Why is Ethiopia a critical juncture in its energy journey?

Ethiopia stands at a critical juncture in its energy journey. The country has ambitious plans to harness its vast renewable energy potential, reform its power sector, and achieve universal electricity access. While these goals offer tremendous opportunities, they also present significant challenges.

Why is the energy sector important in Ethiopia?

As energy is the backbone of industrial development, public investment has focused on developing the energy sector. In addition, to achieve its goal of increasing power generation capacity of Ethiopia four-fold by 2030, the government has called for the participation of the private sector.

Why does Ethiopia have a low electricity supply?

Despite abundant resources, Ethiopia’s per capita electricity consumption of 100kWh per year is the third-largest electricity access deficit in sub-Saharan Africa. Use of electricity for socioeconomic development is low. Consequently, Ethiopia’s energy supply is highly dependent on biomass resources, namely firewood and agricultural waste.

Does Ethiopia have a legal framework to procure electricity from independent producers?

The legal and institutional framework to facilitate electricity procurement from independent producers has taken off from a solid foundation and resulted in several ongoing projects. Since 2018, Ethiopia held two tenders to procure 1,000MW of electricity.

How much electricity does Ethiopia use per capita?

On average, per capita electricity consumption remains low at less than 100 kWh per year, far below the average 500 kWh per capita energy consumption across African countries. The largest sources of energy consumption (about 87%) in Ethiopia remain traditional fuels. Demand for electricity is rapidly increasing in Ethiopia—by 30-35% annually.

What is the future of electricity in Ethiopia?

Demand for electricity is rapidly increasing in Ethiopia—by 30-35% annually. The largest expected increase is projected to come from the industrial sector, with an estimated average annual growth of 11.6% from 2012 to 2030 (from 4.4 billion kWh in 2013 to 31.4 billion kWh in 2030).