GDPE0677ICR | JULY 2013 · Continued Growth in Annual Power Consumption and Generation ... East African Power Pool (EAPP), African Development Bank Group (AfDB), African, Caribbean,

Ethiopia Power Market Outlook to 2030 –Market Trends, Regulations and Competitive Landscape © GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.

REFERENCE CODE GDPE0677ICR | PUBLICATION DATE JULY 2013

ETHIOPIA POWER MARKET OUTLOOK TO 2030 - MARKET TRENDS, REGULATIONS AND

COMPETITIVE LANDSCAPE

Ethiopia Power Market Outlook to 2030 –Market Trends, Regulations and Competitive Landscape 2 © GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.

ETHIOPIA POWER MARKET OUTLOOK TO 2030 –MARKET TRENDS, REGULATIONS AND


Executive Summary

Hydropower Dominates Installed Capacity in Ethiopia

Hydropower is the dominant source of electricity in

Ethiopia, accounting for XX% of the total installed

capacity in 2012, down from XX% in 2011. This

decline was the result of renewable power

installations in the country. The share accounted

for by thermal power in 2012 amounted to XX%,

followed by renewable sources with XX%. The

government has been focusing on increasing both

hydropower and renewable installed capacity with

a view to meeting increasing domestic demand for

power, as well as increasing exports to neighboring

countries, which will help to pay for the cost of

construction for these power plants.

Power Market, Ethiopia, Breakdown of Installed Capacity by Type of Power Plant (%), 2012

Large hydro

Oil (thermal)

Wind (onshore) Geothermal

Source: GlobalData, Power eTrack, Capacity and Generation Database [Accessed on: June 18, 2013]

Continued Growth in Annual Power Consumption and Generation

Annual power consumption in Ethiopia increased

between 2000 and 2012 at a Compound Annual

Growth Rate (CAGR) of XX% from XX Gigawatt

hours (GWh) to an estimated XX GWh in 2012.

Annual consumption in the country grew due to

increased household and industrial consumption.

Annual power generation also increased during

this period, at a CAGR of XX%, from XX GWh in

2000 to XX GWh in 2012.

Power Market, Ethiopia, Annual Power Consumption and Generation (GWh), 2000–2012

2000 2006 2012

Tota

l gen

erat

ion

(GW

h) a

nd c

onsu

mpt

ion

(GW

h)

Annual consumption (GWh) Annual generation (GWh) Source: GlobalData, Power eTrack, Capacity and Generation Database [Accessed on: June 18, 2013]




Table of Contents

1 Table of Contents

1 Table of Contents ...................................................................................................................... 4

1.1 List of Tables ........................................................................................................................ 7

1.2 List of Figures ....................................................................................................................... 8

2 Introduction ............................................................................................................................... 9

2.1 GlobalData Report Guidance .............................................................................................. 11

3 Ethiopia, Power Market, Snapshot .......................................................................................... 12

3.1 Ethiopia, Power Market, Macroeconomic Factors ............................................................... 12

3.2 Ethiopia, Power Market, Supply Security............................................................................. 15

3.3 Ethiopia, Power Market, Generation Infrastructure .............................................................. 16

3.4 Ethiopia, Power Market, Transmission Infrastructure .......................................................... 16

3.5 Ethiopia, Power Market, Opportunities ................................................................................ 16

3.6 Ethiopia, Power Market, Challenges ................................................................................... 17

4 Ethiopia, Power Market, Market Analysis ................................................................................ 18

4.1 Ethiopia, Power Market, Supply Structure ........................................................................... 18

4.2 Ethiopia, Power Market, Key Players .................................................................................. 18

4.3 Ethiopia, Power Market, Demand Structure ........................................................................ 18

4.3.1 Breakdown of Power Consumption by Sector, 2012 ....................................................... 21

5 Ethiopia, Power Market, Regulatory Overview ......................................................................... 22

5.1 Power Sector Reforms ........................................................................................................ 22

5.2 Growth and Transformation Plan......................................................................................... 23

