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Occasional  Paper 24:The Potential Contribution of Renewables in Ethiopia’s Energy Sector - An Analysis of Geothermal and Cogeneration Technologies

By 

Prof. Wolde Ghiorgis Woldemariam 

AFREPREN/FWD - Energy, Environment and Development Network for Africa

Heinrich Böll Foundation Regional Office for Eastern and Horn of Africa


Executive  Summary

This study set out to investigate the viability of meeting 10% of Ethiopia’s electricity generation using geothermal and biomass-based cogeneration within the coming decade. The study established that at least 700 MWe of geothermal energy potential exists within the Rift Valley Region of the country, but this potential is largely underdeveloped. Out of the untapped geothermal resources, it is estimated that geothermal power in the range of 100 MWe - 120 MWe can be harnessed successfully within the coming decade, thus contributing to about 24% of the current electricity installed capacity. The 5% geothermal proposal is in line with the planned expansion of the existing electric power generation capacity in the country, which is expected to grow in the range of 2000 MWe - 2400 MWe. Up to 30 MWe of electricity can be generated by the existing sugar factories from bagasse-based cogeneration. 

The maximum capital cost required to develop geothermal resources in the next decade is estimated at US$ 2,466/kW while permanent jobs would be created at a rate greater than 2 persons/MWe. Generation cost are estimated at 6.5 US cents per kilowatt-hour. In addition, the failed pilot geothermal plant is thought to be repairable and expandable up to 30 MWe for a lifetime of 30 years. 

The study also addressed the merits and demerits of developing these two technologies in Ethiopia. Developments of geothermal resources in Ethiopia will therefore be feasible and attractive for two reasons. Firstly, because constructions of dams or thermal plants based on diesel generation will be significantly minimized; leading to major economic advantages in favor of geothermal plants. Secondly, there are solid economic opportunities and benefits for exporting electricity to neighboring countries reliably and profitably in the near future using a mix of energy resources. Recent experiences with unexpected and prolonged drought have amply shown that the national supply of electricity could be severely disrupted. When the generation capacity is guaranteed and strengthened by adding geothermal energy to the hydro energy resources of the country; probable disruptions in the generated supply will be greatly minimized. 

However, the envisaged power development schemes using geothermal resources in Ethiopia have been greatly hampered by inadequate and/or incompetent management of the system development process, including non-definitive appraisals of resources and lack of viable designs that take into account all measures of risk elements associated with geothermal plants. While the resources are waiting to be developed, the demand for electric energy is rising from a conservative estimate of 8% to 15.8% annually. Over next decade, the growth rate could still be higher. For instance, even quadrupling the existing electricity installed capacity may not match the projected significant increase of demand for power, taking into account the estimated increase population from 70 million to 95 million in ten years. 

Policy recommendations needed to promote and develop both geothermal and cogeneration energy resources, within a wider framework of renewable energy technologies, are provided. 

To realise the above estimated potential, it is strongly recommended that modern energy services are planned and improved through the promotion and dissemination of renewable energy technologies for income-generating and socio-economic activities. On the utilization of geothermal energy, it is recommended that the 5% geothermal target can be implemented within the next ten years provided geothermal energy development is given adequate priority comparable to that given to hydro power schemes. Another recommendation is that the failed pilot geothermal power plant should be repaired and expanded. Moreover, in line with the agriculture-led industrialization national strategy, the viability of cogeneration exists and this should be accompanied by the expansion of sugar factories. 

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