Hilawe Lakew, Getenet Tesfaye, Ethio Resource Group (ERG) and Asrat Yirgu, Christian Aid Ethiopia November 2011
This report is one of six African country case studies commissioned by Christian Aid to support the report Low-Carbon Africa: Leapfrogging to a Green Future. All are available at: christianaid.org.uk/low-carbon-africa
Contents 1. Country context 1. Country context 1 Ethiopia is a country of 86 million and public services, accounts for the 1.1 Energy Resources 2 people living in an area of 1.1 remaining 46 per cent of the GDP. 1.2 Short-term Plans for the million square kilometres. It is a The economy has grown rapidly Energy Sector 3 very diverse country with eighty- over the past five years (11 per 1.3 Main Issues in the Energy five ethnic groups and complex cent/year) and per-capita GDP now Sector 3 geography and climate. About two- stands at US$300. The short-term 1.4 Energy and Climate thirds of the population lives in the government plan projects similarly Resilience and Adaptation 4 highlands, which constitute about a rapid growth for the next five years. 1.5 Low Carbon Development third of the total land mass; the main One of the defining characteristics Strategies 4 source of livelihood in the highlands of the energy sector in Ethiopia is is mixed crop and livestock 2. Case studies 5 its overwhelming dependence on production. The remaining third of 2.1 The National Biogas biomass energy. Biomass energy, the population lives in the lowlands Program of Ethiopia 5 consisting of wood, charcoal and and practise pastoral (livestock) and 2.2 Humbo Natural Regeneration agricultural residues, provides agro-pastoral production. Project 7 ninety-two per cent of the total 2.3 Solar Energy for Rural Agriculture is still the main economic final energy consumed. The main Electrification 8 activity in Ethiopia; it accounts for uses for biomass energy are for 3. Leapfrog fund potential 11 41 per cent of the gross domestic residential and commercial cooking. 3.1 Applications and production (GDP) and employs more Biomass residues are also used in Beneficiaries 11 than twelve million households. the sugar and tea industries. More 3.2 Types and Roles of Agriculture in Ethiopia is based recently, liquid bioenergy in the Financing Mechanisms 11 on small-scale crop and livestock form of ethanol has started to be 3.3 Need for Complementary production; the mean land holding used as a gasoline (E10) in Addis Support 11 by farming households is just under Ababa. Per capita consumption 3.4 Role of the Private sector 1ha with mean annual output of 1.5 of bioenergy in Ethiopia is about and PPP 12 tons (of mainly cereals). Industry 1 tonne; annual consumption of 3.5 Conclusion 12 contributes 13 per cent to GDP; biomass energy exceeds 80 million the main contributors to industrial tonnes. Endnotes 13 output are construction and Fossil fuels provide 9.5 per cent of References 13 manufacturing. The service sector, the total final energy supply and are which is composed of distributive Figure 1. Final energy capita consumption of electricity is yet to develop its other renewable only 35kWh per annum. and non-renewable resources in consumption by fuel significant scale. Biomass energy supply is by user Solid households in rural areas and Energy supplies in Ethiopia are Electricity fossil fuels 2.6% commercial supply from small-scale mainly from renewable sources. 0.2% suppliers in urban areas. Practically However, the level of use for Petroleum 9.2% all rural households collect their renewables is disparate, with a very biomass fuels, and tens of thousands high level of use for bioenergy and of rural people are engaged in the limited use of others. Bioenergy commercial supply of wood and uses in Ethiopia are generally not charcoal to urban areas. Petroleum is sustainable: according to a recent imported by a government agency, study, in more than two-thirds of the Ethiopian Petroleum Enterprise districts bioenergy uses surpass Biomass (EPE), and distributed by several sustainable yields. Bioenergy 87.9% domestic and international oil contributes to greenhouse gas companies. The Ethiopian Electric emissions, due to deforestation and Power Corporation (EEPCO) is the non-renewable use of biomass, in national power company with the addition to other local environmental mandate to generate and distribute problems it creates. There is power throughout Ethiopia; there significant potential to diversify The energy balance in Ethiopia is are a few very small private and bioenergy sources into liquid dominated by biomass energy. Eighty- cooperative power generators, but biofuels and energy recovery from eight per cent of the final energy their combined capacity is less than urban domestic and industrial waste. supplied in the country comes from 1 per cent of the capacity of