World's Largest Bio-diesel producing country!

Addis Ababa, Ethiopia -- Policy-makers in Ethiopia, challenged by fluctuating oil prices and poverty, are seeking solutions that will improve the living conditions of its people and boost its fragile economy. One such solution, Ethiopian leaders hope, is renewable energy.

Statistics from the Ethiopian Ministry of Mines and Energy (MoME) indicate that the country spends about Ethiopian Birr 10 billion (US$800 million) annually to import petroleum products for domestic consumption. The figure, according to the MoME represents more than 90 percent of Ethiopia’s earnings from foreign trade each year. Were the country to tap some of its renewable energy potential, the energy independence it would achieve as a result, would be a boon to the economy.

Because of its location, Ethiopia is perhaps one of the most-suitable nations in Africa for tapping renewable sources of energy not only for its own economy, but also for export into regional economies such as Kenya, which is always looking at enhancing its energy capacity.

Biodiesel Production

While Ethiopia boasts of numerous green energy possibilities such as geothermal, solar and wind power generation, it is the biodiesel sub-sector that has taken off over the last few years and continues to witness increased attention both from the government and development partners from abroad.

Ethiopia is one of the largest countries in Africa but it is also one of the driest, a factor that renders most of its land unsuitable for agricultural production. This has led the Ethiopian government to shift its focus to biodiesel crops that flourish under the harsh climatic conditions of Ethiopia.

The shift from expensive fossil fuels to cost-effective biofuels has received a stamp of approval from the Ethiopian government. It recently approved a 16-page renewable energy strategic document that was prepared under a collaborative partnership between the MoME, the Ministry of Trade and Industry (MoTI) and the Ministry of Agriculture and Rural Development (MoARD).

According to an expert from the Ministry of Finance and Economic Development (MoFED), as the country has grown over the last few years, it has had to devote more and more of its already limited resources towards the purchase of petroleum products and now sees a clear need for cheaper energy that it hopes to get through renewables.

The most popular biodiesel plants in Ethiopia include castor seeds and jatropha curcas. Numerous companies from India, Europe, Israel and the United States have formed joint partnerships with local companies to help grow the plants for biodiesel extraction.

One of these companies that has already started operations is Global Energy Ethiopia (GEE), which has pumped in more than Ethiopian Birr 200 million (US$ 20 million) in a castor and jatropha seed farming and processing program that will allow GEE to process more than 40,000 tonnes of crude oil when fully operational. GEE started production in 2007 after it leased more than 30,000 hectares of land in Wolaita Soddo in the Southern Nations Nationalities and Peoples Regional State (SNNPR).

The World’s Largest Biodiesel Producer?

In addition to GEE, Eco Energy is an Ethiopian company that has entered into a partnership with the Indian-based Jatropha World. The partnership allows for the exchange of technical expertise that will allow Eco Energy to develop a 25,000 hectare jatropha farm for biodiesel production.

According to Robel Debebe, the Chief Executive Officer of Eco Energy, the firm is set to pump in more than Ethiopian Birr 250 million (US$25 million) towards the biodiesel venture that will see the company produce jatropha crude oil for the local market and for export, especially to European nations.

According to MoME, biodiesel offers Ethiopia one of the best alternatives to expensive fossil fuels and accords the progressively expanding Ethiopian economy cheap energy sources. The growing interest in the sector is evident, as the Ethiopian Investment Agency (EIA) has over the last two years registered more than 60 companies interested in venturing into the biodiesel production sub-sector.

According to EIA, there are more than 25 million hectares of land available in Ethiopia suitable for biodiesel crop farming. If fully developed, this would make Ethiopia the largest biodiesel producer in the world, with an annual output of more than 20 million litres of crude oil processed from biodiesel crops.

Economists Advise Ethiopia To Revise Its Energy Policy

Researchers at the Ethiopian Economic Association (EEA) advised Ethiopian policy makers to revise the existing national energy policy to overcome the current energy crises.

This was indicated during the launching of annual Ethiopian economic report published by EEA on March 24,2010.

“The energy policy which was adopted in 1994 is inadequate to address the increasingly complex challenges and the unprecedented energy demand growth of the economy,” says Mengistu Tefera, who participated in depth analysis of Ethiopian energy sector research entitled, ‘Development, Prospects and Challenges of the Energy Sector in Ethiopia’.

Ethiopia’s demand for electricity and petroleum fuels will grow at 11.6 percent and 9.3 percent per year, respectively.

