Ethiopian Energy^Power Business Portal

Ethiopian Electric Utility announced a revised electricity tariff enforceable since December 2018 scraping the old one. “The electricity revision was made based on the outcome of a study that hints the need to rehabilitate the electricity infrastructure, boost rural electric access coverage and improve service delivery supported by technology and taking in to account the current electricity price hike on regional and global levels as the utility could not be able to meet the societies’ energy demand with the current tariff it charges to consumers’’, reads the utility’s statement.

The utility made the tariff change at an increasing rate to all categories except for the lower energy consumers (<=50kwh) who are allowed to continue paying with the old tariff scale. As per the utility,” the consumers are expected to cover 25 percent of the cost of energy production (equivalent to the cost of energy production 12 years ago), the government covering 75 percent of the cost of the current energy production”. From the tariff scheme announced, however, one could note that the tariff is set at an increasing rate (non-flat) depending on the energy consumption levels. It is clearly visible that higher energy consumers are charged higher rates (against the fair tariff setting principles) that seems to cross subsidize the lower energy consumers.

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s2smodern

(A high Level PPP Development Assessment Outcome)

Public private partnerships have become new normal in today’s business landscape across many countries. If properly managed, governments could benefit in mobilizing financial resources, technical knowhow, innovation and efficiency gains from the private sector in the delivery of public goods and services by effectively partnering with them.

Since 2017, Ethiopia has publicly announced that it would leverage PPPs as one of its strategic tools in its development agenda. The accompanying thesis make an assessment of the theoretical and historical developments of PPPs in general and its stage of development and application in the Ethiopian context. 

In the assessment, it is learned that the government of Ethiopia has committed resources by formulating a PPP policy, enacting a separate PPP law (Proclamation no 1076/2018) and outlining the institutional roles and responsibilities albeit an early development stages demanding further clarity and maturity.

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s2smodern

The Waste to energy conversion facility has 25 MW capacity and will produce 185 Giga Watts Hour (GWh) of electricity per year, crushing 1,400 tons of solid waste on a daily basis (thereporterethiopia, 2018). The facility's successful inauguration has multiple implications and benefits to the country.

The straight forward benefit of the power plant is the additional capacity built at the heart of the main load center pushing the renewable energy resources portfolio reserve of the country in multiple directions. 

The second benefit is that Ethiopia largely depends on hydro power to drive the burgeoning economy and its energy security is often times perceived as at stake in times of drier weather.  Slowly but surely, the energy supply mix or diversity is shifting, Repi being the latest addition to Ethiopian Electric Power's, EEP's,  power capacity to safeguard the economy in such unfavorable circumstances. 

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s2smodern
According to sources, Ethiopia is considering to make changes to the existing electricity tariff. Of course, it was on the table awaiting decision quite for a while even if it has not been passed to date. Why now?
 
The logic is quite simple, to attract investment in the power and energy sector and spur growth in the economy. The nation is at a cross road in providing reliable power supply not just to the emerging industries, small, medium and large scale alike, but also to the general public, the tariff being cost reflective  to the producer and affordable to the consumer.
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