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Thesis Template IIIEE Theses 2016:15 The political economy of decentralized approaches to rural electrification in Tanzania: Implications for agro-industry co-generation projects Shamim Zakaria Supervisors Philip Peck Yacob Mulugetta Thesis for the fulfilment of the Master of Science in Environmental Sciences, Policy & Management (MESPOM) jointly operated by Lund University – University of Manchester - University of the Aegean – Central European University Lund, Sweden, June 2016 Erasmus Mundus Masters Course in Environmental Sciences, Policy and Management MESPOM This thesis is submitted in fulfilment of the Master of Science degree awarded as a result of successful completion of the Erasmus Mundus Masters course in Environmental Sciences, Policy and Management (MESPOM) jointly operated by the University of the Aegean (Greece), Central European University (Hungary), Lund University (Sweden) and the University of Manchester (United Kingdom). © You may use the contents of the IIIEE publications for informational purposes only. You may not copy, lend, hire, transmit or redistribute these materials for commercial purposes or for compensation of any kind without written permission from IIIEE. When using IIIEE material you must include the following copyright notice: ‘Copyright © Shamim Zakaria, IIIEE, Lund University. All rights reserved’ in any copy that you make in a clearly visible position. You may not modify the materials without the permission of the author. Published in 2016 by IIIEE, Lund University, P.O. Box 196, S-221 00 LUND, Sweden, Tel: +46 – 46 222 02 00, Fax: +46 – 46 222 02 10, e-mail: [email protected]. ISSN 1401-9191 2 Table of Contents ABBREVIATIONS ........................................................................................................................ 5 ACKNOWLEDGEMENTS ......................................................................................................... 10 ABSTRACT ................................................................................................................................. 12 EXECUTIVE SUMMARY .......................................................................................................... 13 1 INTRODUCTION .............................................................................................................. 15 1.1 PROBLEM DEFINITION ............................................................................................................................. 18 1.2 RESEARCH QUESTION .............................................................................................................................. 21 1.3 METHOD ..................................................................................................................................................... 21 1.4 LIMITATIONS AND SCOPE ........................................................................................................................ 22 1.5 AUDIENCE .................................................................................................................................................. 23 1.6 DISPOSITION .............................................................................................................................................. 24 2 LITERATURE ANALYSIS ................................................................................................. 25 2.1 BIOMASS COGENERATION ...................................................................................................................... 25 2.2 POLITICAL ECONOMY APPROACHES ...................................................................................................... 27 2.3 TANZANIA .................................................................................................................................................. 32 2.3.1. Country Profile ......................................................................................................................................... 32 2.3.2. A historical perspective ............................................................................................................................. 35 2.3.3. Energy mix .............................................................................................................................................. 38 2.3.4. Sector Structure ........................................................................................................................................ 40 2.3.5. Policy and Regulatory Framework: ........................................................................................................... 45 2.3.6. Barriers for Renewable Energy Penetration ............................................................................................... 49 3 RESULTS AND ANALYSIS ............................................................................................... 51 3.1 SUGAR ......................................................................................................................................................... 51 3.2 SISAL ............................................................................................................................................................ 56 3.3 RICE HUSK .................................................................................................................................................. 59 3.4 POLITICAL-ECONOMY ANALYSIS ............................................................................................................ 65 4 DISCUSSION ...................................................................................................................... 76 5 CONCLUSIONS ................................................................................................................. 77 BIBLIOGRAPHY ........................................................................................................................ 79 APPENDIX A: INTERVIEWEES .............................................................................................. 87 APPENDIX B: SAMPLE OF GUIDING QUESTIONS ............................................................ 89 APPENDIX C: BIOENERGY PATHWAYS .............................................................................. 94 APPENDIX D: APPLIED PEA FRAMEWORK ....................................................................... 95 APPENDIX E: MAP OF TANZANIA ....................................................................................... 97 APPENDIX F: AGRICULTURAL INITIATIVES OVER THE YEARS .................................. 98 APPENDIX G: GOT STRATEGIES, PLANS AND POLICIES ................................................ 99 APPENDIX H: TANESCO EXISTING MAIN GRID ........................................................... 100 APPENDIX I: 2015 AND 2016 TARIFF STRUCTURE .......................................................... 102 APPENDIX J: PLANTATION PARAMETERS AND PRODUCTION DATA...................... 105 APPENDIX K: SISAL VALUE CHAIN, COMPANIES AND PRODUCTION DATA .......... 107 3 APPENDIX L: GRID CONNECTED CAPACITY TANZANIA AS OF 2014 ......................... 110 List of Figures Figure 1-1: Africa's Energy Landscape Figure 1-2: Achieving the objectives of TDV 2025 Figure 2-1: PEA framework for power sector Figure 2-2: United Republic of Tanzania population trends and projections 1950-2100 Figure 2-3: Institutional framework and market structure of the electricity sector Figure 3-1: Organizational structure of the sugar industry Figure 3-2: Potential entry points for agro-industries within the ESI structure List of Tables Table 2-1: Categorization of political-economy approaches Table 2-2: Key upstream gas projects in Tanzania Table 2-3: Power Generation Capacity in 2013 Table 2-4: TANESCO’s timeline: key events and ownership dynamics Table 2-5: ESI Reform Strategy Phases and Timeline Table 2-6: Tanzania REFiT Design Features Table 2-7: Barriers of renewable energy in Tanzania Table 3-1: Installed rice husk biomass plants so far Table 3-2: Potential entry points for upcoming agro-industries stakeholders interviewed within the ESI structure Table 4-1: Installed generation capacity for 2012 and planned 2030 installed capacity by source type according to PSMP Table 4-2: Summary of the investment requirements for VSPPs, SPPs and IPPs Table 4-3: Shares/costs of capacity and generation by type of producer: Tanzania 2013 4 Abbreviations AfDB – African Development Bank AGRICEN - Agro-industries and Clean Energy in Africa ASDP – Agricultural Sector Development Program BAU – Business as Usual Bcm – billion cubic metres BEE – Bagamoyo EcoEnergy Ltd BEST - Biomass Energy Strategy BRN – Big Results Now Initiative CAADP – Comprehensive Africa Agriculture Development Programme CCM – Chama cha Mapenduzi CFC – Common Fund for Commodities DAC – Development Assistance Countries of the OECD DARESCO – District Electricity Supply Company DECC – Department of Energy and Climate Change DIY – Do it yourself DSE – Dar es Salaam Stock Exchange DFID – Department for International Development EEP – Emergency Power Producers EJ – Exajoules EPPs - Emergency Power Producers ESI - Electricity Supply Industry EWURA – Energy and Water Utilities Regulatory Authorities FAO – Food and Agriculture Organization FID – Final Investment Decision FIT – Feed-in Tarriff 5 GDP – Gross Domestic Product GEF – Global Environment Facility GET FiT – Global Energy Transfer Feed in Tariff GoT – Government of Tanzania GWh – Gigawatt hours HPS – Husk Power Systems IIIEE – International Institute for Industrial
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