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Beltu Site: EEU Micro-Grid Pilot Project

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The full-scale impact of the conflict in Tigray is yet to be uncovered. However, it gets concerning for every sensible individual as time goes by. My only hope is that we all reach out to those at risk of starvation and health related emergencies to control and minimize the humanitarian damage.

Among others, this conflict clearly exposes the often lightly-discussed topic: Energy Security not just in Tigray but throughout the country more so in the urban centers. Leaving who takes responsibility to history, I cannot imagine staying in the dark for a quarter of a year after being fully dependent on grid power for almost every livelihood activity. During this testing time in Tigray, in most instances, no power directly translates to no water, no cooking, no grinding mills, no communication, no medication, no public services and many other basic needs. Worse, probably no kerosene or diesel fuel alternatives either due to the transport access limitation. Apparently, no basic light in towns even the dirty one throughout until the utility restored the grid supply. As I write this note, Humera and Welkait areas remain in the dark, and the utility just announced restoring the grid supply to Axum, Shire and the neighboring towns well behind Mekele areas.

As someone who has been working in the transmission, distribution and substation infrastructures, I am equally concerned to the safety and hardship the utility personnels and men in uniform have to go through to bring the badly needed power supply in such a dramatic speed.  

After being resistive for energy security calls, Ethiopia realized the vulnerability of its hydro dependent grid when faced with climate induced droughts (happening every now and then), and there has been a relative policy changes to diversify the energy mix through complementary investments of geothermal, wind and solar resources. Yet, the current situation in Tigray is another indicator that the energy security is still at stake and it is in the country's best interest to reform the energy sector further; Putting decentralized/distributed energy solutions at the core. 

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They say 'Necessity' is the mother of 'Invention' and 'Opportunity' is its father.
 
As in any society, Ethiopia needed cash but its business environment has never been sufficiently oriented that way. The digital apps, plugins or features we browse on a daily basis whether for business or fun are mostly developed by academic researchers or entrepreneurs sponsored and commercialized by market players anywhere else. Why not in Ethiopia? 
 
At the very best, Ethiopian graduates come up with new ideas, concepts and demonstrations every year to serve their academic purposes yet we often do not hear continuation or upscaling of their work to solve societal problems and benefit themselves in financial terms. In my experience, the main reason, if I have to blame, is the lack of commercial orientation of the market in the country. Societal problems are mostly the same across the globe and a software built to solve an Ethiopian problem, for example, can also help solve a problem anywhere else financially benefiting the developer and the country at large but we don't see it often in our markets. Rather, the hardly gained few are heading to serve other markets.
 
 
 
Studies suggested that Ethiopian market is short of innovation (even on regional peers' basis) compared to the huge size of the population and the younger demographic which should have been savvy to technology and new developments. A closer look at of the tiktok videos showcases the biggest divide of creativity between Ethiopia and others. Yes, I agree that there are few outstanding talents who stand out in the platform but most struggle with commonsense. The reason: Lack of commercial incentives for talented people to look in to tiktok as is the case in other digital platforms. 

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The Energizing Finance series is an in-depth primary research and analysis by Sustainable Energy for All (SEforALL) and partners that examines supply and demand for finance across two key areas of energy access: Electricity and Clean Cooking.

This year's publication: Energizing Finance: Missing the Mark 2020 is just released and the report found out that financial disbursement to energy access continues to significantly lag behind commitments. 

As matter of bringing the topic to the public's attention, I put a birds eye view of key highlights below for Ethiopia, one of the High Impact Countries, HICs, in the report:

  • Countries like Congo (DR) and Ethiopia, where 95 percent of the population lacks access to clean cooking, attracted less than 1 percent of the annual investment they needed.
  • Electricity – Required investment and tracked electricity access investment (USD million, per annum)                                   

                       1956 required investment Vs 137 tracked investment

  • Clean cooking - Required investment and tracked investments (USD million, per annum)

                     191 required investment Vs 0.9 tracked investment

  • The distribution of finance committed for clean cooking access across HICs in 2018 is disconcerting, with 92 percent of public finance in 2018 concentrated in Bangladesh and Kenya alone. 

                     Ethiopia attracted only USD 0.9 million in 2018 in contrast to the USD 191 million it needs                         annually to provide its entire population with access to clean cooking solutions

  • Estimated carbon finance flows for clean cooking projects in the mandatory and voluntary markets (VER), by destination country (USD million)

                    Ethiopia registered only 0.1 while Ghana achieved a USD 4.7 annually,

 

My Take Away

While the access deficit is huge, the financing for energy access both for electricity and clean cooking is meager. Further reform of the energy sector, enhanced financial commitment and faster execution of programs and projects is critical to realize the stated goals of reaching every Ethiopian household by 2025.  

A tailored policy support in tandem with the burgeoning digital transformation strategy, new business models can help address the energy access needs of millions of households in the country while creating the needed jobs to the growing youth population. Ethiopia has become one of the few last frontiers in access to energy challenge, and there are whole lot of opportunities and solutions tested anywhere else that can be applied in Ethiopia. It just needs open mind and convenient business environment.

 

Related:

Chronic underinvestment in clean energy putting millions at risk as they continue to be left behind in energy transition

Tracking SDG 7 Report: The Energy Progress Report 2020 is Out--- Where Ethiopia Stands?

Tracking SDG 7 Report: The Energy Progress Report 2020- Ethiopia Policy Case Review+ Opinion Piece  

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Ethiopian Electric Utility Spends ETB 18,087,241.50 annually for Diesel to Power Communities in Somali regional state alone

 

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. 

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