EEPCO. biomass fuels (wood, charcoal and Hydropower is the most agricultural residues). The main use economically viable power of biomass energy in Ethiopia is for 1.1 Energy resources generation resource for Ethiopia, cooking in residential and commercial but only five per cent of the Indigenous energy resources in establishments. Demand for biomass available potential is now utilized. Ethiopia consist of renewables fuels is growing as rapidly as food The government has now made including hydro, bioenergy, wind, production (i.e. 6% annually). considerable commitment to geothermal, and solar. Ethiopia accelerate the development of also has some fossil resources in hydropower resources with the natural gas and coal. Ethiopia relies consumed in the transport, industry view to increase output to 40GW heavily on a limited set of renewable and residential sectors. Ethiopia (or about a quarter of the total energy resources to meet its does not produce fossil fuels potential available) by 2015 to 2020. requirements: principally biomass and imports all its requirements. Hydropower plants in Ethiopia are for thermal energy in the residential The annual import of fossil fuels large and getting larger; projects and commercial sector and large now stands at 2 million tons. The now under construction include two hydropower for electricity. It has largest demand for fossil fuels is hydropower plans with capacities for transport, where about three- quarters of the total import is used; Table 1. Indigenous energy resources of Ethiopia the remaining amount is consumed in industry and in urban residential Exploitable cooking. Per capita consumption of Resource Unit potential Developed petroleum production is just 23kg. Hydropower TWh 159 7.6 Electricity provides 2.6 per cent Small TWh 16 Negligible of the final energy supply. Total hydropower electricity consumption is just over 3,000GWh divided by sector Wind Area with wind speed 33,771 0 as follows: residential (36 per above 7m/s (km2) cent), industrial (37 per cent) and Solar kWh/m2.d 5.5 Negligible commercial (26 per cent. The electricity supply infrastructure in Geothermal TWh 22 0 Ethiopia now consists of 2000MW of installed capacity in eleven Biomass Yield in million tonnes/year 96 58 hydro and several small thermal Natural gas Trillion cubic feet 2.7 0 plants, 12,150km of transmission and 126,000km of distribution lines Coal Tonne 70 0 and about 2 million customers. Per Source: Ministry of Mines and Energy, 2007; World Energy Council, 2007 of 1800MW and 5200MW. There per cent. Access to sustainable basic services and for growth. are fewer than fifty pico and micro and improved energy services are, Energy access indicators for hydropower plants in Ethiopia, however, still very low: per capita Ethiopia are very low; they are lower with combined generating capacity electricity consumption is only than the Sub-Saharan average (in below 10MW. 35kWh and per-capita consumption areas such as rural electrification of petroleum fuels is 23kg. These level and per capita modern energy Wind energy has been promoted figures compare unfavourably even use). The four key issues for the for water-pumping applications to Sub-Saharan Africa levels. sector are: in rural Ethiopia for the past forty years. However, it has never been The government now sees energy widely adopted. Wind-power as an important development Increasing access to generation is now considered a input and is increasing capacity, sustainable energy viable supplement to hydropower infrastructure and access. The major The majority of people do not have on the national grid and two wind plans for the next five years include: sufficient and sustainable energy farms are now under development to provide for their basic needs • Addition of 9673W of power in the north and central parts of such as cooking, lighting, and generation capacity (8737MW Ethiopia, with combined capacity information; they also lack energy hydro, 866MW wind). of about 170MW. There are plans to for productive activities to improve develop six more wind farms, with • Providing basic electricity their economic status. Households total capacity of 700MW. The power- access to 100 per cent of the spend quite a substantial proportion generation potential from areas with population (access defined as of their income, time and effort to the highest wind energy density providing access to distribution acquire energy to meet their basic (those exceeding 7m/s at 50m above infrastructure for all towns and needs; women in particular are ground level) is 170GW. villages). heavily burdened with fuel collection and meal preparation, which Current uses of solar energy are • Dissemination of 14,000 domestic impacts their health and limits their for off-grid rural applications in biogas plants. opportunity for full