Access to affordable energy supply is a real booster in today’s competitive business landscape so to say in the developing world where businesses scramble to better position themselves against the competitors somewhere else. The cost of electricity is one of the major factors in investment decisions in the manufacturing sector.
Then, comes the question of reliability of the electricity supply. Utilities, particularly those in the developing world, are constantly challenged in balancing affordability and/against reliability. In their ongoing struggle to address both cases, power theft constantly stands on their way.
With an electricity access deficit of close to 60 million people, Ethiopia seems determined in its effort of electrifying the whole nation by 2025. The National Electrification Program is in its third year implementation deploying all available access pathways.
The government plans to reach 65% and 35% of the population through on grid and off grid access pathways respectively leveraging a combination of both public and private sector business models. Despite the good intention of engaging the private sector, it has been systematically impossible for the private sector to invest in the energy sector. Following the enactment of the public private partnership proclamation in 2018, there has been a good deal of interest from the private sector to invest in the utility scale solar and geothermal energy areas. In addition to limited finance, private sector investment has been effectively constrained due to the regulatory environment in the off-grid sector, however.
Although private sector players are active in East Africa region powering communities, facilities and households, Ethiopians were allowed to wait for far too long. After many years of spending public money in the energy sector, the government realized that electrifying Ethiopia only through public money is far from achievable. Yet, the whole intention of allowing the private sector to invest in the small-scale off-grid energy access is still dragging its foot.
The 2020 edition of Tracking SDG 7: The Energy Progress Report that monitors and assesses attainments in the global quest for universal access to affordable, reliable, sustainable, and modern energy by 2030 is out. The reports says, “Although the world continues to advance toward SDG 7, its efforts fall well short of the scale required to reach the goal by 2030 with a disturbing figure of 789 million people still without access to electricity and 3 billion people without access to clean cooking fuels(2018)”.
Source: SDG7 2020 Tracking Report
A helicopter view of the report clearly shows that Ethiopia is one of the 20 countries with the largest access deficit, the share of the population having access to electricity still at 45%, and only less than 5% of the population having access to clean fuels, as of 2018.
Left with a decade to meet SDG 7 goals, the current pace of electrification through to the last mile is far from sufficient. The world has to do better.
Among the SDG 7 targets, achieving universal access to affordable, reliable, sustainable, and modern energy services (Target 7.1) is the one that has the most profound implication for Ethiopia having only 45% and less than 5% access to electricity and cooking services respectively.
SDG 7: Target 7.2 calls for substantial increase of the share of renewable energy in the energy mix. The most predictable positive development in Ethiopian Energy system is the fact that almost all grid supply (except backups) comes from renewable sources. Many key projects from multiple sources are under development to minimize the current hydro dependency. There are also interests and signals to shift the transportation and industrial use to electric sources albeit at early stages.
SDG 7: Target 7.3 calls for energy efficiency improvement. For Ethiopia, although the energy intensity (units of energy per unit of GDP) slightly declines over the years reaching 9.7(MJ/USD 2011 PPP) in 2017, it still needs a significant improvement even to hit the global average of 5.0 the same year. In my view, the historically low electricity tariff in the country has played a significant role for the inaction or lower efficiency performance.
The report provides policy recommendations based on best practices as identified by national authorities and the international community as insights to emulate.
In reference to the best practice insights provided, based on the publicly available rate of access and informed by the country practice, this article will shade some light on the Ethiopia case as a matter of bringing the topic to the larger public attention. Hoping it would drive further discussion and action. Given the significance, this review will focus only on target 7.1. You are advised to read the full report for a complete picture of the progress of all the energy targets.
Before you continue reading this article, you are, again, advised to quickly go through part I of this series to understand the overall background.