution network

Purchase bulk electric power and sell to

electric energy to consumers

Initiate electric tariff, and upon

approval implement the same.

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Government Policy The Ethiopian Energy Policy reveals that, its

objectives is to:

• Timely supply;

• Transform traditional energy;

• Provide dependable and economical

energy supply;

• Prevent/mitigate negative

environmental impact;

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Expand power generation,

transmission & distribution;

Promote private sector in commercial

energy;

Promote energy efficiency at:

production, transmission,

distribution and consumption level.

Ongoing projects under the GTP of Ethiopia

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Ethiopian Government has developed a five year

Growth and Transformation Plan.

The strategic directions during the plan period are:

development of renewable energy,

expansion of energy infrastructure, and

creation of an institutional capacity that can

effectively and efficiently manage such energy

sources and the infrastructure

Programs 22

In order to meet the Government’s GTP various

programs including:

Electric power generation

Electricity transmission lines construction

The power distribution and expansion

The Universal Electrification Access

Programs are under way.

Energy relevant targets (access, capacity, generation,

energy security)

2010 & Targets Unit Base - 2010 Target - 2015

Power – on grid

Installed power MW 2,000 8,000

Distribution lines Km 126,038 258,038

Transmission lines

(66kV and above) Km 11,537 17,053

Customers No. (million) 2.0 4.0

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Power – off grid

Solar home and

institutional systems No. (million) < 0.02 0.15

Solar lanterns No. (million) < 0.02 3.0

Other programs

Solar thermal systems

(cookers, heaters) No. NA - 13,500

Liquid biofuel

production Liters (million/yr) 7.0 1,630

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Liquid biofuel roduction

Liters (million/yr) 7.0 1,630

Clean cook

stoves No.(million) 7.0 16.00

Access to electricity % 15 75

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Regulatory Overview

ETHOPIAN ENERGY SECTOR STRATIGIC DIRECTION

The Regulatory framework will

be effectively enforced.

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ETHIOPIAN ENERGY AUTHORITY/EEA/

ORGANIZATIONAL FRAMEWORK

under construction

The law provides the framework to

consider:

Board, General Director, Deputy General

Director and necessary staff

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Legal Framework for EEA EFDR- Constitution

Energy Proclamation No.810/2013

Council of Ministers Regulation to Establish EEA No.

308/2014

Council of Ministers Regulation No. ---/---- under

construction

Bylaws- under construction

Legal Framework for Delegated functions to EEA

Investment Proclamation No .769/2012.

Council of Minister Regulation on Investment no.270/

2012

Proclamation no.686/2002

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Core functions EEA as stipulated under

Energy Proclamation no.810/2013

Regulation :

Technical – Inspection, Quality

supervision and control licensee’s and

competency certificate holders

Economic – Recommend viable &

Sustainable tariff for grid and Approves

off-grid Tariff

Legal- Settlement of Disputes

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Licensing :

Issue and Renew License for : Generation,

Transmission, Distribution and Sale,

Import/Export of Electricity

Provide own consumption production permit

Issue and Renew Competency Certificate

Undertake Energy efficiency and Conservation

Activities :-

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Establish and Administer Energy Efficiency and

Conservation fund.

Develop and execute national energy efficiency and

conservation strategies and program’s

Regulate Energy efficiency and Conservation Activities

through various means application, like;

Energy efficiency labeling code

Minimum energy efficiency standard

Mandatory energy Audit

Voluntary agreement

Etc…

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Delegated functions to EEA

To Issue Electric Investment Permit

To Issue Electric and Electric Related

Business Competency Certificate

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Strength and Weakness of the Power sector

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Strength Existence of Policy direction to curve the gap

between demand and supply of power

Government political and leadership

commitment to develop modern energy sources

Existence of potential electric energy for

development at large

Re-structuring action taken on power sector COMPANY

Activities underway to reinforce the regulator.

Weakness

Lack of technical - know Skill

Limited soft and hard infrastructure

capacity development

Lack of sustained and continuous

human capital development

program

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Limited practical training

opportunity in the area of:

Economic regulation

Governance regulation

Substantive Regulation and

Energy efficiency and

conservation activities

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Upcoming 36 The Development of GTP 2 is

underway

IPP’s are highly motivated to take part

in the investment climate of the power

sector in Ethiopia

The cropping up of Power Trade

interest between and among nations

New regulation is under construction

Conclusion 37

The prevalence of high political

commitment supported by strategic direction

and law to enforce national regulatory

system.

The existence of an effort underway to

materialize the regulatory enforcement

bylaws and organizational framework

development.

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The recognition of the Ethiopian government that the role of the private sector and foreign investment is critical in the development effort of the country.

Cross boarder Power trade interest between and among nations

Highly demands to equip the power sector with required soft and hard infrastructure development so that the legal and institutional framework already in place can render the required service as per their establishment intention/purpose.

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MANY THANKS FOR YOUR ATTENTION

ETHIIOPIAN ENERGY AUTHORITY

Email: energy.Authority@ethionet.et

WWW.ethioenergauthority.gov.et