participation in homes, rural telecoms and in the • Dissemination of 3 million solar social and economic life. social sectors (water pumping, home systems. health services, schools). Solar Providing adequate energy energy is also becoming an • Producing and using 1.8 billion for growth important alternative to water litres of liquid biofuels. The Ethiopian economy is growing heating in the major cities. The • Promote demand side rapidly from a low base; energy current total installed photovoltaic management for electricity in all demand for manufacturing, power in Ethiopia is about 3.5MW, sectors. transport, and agriculture are three-quarters installed in telecom stations (mostly in mobile towers Other development plans that will but also in other stations). Solar have significant impact on the Figure 2. Energy spending by water-heating installations are in a energy sector include: expenditure quintile thousand or so units in Addis Ababa • Introduction of electric freight and the major cities. 30% rail. This program is expected to Housing, water, energy 25% Fuel and power Ethiopia has geothermal power reduce freight transport by road Fuelwood and other potential estimated to range by as much as 50 per cent. 20% from 700 to 5000MW. One small • Introduction of urban passenger 15% geothermal plant (7MW) was rail. The plan foresees moving developed in the mid-1990s but 10% about 7 per cent of the total urban has ceased production after a few 5% passenger traffic onto mass transit years. The current power system electric rail (to be implemented in 0% expansion plan indicates that a Addis Ababa). Q1 Q2 Q3 Q4 Q5 All 70MW geothermal plant will come online by 2015. • Increased mining activity, Households in Ethiopia spend 9% particularly for potash in the of their income on energy. Firewood north, will increase the demand and other cooking fuels account for 1.2 Short-term plans for for freight transport significantly. 40% of this expenditure. While the the energy sector share of energy expenditure is the same for all income classes, the Demand for energy is growing 1.3 Main issues in the share of expenditure on fuelwood rapidly in Ethiopia. Electricity and other cooking fuels is greater for consumption on the national grid energy sector low-income households compared to has grown at more than 12 per cent The main challenge for the energy better-off households. annually,1 petroleum consumption sector in Ethiopia is to increase at 11 per cent and biomass at 6 access to sustainable energy for Source: CSA, 2007 increasing faster than the economy. frequent and have exposed millions 1.5 Low carbon Energy for these sectors must be to hunger and displacement. adequately provided to maintain Agriculture and the more than 12 development strategies economic growth. Electricity million households that depend The Ethiopian government has consumption on the national grid on it for their livelihood have been stated its intention to follow a green has grown by 12 per cent annually severely impacted. Climate change development path in its current in the recent past. The power utility is affecting hydropower production five-year development plan called estimates, however, that this rate of from Ethiopia’s hydro-dominated the Growth and Transformation growth is addressing only about half power system; this impact is Plan (GTP, 2011-2015). It is now of the actual demand (i.e. the unmet transmitted to the other sectors drafting a Climate Resilient Green demand for electricity is growing at of the economy, manufacturing Economy (CRGE) strategy, the first 12 per cent also). and services, rendering these draft of which is now out for public sectors as vulnerable to climate discussion. The strategy foresees Ensuring sustainability of change as agriculture. Losses of cutting greenhouse gas emission energy supply and use land productivity in agriculture and from Ethiopia by more than half in Sixty to eighty million tons of forestry are reducing access to 2030. It also foresees diversifying biomass fuels are consumed biomass energy, which provides for energy supplies and uses to increase annually in Ethiopia. This puts the basic needs of the population. climate resilience in the energy enormous pressure on forest The energy and climate change link sector. Some of the major actions resources and contributes has the following three dimensions: proposed for the energy sector in to deforestation and forest (a) vulnerability of energy supply to the draft strategy include energy degradation, which in turn climate change, (b) greenhouse gas efficiency for biomass fuels and, contributes to soil and water quality emissions from the energy sector, in transport, substitution of fossil degradation. Non-sustainable and (c) access to energy to enhance fuels with renewable electricity. For management of forest