FOCUS AFRICA – Ethiopian Great Run: will green energy sustain growth?

The Federal Democratic Republic of Ethiopia is among Africa’s largest states, and the second in terms of population. The 101 million Ethiopians are experiencing a sharp increase in their per capita GDP since 2002, according to the World Bank. Ethiopia’s “Great run” in terms of economic growth during the years 1992-2004 and, even more incisively, during 2004-2014, has indeed not altered the country’s records in terms of equality, as showed by recent data. However, Ethiopia remains one of the poorest countries worldwide.

The majority of the population lives in agricultural highlands all across the country. In 2012 only 26.56 per cent of the population had access to electricity.  Nevertheless, this figure represents a positive improvement when compared to data from the last fifteen years. Agriculture (and the cultivation of teff in particular) represents a major input of Ethiopian GDP although the government, in its last development plans, repeatedly stressed the necessity of a transition towards the industry sector . In a 2014 report, the World Bank analyzed how Ethiopian workers are leapfrogging from agriculture to the service sector, without an intermediate industrial development. The services sector gradually took over and has been complemented by a construction boom. The government fostered this boom by encouraging the construction of new infrastructures, which contributed substantially to the overall positive macroeconomic output. The Ethiopian mix of a post-communist economy with open market rules has been described as “the Ethiopian model”, in some way similar to the emerging Asian economies but rather novel to Africa.

The overall economic boom has not been immediately followed by investments in renewable energies or in a general rearrangement of the national energy mix, which relies on traditional energy sources. As of 2014, the Ethiopian mix was dominated by biofuels and waste use (accounting together 92.33 per cent of the TPES), followed a tiny oil production (5.70 per cent), and energy production from hydropower (1.63 per cent). A small share of imported coal was still present in the energy production pattern. The renewable energy production share, on the other hand, still accounted for less than one per cent of the TPES. With 392 GWh on total 9615 GWh electricity production in 2014, wind energy may be considered as a potential substitute for energy generation. To date, indeed, Ethiopia appears as the only “INDC high-ambition country”  to have already invested in renewables (see the previous article in Focus Africa).

A 2014 study suggests that “traditional” investments in renewable energy production, together as grid improvements and rural electrification, will not solve the general energy gap experienced by agricultural districts because most of households’ energy demand is actually for cooking. According to the study, a massive electrification campaign will remove only partially the dependence on traditional fuels, as rural inhabitants will not easily abandon their cooking traditions, using the eventual new energy only for lighting and for some elementary services. The current annual Ethiopian households’ energy demand for cooking is ten times as large as the household use for cooking in western countries. The cooking process, moreover, suffers from great energy losses. According to the same study, the country has an annual exploitable electric energy potential of 7.5 PWh from solar energy, 4 PWh from wind energy and 0.2 PWh from hydroelectric energy. To date, with 32 MW installed capacity, less than 1 per cent of the wind potential is currently exploited. As shown in the following map, the areas with the highest wind potential are mostly located in the Somali-inhabited Ogaden region, close to the disputed Ethiopia-Somalia border. The region is characterized by very low development levels, and cyclical  political instability.


Ethiopia’s great RE potential could meet alone the energy demand. However, electricity,  may not be the most suitable option for for heating and cooking food and a substitution of energy sources will not, thus, occur automatically. Previous studies have asserted that the classical “energy ladder” model (increases in per capita income will lead to a substitution in fuel preferences towards modern and greener technologies) is  not applicable to sub-Saharan Africa, arguing instead for a multi-fuel choice which takes into account cooking habits and traditions – the so-called “energy stacking” model. According to a 2014 study, however, different levels of disposable modern energy sources lead to potentially different results in terms of fuel choice, as observed in urban areas, therefore suggesting a good potential for change in the households’ energy mix if development policies are to be fulfilled.

Moreover, studies have observed a fast depletion of fuelwood reserves during the last two decades due to the mix of economic and demographic growth with, as said, almost no fuel substitution phenomena in rural areas. Substitution policies and incentives are therefore to be implemented in order to avoid fuel energy scarcity in the near future.

Through its INDC, the Ethiopian government has ambitiously committed to leapfrog to modern and energy efficient technologies in transport, industry and building sectors, while expanding energy generation from REs. Much attention has been given to adaptation measures. In terms of mitigation, Ethiopia (which contributes only marginally to global emissions with a tiny 0.13 per cent share) committed to a 64 per cent reduction of its emissions by 2030. The total estimated cost of adaptation and mitigation policies is150 billion USD. International support is explicitly considered a key component to achieve Ethiopia’s climate pledges, as the country’s national GDP amounted to 61 billion USD in 2015.

 

(Image: Harvest time in Ethiopia. Photo credit: SarahTz/Flickr)