IEEJ: June 2010

Energy policy of Ethiopia
Ministry of Mines & EnergyCountry Paper

Japan International Cooperation Agency (JICA)
Tokyo International Centre,May 11, 2010

IEEJ: June 2010

OUTLINE1.

Background on Energy Sector of Ethiopia

2.

Country Energy policy
2.1 Energy Sector Issues
2.2 Objectives and Rationales of Energy Policy
2.2.1

Rationales of Energy Policy

2.2.1

Objectives of Energy Policy

2.3 Priority of The Energy Policy
2.4 main Energy Policy
2.4.1

Policy on Energy Resource Development

2.4.2
Policy on Energy Supply
2.4.3
Policy on Energy conservation and efficiency
2.4.4
Policy on Comprehensive Measur
3. Energy demand and supply statics
4. Participant’s interest Areas in the Training

IEEJ: June 2010

1. Background on Energy Sector ofEthiopia
Ethiopia’s energy consumption is
predominately based on◦ Traditional Energy Sources (Fuel wood,Charcoal, dung cakes ..) (94%).
◦ Modem Energy source( mainly products ofpetroleum and Electricity)6%
 products of petroleum 90%; Petroleum productare e the major part from modem energy andmainly used for transport sector
 Electricity1.5%
Hydropower 83%From fuels 17%

 Per capita electricity consumption is28kWhIEEJ: June 2010

1. Background cont..
Energy Resource

Exploitable Potential

1. Biomass ( million t/y)
* Woody•Agri-residue + dung
2. Hydro (MW)
3. Geothermal (MW)
4. Average Solar(KWh/m2.day)
5. Wind ( m/s )6. Coal (million ton)
7. Natural Gas ( TCF)

1120
15-20
45,0005,000-7,000
55-6
320
4

Fuel wood = 77%
Agri + dung + Charcoal = 15%
Petroleum = 4%
Electricity = 2%

( electricity – access = 31% )IEEJ: June 2010

2. COUNTRY ENERGYPOLICYIEEJ: June 2010

2. 1 Energy Sector Issues
 Ethiopia has inadequate energy supply

and utilization; There is the need to transform fromtraditional to modern energy sources tosupport the development requirement ofthe country;
 The continued destruction of forestry
resources for firewood has resulted inenvironmental problems, loss of
productivity and ecological imbalance

IEEJ: June 2010

2.1 Energy Sector Issues cont..
 Increasing scarcity and cost of household

fuels, particularly firewood; increased stresson women and children who usually aresupposed to collect fuel; Traditional energy consumption in Ethiopia isassociated mainly with environmentalproblems; The impact of rising price of petroleum
imports on trade and foreign exchange
availability;
 Recent growth in investment has shown thatenergy supply is not in pace fast growing
demand.

IEEJ: June 2010

2.1 Energy Sector Issues
cont..
 Low energy efficiency utilization in allsector;
 primitive and highly dependent on
animate power agricultural sector;
 Lack of access and/or unavailability tomodern energy sources in rural areas;

IEEJ: June 2010

2.2 Objectives and Rationales of Energy
Policy2.2.1Rationales of Energy Policy
 To develop and utilize the country's energy

resources in line with the country’s overall
development strategy;
 To assist other economic sectors to meet theirdevelopment objectives by putting in place aclearly defined energy policy;
 To save scarce foreign exchange resources andto ensure that energy is efficiently utilized;
 To ensure reliable and secure energy supplies tocushion the economy from external and internal
disruptions of supply as well as price fluctuations;IEEJ: June 20102.2.1 Rationales of Energy Policy cont..
 To ensure energy resource development

for economic profitability;
 To ascertain what energy technologies
and equipment are appropriate for andcompatible with the country’s economic
development needs and To raise the efficiency of the energy
sector and develop the necessary
institutional and manpower capabilities toundertake energy development
programs.

IEEJ: June 2010

2.2.2 Objectives of Energy Policy
 To ensure sustainable (reliable, affordable and longlasting) supply of energy;
 To remove bottlenecks inherent to energy resource
development and utilization;
 To provide guidelines and strategies for the fasterdevelopment and supply of energy;
 To ensure a reliable supply of energy at the right timeand affordable price; To give priority to the development of indigenous
energy resources;
 To increase energy utilization efficiency and reduceenergy waste and To ensure that the development and utilization ofenergy is benign to the environment.

IEEJ: June 2010

2.3 Priority of the Energy Policy Give high priority on hydropower

resource development; Encourage energy mix: renewable suchas solar, wind and geothermal are to be
developed given their costcompetitiveness take appropriate policy measures toachieve a gradual transition fromtraditional energy fuels to modern fuels; pay due and close attention to ecologicaland environmental issues during thedevelopment of energy projects;

IEEJ: June 2010

2.3 Priority of the Energy Policy cont..
 set issues, and publicize standards

and codes which will ensure thatenergy is used efficiently;
 develop human resources andestablish competent energy
institutions; and provide the private sector withnecessary support and incentive
to participate in the development ofthe country’s energy resources.