resources adaptive capacity. example, using electric freight rail to also result in the emission of replace petroleum fuel based road greenhouse gases. The energy system in Ethiopia freight transport. is vulnerable to climate change because the major sources of Low carbon development (LCD) Ensuring energy security both actions, in addition to being at the household and national energy supply, bioenergy and hydropower, both depend directly sustainable, are also in many levels on the climate. Diversity of supply cases more economic compared to Ethiopia is a poor, land-locked is the key to addressing these conventional alternatives. The major country which imports its entire problems; Ethiopia has a variety of actions anticipated for Ethiopia, petroleum fuel requirement; its renewable resources that it can use including renewable electricity for exposure to petroleum supply to this end. transport and energy efficiency, risks is high. The country relies cost less than their conventional on a few large hydropower plants The energy sector’s contribution to alternatives on a lifecycle basis. for electricity, which renders the greenhouse gas emission in Ethiopia Some of these measures also have power sector vulnerable to climate is about 15 per cent.2 Emissions are considerable local environmental variability. Excessive dependence mainly from fossil fuel use in the benefits in reducing air pollution on biomass energy adds to the transport, industrial and residential (indoor and outdoor), and in re- vulnerability of households to sectors. Emissions are expected to establishing the balance between climate change. Ensuring energy rise sharply in the next twenty years resource supplies and uses. security is critical for providing because of rapid economic growth, essential energy services as well particularly in the manufacturing The major barriers for low-carbon as to provide energy for growth. and transport sectors. These technologies include the relatively The key action to address this will emissions can be reduced high investment requirement, be increasing supply diversity and drastically through energy efficiency low institutional readiness, and rapid up-take of energy efficiency in and substitution of indigenous human and material capability for all sectors. renewables for fossil fuels. implementation. An LCD leapfrog fund can address these barriers One of the more important means and contribute towards the rapid 1.4 Energy and of increasing adaptive capacity uptake of low carbon technologies and is to increase productive in Ethiopia. climate resilience and capacity employment diversity, adaptation and to improve basic services for the population. Improving access Climate change has had severe to energy for irrigation; agricultural impacts on life and livelihoods output preservation and processing; in Ethiopia. Droughts and, to a manufacturing and social services lesser extent, floods have been will contribute to this goal. 2. Case studies
the reduction of greenhouse gas trials to reduce costs through 2.1 The National Biogas emission from combustion of non- low-cost designs, including one Program of Ethiopia renewable wood fuels. The program design (obtained through a regional has installed 1,500 units to date. experience exchange visit to Background: Uganda) which dramatically reduces The National Biogas Program of Technologies: the need for cement. Ethiopia (NBPE) is part of an Africa- The NBPE promotes biodigesters for wide program for large-scale Development benefits and impacts: domestic (residential) cooking and The NBPE has the primary objective deployment of domestic biogas. It is lighting in rural areas. The program implemented in four regional states of improving access to sustainable promotes the Nepalese fixed dome energy through the domestic biogas of Ethiopia which account for 85 per biodigester in four sizes (4, 6, 8, 3 technology. However, it has very cent of the total population. The and 10m3 gas-holding capacity). NBPE is implemented by a national significant impacts in the following Biodigesters are made of stone areas as well: coordinating office and four regional masonry with concrete domes. project offices. The program is Domestic biodigesters are installed a) Reduces demand for wood, supported by the Netherlands by technicians specially trained by thus helps redress the balance development organization SNV, who the program. between supply and demand. also supported the highly successful This has benefits in improving the Nepalese Biogas Programme Stoves and lamps for biodigesters sustainability of local resources, which installed more than 200,000 are presently imported from China. which has both economic and domestic biodigesters. However, local manufacturers have environmental benefits. already demonstrated capability to The