“The demand growth will have serious economic, social and environmental implications and repercussions (the depletion of forest resources will have adverse impacts on fuel supply, soil and water),” the report indicated After the recently inaugurated Gibe II Hydroelectric Power Station interrupted generating power a month ago due to geological problem, EEPCo has started power rationing.

Speaking about the current energy crises of the country at the Parliament last week, Prime Minister Meles Zenawi indicated that the problem will be solved in the coming three weeks.

The report, which for the first time attempted to incorporate all types of Ethiopia’s energy sources (hydropower, petroleum, biomass and renewable energy sources), listed several measures that should be considered by policy makers of the country in order to solve the burning power issue.

“In order to maximize national benefits, policy focus on hydropower needs to be sustained with multiple purpose use for regulated water downstream for power generation, sugar plantations and large-scale farms,” the report advised the government.

“In addition, government has to allow the private investor to be engaged actively in energy generation. The current sole power supplier of the country, the Ethiopian Electric Power Corporation (EEPCo) needs to be efficient as any other profit making private company to serve its customers,” Mengistu said.

In order to reduce the oil import bill of the country, the researchers advised the need to use the natural gas the country has and bio-fuel as transport fuels along with enhancing the ongoing oil and gas exploration.

With regards to biomass energy, on which the majority of Ethiopian population is dependent, the report advised to government to undertake serious review of the current situation with a view to sustain biomass fuel supply.

Reforestation programs should also be strengthened through incentive packages to encourage private sector involvement, according to the report.

The economists also recommended that the country needs to inject wind turbines, geothermal and coal generation units into its system to improve its power generation capacity, which currently highly dependent on hydropower.

“High upfront cost, lack of market infrastructure and after sales maintenance and absence of promotion strategy are the major barriers for dissemination of renewable energy technology in Ethiopia,” said Mekonnen Kassa, who also engaged in the research.

To solve the problems related to renewable energy, the report advised policy makers’ the need for formulating and properly implementing a long-term plan and the introduction innovative financing mechanisms.

The Universal Electric Access Program (UEAP) of the country is not clearly defined to address the problem of electricity access in the rural areas as planned, according to the report.

“UEAP remains undefined as to how close the electricity supply infrastructure would get to rural homes. Moreover, problem of actual connectivity of rural homes has yet to be addressed,” the report stated.

Source: NEW BUSINESS ETHIOPIA

Millennium Dam construction: 5,250 MW of Green Energy

The ceremony is transmitted live on the national television. The government vow to fully finance the dam on the Nile River, which will cost 80 billion birr (around 4.8 billion US dollars at the prevailing exchange rates).

Briefing local and foreign press this week (March 30, 2011) at the Sheraton Addis, Minister of Water and Energy, Alemayehu Tegenu, noted that the government is forced to finance the project alone because Egypt has been engaged in a continuous campaign telling international creditors and donors not to finance Ethiopian projects on the Nile River.

“,,,Using its standing in multilateral financial institutions and the donor community, Egyptian leadership constantly campaigns to0 block any provision of loans and grants to Ethiopia intended to development projects cantered on the Nile,” the Minister said.

“Partly as a scheme to divert attention from its internal weakness, the leadership creates commotion whenever the issue of water resources development is raised. It is in the consequence of such underhanded machination why the Ethiopian government alone bears the cost of the Nile hydroelectric project, despite the well-known fact that ultimately the project benefits both the Sudan and Egypt,” he said.

Recalling that Ethiopia has fully invested a total of 10 billion birr (around 600 million US dollars at the current exchange rates) on dams Tekeze and Beles hydroelectric dams, which began operation last year, Alemayehu said: “Alas, Ethiopia’s resolve has now reached a point of no return”.

The hydroelectric project X, which is now renamed as ‘Millennium Dam on the Nile’, is expected to hold double the size of Lake Tana water (62 billion cubic meters). It will be constructed 20 to 40 kilometers at the east of Sudanese border and will generate 5,250 Mega watts electricity.

Referring to the study conducted on the project by foreign consultants, the Minister indicated that the project will not reduce the amount of water that is flowing to Egypt and the Sudan. He argued it rather enables the two countries to develop more land in irrigation as the Millennium Dam will regulate the water flow.

“…For instance, with only a slight reduction in the water levels of the Aswan Dam of Egypt, more than 7.5 billion cubic meters of water could be saved from evaporation. Moreover, through the implementation of Egypt’s own efficient and effective utilization o0f the Nile River project, up to eight billion cubic meters of water could be saved,” he said.