5.3 Ethiopia, Power Market, Foreign Investment Scenario ........................................................ 24

5.4 Policies for Foreign Investment in the Power Market ........................................................... 25

6 Ethiopia, Power Market, Capacity and Generation Overview, 2000–2030 ............................... 26

6.1 Ethiopia, Cumulative Installed Capacity, Breakdown by Type of Power Plant ..................... 26

6.2 Ethiopia, Power Market, Cumulative Installed Capacity and Annual Power Generation, 2000–2030 .......................................................................................................................... 27




Table of Contents

6.2.1 Cumulative Installed Thermal Capacity and Annual Thermal Power Generation, 2000–2030 ............................................................................................................................... 30

6.2.2 Cumulative Installed Hydro Capacity and Annual Hydropower Generation, 2000–2030.. 33

6.2.3 Cumulative Installed Renewable Capacity and Annual Renewable Power Generation, 2000–2030...................................................................................................................... 37

7 Ethiopia, Power Market, Transmission and Distribution Overview ........................................... 41

7.1 Ethiopia, Power Market, Transmission Network Overview................................................... 41

7.2 Ethiopia, Power Market, Distribution Network Overview ...................................................... 43

7.2.1 New Domestic Transmission and Distribution Projects ................................................... 44

7.3 Ethiopia, Power Market, Grid Interconnection ..................................................................... 45

7.3.1 Electricity Import and Export Trends ............................................................................... 46

7.4 Ethiopia, Power Market, Electricity Trading ......................................................................... 46

8 Ethiopia, Power Market, Competitive Landscape: Snapshot of Top Power Generating Company ................................................................................................................................. 47

8.1 Key Company in the Ethiopia Power Market – Ethiopian Electric Power Corporation .......... 47

8.1.1 Ethiopian Electric Power Corporation, Company Overview ............................................. 47

8.1.2 Ethiopian Electric Power Corporation, Business Description ........................................... 47

8.1.3 Ethiopian Electric Power Corporation, SWOT Overview ................................................. 48

9 Appendix ................................................................................................................................. 52

9.1 Market Definitions ............................................................................................................... 52

9.1.1 Power ............................................................................................................................. 52

9.1.2 Installed Capacity ........................................................................................................... 52

9.1.3 Active Installed Capacity ................................................................................................. 52

9.1.4 Electricity Generation ...................................................................................................... 52

9.1.5 Electricity Consumption .................................................................................................. 52

9.1.6 Thermal Power Plant ...................................................................................................... 52

9.1.7 Hydropower Plant ........................................................................................................... 52

9.1.8 Nuclear Power ................................................................................................................ 53




Table of Contents

9.1.9 Renewable Energy Resources........................................................................................ 53

9.2 Abbreviations ...................................................................................................................... 53

9.3 Bibliography ........................................................................................................................ 55

9.4 Coverage ............................................................................................................................ 56

9.5 GlobalData’s Methodology .................................................................................................. 56

9.6 Primary Research and Analysis .......................................................................................... 56

9.7 Secondary research and analysis ....................................................................................... 57

9.8 Contact Us .......................................................................................................................... 58

9.9 Disclaimer ........................................................................................................................... 58




Table of Contents

1.1 List of Tables

Table 1: Power Market, Ethiopia, GDP ($bn), Population (millions), and Annual Electricity Consumption (GWh), 2000–2018...................................................................................................................... 14

Table 2: Power Market, Ethiopia, Annual Electricity Consumption (GWh), 2000–2030 ............................... 20

Table 3: Power Market, Ethiopia, Breakdown of Power Consumption by Sector (%), 2012 ........................ 21

Table 4: Power Market, Ethiopia, GTP, Growth Rate of Real GDP (%), 2011 ............................................ 23

Table 5: National Economy, Ethiopia, Annual Foreign Direct Investment ($m), 2005–2011........................ 24

Table 6: Power Market, Ethiopia, Breakdown of Installed Capacity by Type of Power Plant (%), 2012 ....... 26

Table 7: Power Market, Ethiopia, Cumulative Installed Capacity (MW) and Annual Power Generation (GWh), 2000–2030...................................................................................................................... 29

