Responding to Power Sector Problems: The Cogeneration Option

Reliance on Hydro in East Africa

Years of Significant Drought (D) Country BurundiDD DjiboutiDD EritreaDDDDDD Ethiopia DDDDD D Kenya DDDDD D Rwanda DD SudanDDDDD Tanzania DDDD D Uganda DDDDD

Hydro Electric Power Generation in Kenya Hydroelectric Power Generation (Billion Kilowatt hours) Source: IEA, 2008 Drought

Hydro Electric Power Generation in Tanzania Hydroelectric Power Generation (Billion Kilowatt hours) Source: IEA, 2008 Drought

Oil prices Nov 07 – Nov 08 Period of high oil prices coincided with drought in the region Drought affected hydro-power generation Response option from Governments: –Use expensive emergency thermal generation to meet rising demand

Status of Emergency Power Supply Country DateContract Duration Emerge ncy Capacity Percenta ge total installed capacity Estimate d annual cost as % GDP Drought Related? Rwanda years Yes Uganda years Yes Tanzania years Yes Kenya year Yes Source: Eberhard and others ( 2008 ) $$

Impact of Inadequate Power Supply Un-reliable supply of electricity (Fluctuating voltage damages electrical appliances) Increase in cost of electricity production –Emergency power generators charge up to 25 UScents – over 100% increase in tariffs –Increase in production costs and cost of products to end users –Long term impact of increased cost of production to power outages could be loss of jobs, especially for low income earners $

Response Options Impossible to predict drought and volatility of the world petroleum prices, diversifying electricity generation sources is the best response option Need to look at other energy options to reduce impact of drought related power deficits Cogeneration – one of the key response options

Cogeneration Potential in East and Horn of Africa Countries Cogen potential as % of total Installed national power generation Capacity from all sources Ethiopia 4.3% Kenya 13.9% Malawi 23.7% Sudan 20.8% Swaziland 144.5% Tanzania 11.1% Uganda 15.2%

Recommendations for fast tracking cogeneration – Mauritius model Standard Power Purchase Agreements (PPAs) could contribute to the success of renewable based power generation in the region Allowing agro-based industries that benefit a large proportion of the population to participate in exploiting local energy resources Explicit renewables targets which should be realistic, home-grown and local Predetermined feed-in tariffs for renewable based electricity generation

Feed-in Tariff: Kenya Feed in tariff policy for Kenya published Open to first 400MW after which likely to be reviewed Source Power plant capacity (MW) Firm power Tariff (US cts/kWh) Non firm power tariff (US cts/kWh) Small hydro < Wind< Biomass<

Feed-in Tariff: Tanzania Tariff recently announced by regulator - EWURA CategoryPeriodTariff (US cents) Standardised average small power purchase NA12 Seasonal adjustedAug - Nov10 Jan – Jul & Dec14

Feed-in Tariff: Uganda Tariff mentioned in the energy policy document Time of useYear 1-6Year 7-20 Peak ( hrs) (US$/KWh) Shoulder ( hrs) (US$/KWh) Off-Peak ( hrs) (US$/KWh) Average Tariffs