IEEJ: June 2010

2.5 MAIN ENRGY POLICY 2.5.1
 2.5.2
 2.5.3
 2.5.4

Policy on Energy Resource
development
Policy on Energy Supply
Policy on Energy conservationand Efficiency
Policy on Comprehensivemeassures

IEEJ: June 2010

2.5.1 Energy Resource Development
2.5.1.1 Traditional Fuels
 Countrywide afforestation program will be undertaken toenhance the supply of fuel wood to consumers and to reduce the negative effects of agric-residue use for energy
on soil fertility
2.5.1.2 Modem energy resource development
Hydropower will form the backbone of the country’s energy
sector development strategy as it is the country’s mostabundant and sustainable energy resource;Ethiopia’s geothermal and coal resources will be developedon the basis of their economic profitability;

IEEJ: June 2010

2.5.1 Energy Resource Development cont..
2.5.1.3
Alternative energy resources
development Policy Solar and geothermal will be used,
wherever possible for process heat andpower generation;
 Ethiopia’s wind energy resource will be
developed to provide shaft power forwater pumping and irrigation and;
 Coal will be developed and used asalternative fuel in local industries.

IEEJ: June 2010

2.5.2 Policy on Energy Supply
2.5.2.1
Households energy Policy
 this is to achieve a balance between the supply anddemand for household utilities. Government will seek tostabilize their prices by increasing the supply ofalternative fuels and relieving the pressure on woodresources.
2.5.2.2
Transport energy Policy
 to formulate measures and give emphasis to theintroduction of improved and appropriate transporttechnologies in the rural areas
 to adopt conservation measures to reduce the use ofpetroleum products in the transport sector
 to decrease the use of petroleum products in thetransport sector by substituting where ever possible tonew non petroleum fuels

IEEJ: June 2010

2.5.2 Policy on Energy Supply
cont..
2.5.2.3
Agricultural energy policy
Government’s agricultural sector energy
supply policy is to increase the supply ofmodern energy sources to the agriculture
sector.
2.5.2.4
Industrial Energy Policy Government’s industrial sector energy policy
is to ensure that industrial energy supply will
he compatible with the industrial developmentof the country; and to ensure the industrial energy use andsupply will be based on economic andefficiency criteria

IEEJ: June 2010

2.5.3 Policy on Energy conservationand efficiency
 it is necessary to adopt energy

conservation and efficiency measuresin all sectors. It is also necessary toestablish the necessary mechanisms
to ensure adherence to suchstandards and codes.

IEEJ: June 2010

2.5.4 Policy on Comprehensive
Measures Energy and environment (powergeneration, transmission, distribution)
 Energy Science and Technology(Traditional energy and electricity) Energy Policy Manning andManagement (least cost)IEEJ: June 2010

3. Energy demand and supply statistics
Table1.Estimated Fuel wood Supply &Demand (million m3 )YearDemandSustainable Supply

Deficit

1997
2000

52.9
58.4

11.7
11.2

41.2
47.2

2005

68.5

10.4

58.1

IEEJ: June 2010

3. Energy demand and supply statistics

cont..
Table1.Estimated Fuel wood Supply & Demand (millionm3 )YearDemandSustainable Supply

Deficit

1997
2000

52.9
58.4

11.7
11.2

41.2
47.2

2005

68.5

10.4

58.1

IEEJ: June 2010

3. Energy demand and supply statistics

Cont…
Table 2. Supply & Demand Balance ( MWh)2005/06

2006/07

2007/08

Total production

2896600

33018593547000

Total supply*Own use*T +D losses

2896600
5670
53532033018598100
6649593547000
24700
329300Total final Consumption*Industry*Transport

2361280na
na

2636900
921200na

3217700
1236400
na

Others*Com + Pub.
*Household*Streetlight57264078024033120

66270099890046000

7941001116700
45800

IEEJ: June 2010

3. Energy demand and supplystatistics Cont…
Table 3. Petroleum products supply and Consumption
Petroleum products supply (Tons)
year

gasoline

Jet fuel

Kerosene Diesel oil

2005/06 137233
2006/07 148368
2007/08 138993

368670411357
naNaNa4822198110139279391072793

Fuel oil

total

158207 1475122
158841 1646505
187287 1881272

Petroleum products consumption (Tons)
Year

gasoline Jet Fuel

Kerosene

Diesel oil

Fuel oilTotal

2005/06
2006/07
2007/08

147514 145775
144637 177049
1430224 218500

2298982429252656658513819279391077193

16194216326817592615365101655819
1880308

IEEJ: June 2010

4. Shortcomings in Energy Policy
Formulation
a.

b.
b.

Shortage of qualified personnel forformulating proper policy for the various
energy sub-sector;
Insufficient Assessment of Energy
Resource and Technologies;
Lack of Timely Updating;IEEJ: June 2010

5. Participant’s interest Areas in theTraining
Important areas needed are:
Energy policy and strategy formulationEffect of energy demand and supply on theenvironment;This will help us to recognize the possibility of
having a sustainable energy supply for thegrowing demand while keeping ourenvironment safe and sound and the use ofenvironmentally friendly technologies..

Contact: report@tky.ieej.or.jp