Table 8: Power Market, Ethiopia, Cumulative Installed thermal Capacity (MW) and Annual Thermal Power Generation (GWh), 2000–2030......................................................................................... 32

Table 9: Power Market, Ethiopia, Leading Active Hydropower Plants (MW), 2012 ..................................... 34

Table 10: Power Market, Ethiopia, Cumulative Installed Hydro Capacity (MW) and Annual Hydropower Generation (GWh), 2000–2030 ................................................................................................... 36

Table 11: Power Market, Ethiopia, Leading Upcoming Wind Farms (MW), 2013–2030 ................................ 37

Table 12: Power Market, Ethiopia, Leading Upcoming Geothermal Power Plants (MW), 2013–2020 ........... 38

Table 13: Power Market, Ethiopia, Cumulative Installed Renewable Capacity (MW) and Annual Renewable Power Generation (GWh), 2000–2030 ...................................................................... 40

Table 14: Power Market, Ethiopia, Transmission Network Distance by Voltage Level (Ckm), 2000–2020 ... 42

Table 15: Power Market, Ethiopia, Distribution Network Distance (Ckm), 2000–2020 .................................. 43

Table 16: Power Market, Ethiopia, Planned Transmission Projects by Voltage Level (kV) and Distance (km), 2012 .................................................................................................................................. 45

Table 17: Power Market, Ethiopia, Ethiopian Electric Power Corporation, SWOT Analysis .......................... 48

Table 18: Abbreviations .............................................................................................................................. 53




Table of Contents

1.2 List of Figures

Figure 1: Power Market, Ethiopia, GDP ($bn), Population (millions), and Annual Electricity Consumption (GWh), 2000–2018 13

Figure 2: Power Market, Ethiopia, Annual Electricity Consumption (GWh), 2000–2030 19

Figure 3: Power Market, Ethiopia, Breakdown of Power Consumption by Sector (%), 2012 21

Figure 4: Power Market, Ethiopia, Breakdown of Installed Capacity by Type of Power Plant (%), 2012 26

Figure 5: Power Market, Ethiopia, Cumulative Installed Capacity (MW) and Annual Power Generation (GWh), 2000–2030 28

Figure 6: Power Market, Ethiopia, Cumulative Installed thermal Capacity (MW) and Annual Thermal Power Generation (GWh), 2000–2030 31

Figure 7: Power Market, Ethiopia, Cumulative Installed Hydro Capacity (MW) and Annual Hydropower Generation (GWh), 2000–2030 35

Figure 8: Power Market, Ethiopia, Cumulative Installed Renewable Capacity (MW) and Annual Renewable Power Generation (GWh), 2000–2030 39




Introduction

2 Introduction

Ethiopia has begun to liberalize its economy and has removed a number of restrictive or

discriminatory regulations related to tax, credit, foreign trade and the private sector in general. As a

result of these changes, private and foreign companies are no longer required to pay unfavorable

taxes or apply for additional licenses, and they do not face discriminatory import or export policies,

or inequitable tariff or non-tariff barriers. However, despite these changes, the Ethiopian

government remains heavily involved in the economy.

Ethiopia is a member of various international organizations, such as the East African Community

(EAC), East African Power Pool (EAPP), African Development Bank Group (AfDB), African,

Caribbean, and Pacific Group of States (ACP), African Union (AU), Common Market for Eastern

and Southern Africa (COMESA), Food and Agriculture Organization (FAO), Group of XX (G24),

Group of XX (G77), International Finance Corporation (IFC), International Fund for Agricultural

Development (IFAD), International Labor Organization (ILO), International Maritime Organization

(IMO), and the International Monetary Fund (IMF).

Ethiopia’s Gross Domestic Product (GDP) amounted to an estimated $XX billion in 2012, of which

agriculture accounted for almost XX. In 2011, the country’s GDP amounted to $XX billion, of which

agriculture accounted for XX%. Coffee is the most important agricultural product exported from the

country. However, Ethiopia suffers from a trade deficit, with exports amounting to at an estimated

$XX billion in 2012 and imports amounting to an estimated $XX billion. In 2011, exports and

imports amounted to $XX billion and $XX billion, respectively. In addition, inflation fell in June 2009

to around XX% and XX% in August 2010, but increased to XX% in December 2010, an estimated

XX% in 2011, and an estimated XX% in 2012 (IMF, 2013; CIA, 2013).

