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Working Paper 381
Capacity Building for Renewable Energy SMEs in Africa
Mr. Francis A. Songela
AFREPREN/FWD is implementing a project ‘‘Capacity Building for Renewable Energy SMEs in Africa (CABURESA)’’ This is a regional project aiming at promoting renewables (mainly biomass-based cogeneration, small hydro, wind and solar energy) and energy efficiency in Eastern and Southern African countries. The overall development objective of the project is using renewable energy to strengthen existing and embryonic SMEs, agro-industries, tourist entities and rural institutions such as schools, hospitals, welfare homes and churches. The project is also engaging relevant key stakeholders involved in pro-poor renewables development through training, technical assistance and investment support.
Through this project, in June 2009, AFREPREN hired a consultant to assess renewable energy development in Tanzania in order to provide the baseline data and highlight key issues for future planning of CABURESA project and other renewable energy programmes. The main focus of the assessment was on biomass –based cogeneration, small hydro, wind and solar energy.
National energy demand
Tanzania is characterized by low per capita consumption of commercial energy (petroleum, coal and electricity) and relatively high dependence on biomass fuels. The quantitative distribution of the different energy sources to the energy balance are: biomass fuels 90%, Petroleum 8%, electricity 1.2% and others less than 1% (includes coal and renewable energy sources).
It is estimated that only 11% of country’s population has access to electricity (only 2% of rural population where 80% of country population live and 37% of urban population). The government of Tanzania has set targets to increase proportion of the Tanzanians with access to electricity by 2010. Targets are 5 % for rural population and 20 % for overall proportion of the Tanzanian.
Tanzania has significant renewable energy sources which can contribute to the energy balance but the energy sector is facing number of challenges such as institutional framework, inadequate technical skills and experience and limited financial resources. In addressing these challenges, the government of Tanzania has developed number of policies, strategies and regulations that are designed to promote development of renewable energy technologies for power generation.
Based on natural forests, plantations and woodland coverage, Tanzania has huge potential to use forest wastes to generate power and heat. Private companies have been the main promoters of this technology. It is estimated that more than 3.5 MW have been installed in Iringa region. In addition, five sugar estates have been utilizing bagasse for heat and power generation for their own use but with possibilities to supply excess electricity to the grid. Estimated energy generation potential from excess bagasse from the five sugar factories is about 99.42 GWh per year. However, the total available capacity of existing cogeneration plants using bagasse is only 32.3 MW.
On the other hand, many of these companies have immediate plans to increase their power production capacity. Some have reached a point of negotiating sell agreements with TANESCO (public power utility). Other initiatives to produce power from biomass include use of sisal wastes in a biogas plant (installed capacity is 4MW) and land fill gas (2.5MW).
Small hydro potential and development
About 85 sites with potential of generating 87 MW have been identified. The estimated total technical potential is 234 MW. Currently, the total installed capacity is more than 4.7 MW. In May 2008, only 0.72MW reported to be connected to the grid. Many of these plants have been developed and operated by private institutions such as companies and the church missions. Other major players in promoting and developing small hydro projects in Tanzania are Ministry of Energy and Minerals, TANESCO, Rural Energy Agency and UNIDO.
Wind energy potential and development
Use of wind energy has been limited to pumping water for irrigation, domestic and livestock needs. There have been initiatives by government and donor community to install wind pumps for water pumping for irrigation and domestic purposes. In many cases wind pumps are not working, the main reasons include lack of maintenance, poor management and lack of technical data.
Tanzania has wind speed between 0.9 - 4.8m/s. The average wind speed is technically possible to generate electricity. There are about 7 wind sites potential for electricity generation. There are number of on-going initiatives to promote wind technology for electricity generation in the country. These initiatives are at different stages of development. For example, two companies are planning to install wind turbines to generate between 50 – 200MW in Singida Region.
Solar energy potential and development
Tanzania is blessed with enough sunshine, approximately 8 hours per day; estimated at about 187 - 215 Wm-2. Its level of exploitation is insignificant and limited to telecommunication, lighting, water pumping, heating and to the lesser extent drying of agro-products. Recent estimates on the installed capacity of Solar PV systems in the country is about 1.7 MW, however market potential for solar PV countrywide is estimated to be 20.2MW. Tanzania is now experiencing significant growth of Solar PV market (100kW in 2005 to 350kW in 2008). This trend has been contributed by different factors including long-term funded solar PV projects, increased awareness on the use of Solar PV especially in the rural areas and other public and private facilities such as schools and dispensaries, active participation of private companies in Solar PV business, etc.
Tanzania has potential geothermal sites which can generate about 650 MW. However this potential is still under investigation and is therefore a long-term energy option for Tanzanians.
Energy efficiency is an important aspect in cost and environmental savings. Potential sectors for energy efficiency initiatives in Tanzania include electricity, transport, processing industry, mining, agriculture, tourism and household. Energy efficiency initiatives are hindered by limited capacity in strategic planning at Ministry levels, lack of awareness, lack of financial resources for investing in efficient equipments, shortage of technical capacity to disseminate the skills and adaptation of the technologies, etc.
Sectors potential for renewable energy investment support.
Key sectors assessed and potential actors identified include:
Potential stakeholders in promoting renewable energy
Key stakeholders are Government institutions such as Ministries for energy, agriculture, environment, etc; and private institutions such as NGOs and energy/marketing related companies.
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