They say 'Necessity' is the mother of 'Invention' and 'Opportunity' is its father.
(Vivien Foster, 2019), Rethinking Power Sector Reform in the Developing World report suggests that future power sector reforms should be shaped by context, driven by outcomes, and informed by alternatives with a clear departure from the normative 1990s power sector reform prescription which comprised a package of four structural reforms: Regulation (through the creation of an autonomous regulatory entity); Restructuring (entailing corporatization and full vertical and horizontal unbundling of the utility); Private sector participation (particularly in generation and distribution); Competition (ultimately in the form of a wholesale power market).
(AfDB, 2019), Revisiting Reforms in the Power Sector in Africa, asserts that the power sector in Africa still largely retains the traditional integrated monopoly utility structure, although many have included IPPs, despite the standard model Prescription of the reform targeting all segments of the power sector value-chain in Africa, and in very different ways pointing that the standard model reforms generally did not prioritize social and political goals of expanding access to electricity and clean energy sources, nor improving equity or affordability conditions.
Ethiopia being among the laggards in terms of implementing the standard policy prescription, it has taken the first few steps including setting up an independent regulator and vertically unbundling the state monopoly in to two separate utilities since the beginning of 2013. The reform process continues to unfold albeit a slow and cautious pace.
Driven by the ongoing economic and the energy sector reforms, the Ethiopian energy and power sectors have become attractive to private sector investment. Generation side independent power producers including geothermal and utility scale solar projects are being introduced, currently just passing the stage of a financial close, with lots of expectation to follow by other forms of generation technologies such as in hydro and wind. There are also a few PPP based examples in the transmission side albeit at an early stage.
Historically, the energy and power sector infrastructure development in Ethiopia has been dominated by public sector investment where the responsibility of communities and key stakeholders rested on the shoulders of the government. The private sector has been engaged mainly in consulting and contracting scope of works with minimum direct responsibility of engaging the wider community.
At the same time, until very recently, the communities buy in to the government’s aspiration of building infrastructure for a larger public good as opposed to the individual and communal loses they incur whether loss of their land, environmental safety concerns, disruption of their social constructs and etc. and despite incomparably lower (as compared to current market prices) compensations in place, the broken promises and the slow bureaucratic procedures they often faced. It is no more the same.
Lately, most of the enquiries I received through Ethiopian Energy^Power Business Portal, eepBp, are questions related to electricity tariff. I often hear similar concerns every time I visit the electricity sales centers of Ethiopian Electric Utility, EEU, to recharge my own prepaid cards. In fact, the questions, concerns and complains I witnessed are all in line with my prediction that consumers are likely to go energy sensitive as the phased tariff adjustment put in place.
Prior to the adjustment, electricity tariff has been so low that we (consumers) often don’t feel the pressure of altering our own behavior except the fact that we all point our fingers towards the utility for failing to keep the power lines stable. Paying cost reflective tariff and expecting quality and reliable services are in fact mutually inclusive undertakings which we dare to ignore so far. The cheap electricity tariff (we enjoyed) has been the real barrier for the lack of additional investment (particularly the private sector) in the power sector and consumers’ expectation of receiving reliable, accessible and adequate power supply will likely be never unless the tariff is made cost reflective. Of course, affordability is also part of the key equation as it affects investment and all productive interventions. There comes a whole tariff design mechanism which will not be the interest of this article.
It is true that the utility has made tariff adjustments since 2018 that effectively and progressively raises your electricity bills for a consecutive of four years unless you take action to improve your electricity consumption behavior. While there is little you can anticipate complaining to the utility, there is a lot you can do yourself and seek professional advice if you care to keep your electricity bills down. Changing your Behavior towards energy.