In addition to agricultural produce, Ethiopia also exports natural resources, such as gold, marble,

limestone, and small amounts of tantalum. In the past, Ethiopia has been characterized by

prolonged periods of drought and agricultural failures, which resulted in a large number of deaths

from starvation in the country’s population. The recent introduction of socio-economic measures by

the Ethiopian government, with help from foreign donors, and also the construction of large dams in

the country, has helped to strengthen agriculture in the country and reduce deaths. The country

has also succeeded in attracting foreign investment in the areas of textiles, leather, commercial

agriculture and manufacturing, which is creating an increased demand for power.




Introduction

Ethiopia also possesses abundant hydro resources and the majority of its power generation is

derived from hydropower. However, Ethiopia is totally dependent on imports for oil. As a landlocked

country, Ethiopia can access maritime trade through the port of Djibouti. The country also

possesses abundant wind and solar potential and has plans to utilize this potential in order to meet

domestic and international demand for power, which is increasing rapidly.

The Ethiopian power market is divided into the Inter-Connected System (ICS) and the Self-

Contained System (SCS). The ICS is the grid-connected section of the market, which is served

exclusively by the Ethiopian Electric Power Corporation (EEPCo), a state-owned utility company.

The SCS is an off-grid system and is primarily served by EEPCo, alongside other private

organizations such as charitable missionary trusts and local municipalities.




Introduction

2.1 GlobalData Report Guidance

The report begins with an executive summary that captures key growth trends in the Ethiopian

power market.

Chapter three provides a snapshot of the key parameters in the country that affect its power

sector as well as key points about the Ethiopian power market.

Chapter four provides a power market analysis for Ethiopia.

Chapter five provides details of the regulatory scenario of the power market and inward foreign

investment scenario in the country.

Chapter six provides information on the country’s cumulative installed capacity and annual

generation trends as a whole and also split according to individual sources of generation.

Chapter seven describes the power transmission and distribution infrastructure of the country

and includes information on interconnectors with neighboring countries. The section also

covers details on electricity import and export, and upcoming grid related projects in the

country.

Chapter eight describes the competitive landscape of the country’s power market, with a

complete description and Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis

for the leading companies

Note: all 2012 market numbers provided in the report are estimates except where actual data was

available.




Ethiopia, Power Market, Market Analysis

4.3.1 Breakdown of Power Consumption by Sector, 2012

The industrial sector is estimated to have been the largest power consuming sector in Ethiopia in

2012 with a share of XX%. Services are estimated to have accounted for XX% of total power

consumption in 2012, bringing the total share held by these two sectors to XX%. The household

sector accounted for an estimated XX% share of total electricity consumption in 2012 followed by

other smaller sectors with XX%.

Figure 3: Power Market, Ethiopia, Breakdown of Power Consumption by Sector (%), 2012

Industry

Services

Households

Others sectors

Source: GlobalData

Table 3: Power Market, Ethiopia, Breakdown of Power Consumption by Sector (%), 2012

Sector Percentage (%)

Industry

Services

Households

Others sectors

Source: GlobalData




Capacity and Generation Overview, 2000–2030

6.2 Ethiopia, Power Market, Cumulative Installed Capacity and Annual Power Generation, 2000–2030

Ethiopia’s cumulative installed capacity increased from XX MW in 2000 to XX MW in 2012 at a

CAGR of XX%. From 2013 to 2030, cumulative installed capacity is expected to increase from XX

MW to XX MW at a CAGR of XX%.

A major share of Ethiopia’s installed capacity is accounted for by hydropower resources. Ethiopia

has been focusing on the development of hydropower, with a view to meeting its own rapidly

increasing domestic demand, as well as increasing exports to neighboring nations. However, the

government is concerned about the excessive focus on hydropower and has therefore also been

concentrating on the development of renewable sources, specifically wind and geothermal.

