Ethiopia Energy Situation

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1.1 Energy situation

Ethiopia is one of the least developed countries with a population of about 72 million, growing at a rate of 3% per annum. Biomass fuels constitute more than 90% of Ethiopia's final energy consumption (99% of households, 70% of industries and 94% of service enterprises use biomass as energy source). Households account for 88% of total energy consumption, industry 4%, transport 3% and services and others 5%. Petroleum covers 5% of total energy supply. The country is completely reliant on imports to meet its petroleum requirements. The installed electricity generating capacity in Ethiopia is about 2.100 MW (xx% hydro, x% diesel and x% thermal) and production covers only 1% of national energy demand. Only 11% of the population have access to electric power. The overloading of the network frequently disrupts the power supply of large commercial and industrial customers. There is a need for substantial investments in the power system. Ethiopia is well endowed with renewable energy resources (solar, wind, hydro and geothermal). To date, however, there is a complete lack of economic viability of renewable energy applications. The policy framework for household energy is set by the Ethiopian Energy Policy, the Environmental Policy of Ethiopia and the Conservation Strategy of Ethiopia, which address energy conservation and energy efficiency in order to reduce the consumption of fuelwood.

Biomass is the single most resource meeting the energy needs of the Ethiopian households. It is used mainly for cooking applications on traditional three-stone open fires. The staple food in Ethiopia’s Highlands is Injera. About 50% of the country’s primary energy consumption is used for Injera preparation mostly on traditional open fire stoves, wasting more than 90% of the fuel in an unsafe and unhealthy manner. Household users are exposed to high levels of smoke emissions in poorly ventilated kitchens and other health risks emanating from fire burns and poor kitchen hygiene. Due to their continuous use forest resources have declined to a surface coverage of 0,2% for natural forests and 6% for woodlands.

One of the SUN Program components is Energy, which is actually working in two Regions, Oromiya and Amhara. Before, from February 2004 to June 2006 a similar component was run in Tigray with the support of the SHELL Foundation. The current activities in Amhara and Oromiya are funded by a Co-financement by DGIS with a total value of 2,5 Mio Euros from October 2005 to December 2008. The energy component of the GTZ SUN Energy is jointly implemented by GTZ and the Ethiopian Federal Ministry of Agriculture and Rural Development under a bilateral cooperation agreement.

The approach of SUN Energy is mainly focused on urban and periurban environment, because availability of material sand and cement, given purchasing power and lower transportation costs.

Up to now a certain penetration of rural areas was achieved with the support of home agents, development agents or other stakeholders. Continuing this approach, the impact of the fuel saving stoves in rural areas will be limited. But 85 to 90% of the population of Ethiopia is living in rural areas. The felt free of cost availability of biomass as fuel in rural areas is hampering also one of the best sales arguments for stoves. If fuel wood is bought on the market, the stove is paying back itself within 3 to 4 months.

Access to biomass fuels is increasingly difficult. In rural areas, women and children spend 5 to 6 hours a day collecting fuel wood fuel wood. This time could otherwise be used for education or income-generating activities. In urban areas where biofuels are purchased, the money spent on fuels - about 20% of household expenditure - could otherwise be used for education, health etc. In addition, current patterns of biofuel consumption lead to high levels of indoor air polution and hence to a high prevalence of respiratory diseases. Moreover, the growing demand for fuelwood resulting from the importance of biomass for energy supply and high population growth has serious impacts on natural resources. Even now the estimated demand for fuelwood is five to six times the sustainable supply. Most Ethiopian forests are already highly degraded and the country's forest cover has been diminished by 200,000 ha annually.