According to the minister Millennium Dam will be completed in 44 months and two of its units will start generation 700 mega watts of electricity at initial stage. He calls upon the Ethiopian people both the local and the diaspora to buy bonds for the construction of Millennium Dam and leave their mark on Ethiopia’s transformative development.

http://www.youtube.com/watch?v=gQrHM5KexZM&feature=player_embedded

Energy profile of Ethiopia

Introduction

Ethiopia's economy is primarily agrarian, with the agricultural sector accounting for 45 percent of gross domestic product (GDP) and 80 percent of the workforce. Coffee, Ethiopia's primary export crop, accounted for 58 percent of total exports in 1999, and has averaged two-thirds of all export earnings over the last 20 years. Other important agricultural exports include qat (khat), a mild stimulant from the leaves of the Catha Edulis shrub, pulses, oilseeds, live animals and hides. Ethiopia's real GDP growth was 5.4 percent in 2000 and increased to 7.7 percent in 2001. Growth in 2002 slowed to 1.6 percent as a severe drought decimated agricultural production. Growth was –3.9 percent in 2003, as Ethiopia’s economy shrank. It rebounded with 11.6 percent growth in 2004 and 5.4 percent in 2005. The projected growth for 2006 was 5.2 percent.Ethiopia is the oldest independent country in Africa. Unique among African countries, Ethiopia maintained its freedom from colonial rule, except during the Italian occupation of 1936-41. In 1974, a military junta, the Derg, deposed Emperor Haile Selassie, who had ruled since 1930, and established a socialist state. The Derg was toppled by a coalition of rebel forces, the Ethiopian People's Revolutionary Democratic Front (EPRDF), in 1991. A constitution was adopted in 1994, and Ethiopia's first multiparty elections were held in 1995. A two-year border war with Eritrea ended when a peace treaty was signed in December 2000. Disagreement on the location of the border between the two countries is ongoing, despite the final ruling of a commission charged with identifying the border.

Although continued donor support is seen as the crucial element in Ethiopia's economic reform, both the International Monetary Fund (IMF) and World Bank suspended new lending to Ethiopia during the border war with Eritrea. The suspension was lifted after the signing of the peace accord in December 2000. The World Bank approved a $400 million loan to finance emergency recovery, military demobilization and reintegration projects. In July 2001, the IMF approved a $112 million Poverty Reduction and Growth Facility (PGRF) to support Ethiopia's economic program. In November 2001, the IMF and World Bank announced that Ethiopia was eligible for a $1.9 billion debt relief package under the Heavily Indebted Poor Countries (HIPC) Initiative, becoming the 24th country to qualify for debt relief under the HIPC's enhanced framework. The savings in debt service resulting from the HIPC are substantial, amounting to about $96 million per year on average until 2021. The resources made available by debt relief provided under the HIPC have been allocated to key anti-poverty programs. Poverty-targeted expenditures in 2001-02 and 2002-03 increased by $259 million, substantially more than HIPC relief. In 2005, Ethiopia received a $4.9 million grant from the Global Environmental Facility (GEF) to provide solar photovoltaic (PV) systems and micro hydro capacity.

Oil and Natural Gas

Ethiopia's current proven hydrocarbon reserves are minimal, but the potential to increase reserves to commercial viability is seen as promising. The country's geology is similar to that of its oil-producing neighbors to the east (on the Arabian peninsula) and the west (Sudan). In April 2001, the Ministry of Mines and Energy reported that hydrocarbon seeps had been discovered in several regions. The government plans to conduct feasibility studies to establish the extent and viability of the deposits.

Hydrocarbon exploration in Ethiopia's Ogaden Basin began over 80 years ago (Standard Oil in 1920). The Ethiopian government formed the Calub Gas Share Company (CGSC) to develop the fields. In 1994, the World Bank approved a $74 million loan to develop the Ogaden Basin fields. The Ethiopian Privatization Agency (EPA) put the CGSC up for privatization in 1998, but the EPA, citing weak bids, withdrew the tender. In December 1999, Houston-based Sicor announced that it had signed a $1.4 billion joint-venture deal to develop the Calub natural gas project. Under the terms of the agreement, Gasoil Ethiopia Project (GEP), the joint-venture firm, will acquire 95 percent of the CGSC under the Ethiopian government's privatization law. Currently, 5 percent of the CGSC is held by local private investors. The Ethiopian government will hold a 20 percent interest in GEP with Sicor holding the remaining share. GEP plans to construct a 375-mile, 24-inch pipeline to transmit natural gas to the town of Awash, which is approximately 75 miles east of the capital Addis Ababa. At Awash, plans call for construction of a cryogenic liquids plant and twogas-to-liquids process systems with capacity to process 200 million cubic feet per day (Mmcf/d) of natural gas. The end products would be synthetic fuels and petrochemical feedstocks plus steam to generate electricity and help produce 20,000 bbl/d of potablewater. A planned refinery would produce products including diesel, gasoline, kerosene and jet fuels. The gas-to-liquids system would also produce some 500 tons of ammonia per day as feedstock for a urea plant to be constructed. Construction of the pipeline had originally been planned for 2002; however, gas development in Ogaden has not yet begun.

