ETHIOPIA RENEWABLE ENERGY MARKET

Ethiopia Renewable Energy Market is expected to grow at robust growth rate due to supportive government initiatives and policies along with the growing demand for electricity across the country.

Major Ethiopia Renewable Energy Market Drivers and Emerging Trends

Ethiopia experienced a period of robust GDP growth until 2019 which results in rise in electricity demand and it is projected to rise by about 30% annually. Despite having significant energy resources, the country faces energy shortages while attempting to meet the needs of a population exceeding 110 million. The country’s overall power production capacity stands at around 4,500 MW as the state-run Ethiopia Electric Power or EEP manages maintenance operations for over 14 hydropower and 3 wind power installations located across various regions. The government has also prioritized building and expanding power generation projects to ensure consistent electricity supply, aiming to expand the capacity to 17,000 MW in the coming decade, yet concern remains that demand might exceed supply amid ongoing economic and population growth.

The Ministry of Finance has launched six solar initiatives for prospective bidders in which a Saudi company ACWA Power has secured agreements with EEP to construct 125 MW from each of two solar power projects. The project’s implementation agreement is still pending, with the government planning to tackle rural community power challenges through off-grid solar electricity solutions.

The government has been progressively harnessing its renewable energy in Ethiopia with the market segment including solar, wind, hydroelectric, and geothermal capabilities. The country has the capacity to produce over 60 thousand MW of electricity from hydroelectric, geothermal, solar, and wind sources as it also holds seven trillion cubic feet of confirmed natural gas reserves in the Ogaden Basin. Despite having significant energy potential, it has struggled to capitalize on its natural resources due to insufficient investment.

Ethiopia generates about 90% of its electricity from hydropower as thermal and wind sources contributing 2 and 8 percent of the total generation respectively. Besides hydropower, the country is advancing its geothermal and wind capabilities as the government aims to establish a power grid that is resilient to climate impacts. Ethiopia entered into an agreement with AMEA Power from the UAE to develop a six hundred million USD wind farm with a capacity of three hundred megawatt. The country’s potential is also seen as promising which contributes to aspirations for Africa to surpass Europe in geothermal capacity by the close of the decade. Kenya and Ethiopia are also expected to receive an estimated USD 35 billion investment for developing their geothermal potential in the East African Rift. 

Nevertheless, hurdles facing the government’s efforts to expand renewable energy market in Ethiopia including lack of planning as well as insufficient institutional and human expertise. In addition, the electricity sector’s incomplete improvements and a limited local private sector pose additional barriers. The government has also faced criticism in recent years for building The Grand Ethiopian Renaissance Dam or GERD which potentially impacts water sources of neighboring countries.

Segments covered in the Report:

The Ethiopia Renewable Energy Market has been segmented on the basis of type, end-user, and region. Based on the type, the market is segmented into wind power, solar energy, hydroelectric power, bioenergy, and geothermal energy. Based on the end-user, the market is segmented into the commercial, residential, industrial, and others.

Market Segmentation

Ethiopia Renewable Energy Market by Type

• • Wind Power
  • Solar Energy
  • Hydroelectric Power
  • Bioenergy
  • Geothermal Energy

Ethiopia Renewable Energy Market by End-User

• • Commercial
  • Residential
  • Industrial
  • Others