Ethiopia accelerates its National Electrification Program and moves to phase two, with the goal of giving energy access to all citizens by 2025. The program aims to combine the on-grid system with the off-grid and outlines how the country intends to achieve universal access to electricity. In particular, the goal is to connect 65 percent of the total population to the grid, while the remaining 35 percent will be supplied through off-grid services, that is, not connected to electricity transmission. Translated into numbers, over the next six years the government plans to create 8.2 million new users on the national grid and to supply energy to another six million new homes through off-grid.
According to what was declared by the head of the Ministry of Water, Irrigation and Electricity (the so-called “MoWIE”) Seleshi Bekele, more than half of the six billion dollars of direct investments foreseen by the National Electrification Program to guarantee access to universal energy will be allocated to the infrastructure connected to the grid.
In NEP 2.0, the government provided an update on the progress achieved over the past year. According to the update, Ethiopia connected 44 percent of the population to electricity sources: 33% to grid electrification and 11% to off-grid services. The ministry has already launched pilot projects with the first mini-grids that can power twelve remote communities across the country. This is the first update of the National Electrification Program, launched for the first time at the end of 2017 with a programmatic framework of objectives, deadlines, roles and responsibilities of the institutions.
MoWIE will be joined by local industry leaders and international experts to discuss the future of the program, including the introduction of tariffs that reflect real costs, further unbundling of generation and transmission and improving the performance of industry institutions. These measures also aim to attract private participation and investment in renewable energy.
The government has already announced a tender for six mega solar projects worth $798 million, with an estimated capacity of around 750 megawatts (MW). Current power generation is highly dependent on hydroelectricity, which produces 3,800 MW equal to 89% of the total generation capacity. Economic growth will also lead to an increase in electricity demand in the coming years.
To identify possible critical issues and suggest corrective measures, the “Integration of Variable Energy on the National Electric System” study was launched by the Ethiopia Electric Power and RES4Africa, which will also assess the optimal amount of renewable energy to be integrated into the Ethiopian system between 2025 and 2030.
The aim is to obtain a more balanced energy mix between solar, wind and geothermal energy that diversifies the security of supply. The plan is to install 2,400 MW of wind power and 3,500 MW photovoltaic capacity by 2025, with another 3,600 MW from wind and 5,300 MW from the sun by 2030.
Addis Ababa has the ambition to become a global exporter of clean and cheap energy and according to the 2019 Economic Outlook prepared by the African Development Bank (AfDB), Ethiopia will earn one billion dollars from exports by 2020. Currently, the Ethiopian electricity system is interconnected with Sudan and Djibouti for a total net transfer capacity of 300 MW. The 2,000 MW interconnection with Kenya is at an advanced stage and a new interconnection with Sudan will add another 3,000 MW. In the future, the main importing country should be Sudan, with 67% in 2025 and 93% in 2030. Exporting to neighboring countries in the presence of additional capacity could lead to net benefits of up to 1.6 billion dollars in 2025 and reach 2.4 billion in 2030. For more development of energy exports, the country should develop the legal sector and improve the legal framework to involve the private sector more, according to experts.