In June 2003, the Ethiopian government signed an oil exploration deal with Petronas for 5,800 square mile tract in Gambela, in the far western part of the country. The region is closely related to the Sudan oil fields. Petronas has committed to investing in regional infrastructure, employing local staff, improving health services, and developing the skills of the Ministry of Mines. Petronas is also interested in natural gas exploration in Ogaden, but no official plans have yet been made.

Downstream

Ethiopia's petroleum consumption was estimated at 32,000 barrels per day (bbl/d) in 2005. With the closure of the Assab refinery in 1997, Ethiopia is totally reliant on imports to meet its petroleum requirements. Some petroleum imports are received at the port ofDjibouti, and shipped via rail and tanker truck to Ethiopia. With the recent development of oil in Sudan, however, Ethiopia has begun importing oil which, under the Common Market for Eastern and Southern Africa (COMESA), is not subject to tariffs. Oil imports from Sudan began in January 2003, transported by tanker trucks along a new road between the two countries. Since the tradebegan, however, oil shipments, which are expected to meet 85 percent of Ethiopia's gasoline requirements, have halted twice. Nevertheless, the two countries have agreed to upgrade the road along this important transit corridor to increase commerce.

Marketing and distribution of petroleum products is performed by ExxonMobil, Shell and Total. In June 2000, Shell purchased the downstream operations of Agip in several African countries, including Ethiopia. The Ethiopian assets included over 100 service stations, two depots and four liquefied petroleum gas (LPG) filling plants.

Electricity

Ethiopia has approximately 690 megawatts (MW) of installed generating capacity. The vast majority of Ethiopia's existing capacity (85 percent) is hydroelectric. The Ethiopian Electric Power Corporation (EEPCO), the state-owned firm responsible for electricity generation, plans to construct several new generating facilities to provide electricity to Ethiopia. Currently, less than half of Ethiopia's towns have access to electricity, though EEPCO electrified more than eighty towns between 2001 and 2003. Since most of Ethiopia's electricity is generated from hydroelectric dams, the country's power system is vulnerable to extended droughts. Ethiopia recently endured more than six months of power cuts due to low water levels in dams around the country. Initiallyblackouts were scheduled once a week, but as the drought wore on, customers lost power for 15 hours two days a week, a situation that strained the resources of many businesses in urban centers.

EEPCO is rapidly expanding its generating capacity. The 73-MW Tis Abay 2 facility, located on the Blue Nile (Abay) came online in 2001. U.S.-based Harza Engineering (now MWH Global) is overseeing the construction of an additional 34-MW unit at the Finchaa hydroelectric facility in western Ethiopia. The 180-MW Gilgel Gibe hydroelectric facility began commercial operations in 2004. Gilgel Gibe, located on the Omo River in southwestern Ethiopia, increased the country's power capacity to 690 MW. EEPCO has begun construction of Ethiopia's largest hydroelectric generating facility at Tekeze. The dam will have a height of 513 feet, making it the tallest dam in Africa. The 300-MW hydroelectric facility will be located in northern Ethiopia and will cost about $350 million.

The Gojeb power plant is Ethiopia's first Independent Power Project (IPP). This 150-MW hydroelectric plant was built in western Ethiopia and started commercial operation in 2004. The project was developed by Mohammed International Development Research Organization & Companies (Midroc). Midroc sells the output from Gojeb to EEPCO. Agreements on additional IPP projects were signed in June 2001. The largest facility will be the 162-megawatt (MW) Genale hydroelectric facility located on the border between the Oromia Region and the Southern Peoples Nationalities Regional State. The plants will be built under the Build-Operate-Transfer (BOT) system. ENERCO will operate the facilities for 30 years, which would be renewable for another 30 years.

In April 2001, Ethiopia signed agreements to export electricity to neighboring Djibouti. Negotiations were ongoing, and exports were expected to begin in 2004, following the interconnection of the countries' electric grids.