Nevertheless, hydropower is expected to continue to be a major source of power in the country

from 2013 to 2030, increasing at a CAGR of XX%. Renewable power is expected to increase at a

CAGR of XX%.

Annual power generation in the country amounted to XX GWh in 2000, increasing to XX GWh in

2012 at a CAGR of XX%. Annual power generation is expected to increase from XX GWh in 2013

to XX GWh in 2030 at a CAGR of XX%.





Figure 5: Power Market, Ethiopia, Cumulative Installed Capacity (MW) and Annual Power Generation (GWh), 2000–2030

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Ann

ual g

ener

atio

n (G

Wh)

Cum

ulat

ive

inst

alle

d ca

paci

ty (M

W)

Cumulative installed capacity (MW) Annual generation (GWh)

Source: GlobalData, Power eTrack, Capacity and Generation Database [Accessed on: June 18, 2013]





Table 7: Power Market, Ethiopia, Cumulative Installed Capacity (MW) and Annual Power Generation (GWh), 2000–2030

Year Cumulative installed capacity (MW) Annual generation (GWh)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Source: GlobalData, Power eTrack, Capacity and Generation Database [Accessed on: June 18, 2013]




Appendix

9 Appendix

9.1 Market Definitions

9.1.1 Power

The rate of production, transfer, or energy use, usually related to electricity. Measured in watts and

often expressed in kilowatts (kW) or Megawatts (MW). This is also known as "real" or "active"

power.

9.1.2 Installed Capacity

Installed capacity refers to the generator’s nameplate capacity, as stated by the manufacturer, or

the maximum rated output of a generator under given conditions. Installed capacity is given in MW

on a nameplate affixed to the generator.

9.1.3 Active Installed Capacity

Active installed capacity refers to the component of electric power that actually performs work. It is

given kW or MW.

9.1.4 Electricity Generation

Electricity generation is something producing electric energy by transforming other forms of energy.

This term also refers to the amount of electric energy produced, expressed in Gigawatt hours

(GWh).

9.1.5 Electricity Consumption

Electricity consumption is the sum of electricity generated, plus imports, minus exports, minus

transmission and distribution losses. It is measured in GWh.

9.1.6 Thermal Power Plant

This is a plant where the turbine generators are driven by burning fossil fuels.

9.1.7 Hydropower Plant

This is a plant where the turbine generators are driven by falling water.




Appendix

9.1.8 Nuclear Power

This is the electricity generated by the use of thermal energy, released from the fission of nuclear

fuel in a reactor.

9.1.9 Renewable Energy Resources

These are naturally replenishing energy resources that are limited in the amount of energy that is

available per unit of time. For example, biomass, geothermal, solar and wind energy are all

renewable resources.

9.2 Abbreviations

Table 18: Abbreviations ACP African, Caribbean, and Pacific Group of States

AfDB African Development Bank Group

ARGeo African Rift Geothermal Development Program

AU African Union

CAGR Compounded Annual Growth Rate

Ckm Circuit kilometer

COMESA Common Market for Eastern and Southern Africa

DA Double Curvature

EAC East African Community

EAPP East African Power Pool

EEA Ethiopian Energy Agency

EEPCo Ethiopian Electric Power Corporation

ER Rock Fill

ETSIP Electricity Transmission System Improvement Project

FAO Food and Agriculture Organization

FDI Foreign Direct Investment

G24 Group of 24

G77 Group of 77

GDP Gross Domestic Product

GTP Growth and Transformation Plan

GWh Gigawatt Hour

ICS Inter-Connected System

ICSID International Center for the Settlement of Investment Disputes

IFAD International Fund for Agricultural Development

IFC International Finance Corporation




Appendix

ILO International Labour Organization

IMF International Monetary Fund

IMO International Maritime Organization

JV Joint Venture

kV Kilo Volt

kW Kilowatt

kWh Kilowatt Hour

MDG Millenium Development Goal

MIGA Multilateral Investment Guarantee Agency

MW Megawatt

NBI Nile Basin Initiative

PASDEP Plan for Accelerated and Sustained Development to End Poverty

PV Photovoltaic

PV Photovoltaic

RCC Roller Compact Concrete

RMF Risk Mitigation Fund

SCS Self-Contained System

SDPRP Sustainable Development and Poverty Reduction Program

T&D Transmission and Distribution

TE Earth Fill

UEAP Universal Electricity Access Program

V Volt

WIPO World Intellectual Property Organization

Source: GlobalData




Appendix

9.3 Bibliography

CIA (2013). Ethiopia: The World Factbook. Central Intelligence Agency. Available from:

https://www.cia.gov/library/publications/the-world-factbook/geos/et.html [Accessed on: June 17,

2013]

EEPCo (2013). ELECTRICITY TSIP. Ethiopian Electric Power Corporation. Available from:

http://www.eepco.gov.et/project.php?pid=11&pcatid=3 [Accessed on: June 18, 2013]

IMF, 2013. World Economic Outlook Database, April 2013 [database]. Available at:

http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/download.aspx [Accessed on: June

17, 2013]

MoFED (2012). Growth and Transformation Plan (2010/11-2014/15), Annual Progress Report

for F.Y. 2010/11. Ministry of Finance and Economic Development, June 2012. Available from:

http://www.mofed.gov.et/English/Resources/Documents/GTP%20Annual%20progress%20Rep

ort%20%282010-11%29.pdf

Precise Consult International, LLC (2013). EEPCo Starts Power Export to Sudan. Precise

Consult International, LLC. Available from:

http://www.ethiopiainvestor.com/index.php?view=article&catid=1%3Alatest-

news&id=3791%3Aeepco-starts-power-export-to-sudan-&option=com_content [Accessed on:

June 19, 2013]

UNCTAD, 2013. Inward and outward foreign direct investment flows, annual, 1970-2012

[database]. Available from:

http://unctadstat.unctad.org/TableViewer/tableView.aspx?ReportId=88 [Accessed on: June 17,

2013].




Appendix

9.4 Coverage

This report gives detailed information on the country’s power market. It examines the country’s

power market structure and provides historical and forecast numbers for generation, capacity and

consumption up to 2030. The report provides insights on the market’s regulatory structure, import

and export trends, competitive landscape and leading active and upcoming power projects.

9.5 GlobalData’s Methodology

GlobalData’s dedicated research and analysis teams consist of experienced professionals with

backgrounds in marketing, market research and consulting in the power industry, and advanced

statistical expertise.

GlobalData adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and

the Strategic and Competitive Intelligence Professionals (www.scip.org).

The following research methodology is followed for all country outlook reports.

9.6 Primary Research and Analysis

Secondary research is further complemented through primary interviews with industry participants

to verify and fine-tune the market numbers obtained through secondary research and get first-hand

information on industry trends.

The participants are drawn from a diverse set of backgrounds, including equipment manufacturers,

industry associations, government bodies, utilities, distributors, and academia. The participants

include, but are not limited to, C-level executives, industry consultants, academic experts, business

development and sales managers, purchasing managers, plant managers, government officials,

and industry spokespeople.




Appendix

9.7 Secondary research and analysis

The capacity, generation and consumption data is collected and validated using a number of

secondary resources including but not limited to:

Government agencies, ministerial websites, industry associations, the World Bank, statistical

databases

Company websites, annual reports, financial reports, broker reports and investor presentations

Industry trade journals, market reports and other literature

GlobalData’s proprietary databases like the Capacity and Generation Database, Power Plant

Database and Transmission and Distribution Database.

Further to this, the following secondary information is collected and analyzed to project the

country’s power market scenario through to 2030, analyzing factors such as the following:

The country’s macroeconomic scenario

Government regulations, policies and targets

Government and private sector investments

Contract and deal announcements

Utility expansion plans

The sector’s historic track record

Other qualitative insights built through secondary research and analysis of company websites,

annual reports, investor presentations, industry and trade journals, and data from industry

associations.




Appendix

9.8 Contact Us

If you have any queries about this report or would like further information, please contact us.

North America: +1 646 395 5460

Europe: + 44 207 406 6789

+ 44 1204 543 523

Asia-Pacific: + 91 40 6616 6700

Email: [email protected]

9.9 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission of the publisher, GlobalData.