Energy in Ethiopia

Ethiopia is one of the few African countries with the potential to produce hydroelectric and geothermal power. As of mid-1991, however, no comprehensive assessment of this potential was available, although some estimates indicated that the total potential could be as much as l43 billion kilowatts. The main sources of this potential were thought to be the Abay (Blue Nile; 79.9 billion kilowatts), the Shebele (2l.6 billion kilowatts), and the Omo (l6.l billion kilowatts). The remaining 25.9 billion kilowatts would come from rivers such as the Tekezé, Awash, Baro, Genale, and Mereb.

Ethiopia's first large hydroelectric generating facilities were constructed in the Awash River basin. The three plants- -Awash I (Koka) with 54,000 kilowatts capacity, Awash II with 32,000 kilowatts capacity, and Awash III with 32,000 kilowatts capacity--were finished between l960 and l972. In l974 the Fincha River facility in central Welega opened with a generating capacity of 84,000 kilowatts. Other major power-generating facilities included those at Bahir Dar (7,680 kilowatts) and Aba Samuel (6,560 kilowatts). The total installed capacity of thermal generating units amounted to 210,084 kilowatts in l985/86.

Tekeze dam Under constraction

Electric power production in l985/86 totaled 998.7 million kilowatt-hours, 83 percent of which was produced by hydroelectric power installations. Thermal generating units produced the remaining 17 percent. The thermal generating units in the public utility system, many of which were comparatively small, had a generating capacity of 95,635 kilowatts in l985. Major units were located close to Asmera (3l,900 kilowatts), Dire Dawa (4,500 kilowatts), Addis Ababa (3,l00 kilowatts), and Aseb (3,l00 kilowatts). In l985/86 various business enterprises and local communities owned electrical generators of unspecified capacity.
The regional electrical distribution system included an interconnected system and a self-contained system. By 1988 most power generating sources, including all major hydroelectric power plants, were interconnected in a power grid. The interconnected system served more than l00 towns. Power from the Awash, Fincha, and Aba Samuel stations ran the central system, the largest component of the interconnected system. The Bahir Dar interconnected system, which served parts of Gojam and Gonder, and the Eritrean Region Electricity Supply Agency (ERESA) were two of the other major systems. A majority of the self-contained systems got their power from thermal power plants, with the power often being used for domestic purposes and to run small mills.
The Ethiopian Electric Light and Power Authority (ELPA), a government corporation, operated most of the country's power systems. Prior to the revolution, ELPA incorporated more than forty electric power stations and generated about 80 percent of the nation's total electrical output. Two Italian firms, Società Elettrica dell'Africa Orientale and Compagnia Nazionale Impresse Elettriche, chiefly serving Eritrea, produced another l6.5 percent of the country's electrical energy. Independent stations generated the remaining 3 to 4 percent. In 1975 the government nationalized all private utility companies and placed them under ELPA. Since then, utility services have been reserved exclusively to the state. In l987 ELPA served about l70 towns and produced about 92 percent of the national electrical output. Mass organizations, sugar factories, and the Aseb refinery administered the remaining 8 percent.
In 1985/86, of the total 847.7 million kilowatt-hours of power sold by ELPA, 59 percent was for industrial use, 29 percent for domestic use, l0 percent for commercial use, and the remaining 2 percent for other uses such as street lighting and agriculture. By 1987 about 9 percent of the total population (4.3 million people) were using electricity.
Ethiopia's second commercial energy resource is oil. Despite reports of natural gas reserves and traces of petroleum, Ethiopia still depends on imported crude oil, which accounted for an average of about l2 percent of the value of imports during the period l982/83 to l987/88. Exploration for petroleum and natural gas in the Ogaden and the Red Sea basin has been going on for many years. In May l988, International Petroleum, a subsidiary of Canada's International Petroleum Corporation (IPC), signed a production sharing and exploration license for the Denakil block, which covers 34,000 square kilometers on and off shore along the Red Sea coast. The IPC also has conducted geothermal studies and undertaken mapping projects. In late 1990, the government announced that geologists had discovered oil in western Ilubabor, with an expected deposit ranging from 100 million to 120 million tons.
Since the early 1970s, there has been exploration and development of geothermal resources in the Great Rift Valley. In early 1972, the United Nations Development Programme (UNDP) conducted preliminary explorations in the area and detected what appeared to be one of the world's largest potential sources of geothermal power. In mid-1979 the EEC, assisted by the UNDP, provided a grant to aid exploration in the valley's lake region. In l984 Ethiopia reported the discovery of a promising geothermal source in the Lake Langano area. However, no indication has been provided as to when production will start. The primary energy sources for most Ethiopians are charcoal, animal manure, and firewood. Some estimates indicate that as much as 96 percent of the country's total energy consumption is based on these traditional sources.