background to this program is produce these and are expected to b) Reduces the fuel collection that Ethiopia is home to the largest be the main sources in the burden on women and children; cattle population in Africa (50 million near future. The project is also it also reduces cooking time. heads of cattle and 50 million other making trials to introduce a biogas Women now spend less time livestock) and it is also one of the baking stove.5 on fuel collection and less time most biomass-energy dependent on cooking (2 to 3 hours less for countries in the world. Ethiopia has The investment cost on the collecting fuel and preparing eighty-eight million people each domestic biogas plants ranges meals). Families now say they requiring about 1 ton of biomass from Birr 8,000 to Birr 16,000, feel comfortable asking fuels annually: this puts heavy depending on size, with the most neighbours and relatives for tea pressure on resources which have frequently installed domestic biogas and coffee because it now takes 3 become less accessible as demand system (6m capacity) costing Birr much less energy to prepare exceeds sustainable yields.4 Impacts 13,000 (US$765). This investment meals and drinks. go beyond the energy sector: local requirement is partly covered resources are degraded as trees are by a federal government grant c) Improves access to natural lost and the environment services of Birr 5,000 per plant, with the fertilizer from biodigester waste; they provide in water regulation and remaining amount coming from reduces demand for chemical protection of soils are also lost; these owner equity. Biogas users are fertilizers. Biogas users are now have had severe economic and social now provided credit from micro- cultivating fruits and vegetable impacts because they undermine the finance banks to cover part of their in their home gardens using productivity of agriculture which is equity contributions. the biogas slurry as fertilizer; households are also using slurry the source of livelihood for eighty per Building costs for domestic cent of the population. compost on cereal crops such as biodigesters are relatively high barley. The amount of biodigester in Ethiopia compared to other slurry available from the plant Project objectives: countries. The main reason for this is enough to replace a typical The program was launched in 2008 is the high cost of building materials household’s annual requirement with the goal of disseminating 14,000 in Ethiopia. Biodigesters are made for fertilizer (about 1 quintal of domestic biodigesters in five years. of stone masonry with substantial Diammonium phosphate (DAP) The program installed 1,400 units requirement for expensive cement and 0.5 quintals of urea with by June 2011. Multiple benefits are (a 50kg bag of cement costs annual saving of Birr 1,240). expected from the introduction of US$14, more than twice that in Results have been positive with biodigesters into rural Ethiopia, 6 other countries). Due to the high substantial additional income including improving access to cost of building biodigesters the for households. sustainable energy, improving the National Biogas Program now indoor environment, increasing the targets rural districts with relatively availability of natural fertilizer, and better incomes. There are now d) Reduces indoor air pollution from is composed of contributions • funding from other sources: 34 inefficient biomass stoves. from owners (40 per cent) and million (US$400/unit, in the form government grants (60 per cent). of farmer investment support) e) Reduces greenhouse gas Farmers meet half of their required emission from non-sustainable • the typical domestic biodigester contribution through loans from use of wood fuels and from will abate 4tCO2e/y, thus reducing microfinance banks.8 inorganic fertilizers. In most 80tCO2e over a twenty year areas of Ethiopia, woodfuel Program support per unit of period. The investment support consumption surpasses biodigester installed is Birr 5,800 (which could be a leapfrog fund, sustainable supply from forests, (US$350). The support includes LFF) will be US$5/tCO2e abated. and woodfuel consumption capacity building and program contributes to greenhouse gas administration in one program- Other types of support to emissions.7 It also reduces coordinating office at the the project: emission from application of federal level, and four regional A program to disseminate 100,000 inorganic fertilizers. executing offices. domestic biodigesters in rural The total investment on one unit of Ethiopia will require continued Opportunities and risks: biodigester is Birr 18,800 (US$1,150). capacity building and institutional The technical market for domestic Investment required to extend the support. This capacity is currently biogas in Ethiopia is estimated to be program beyond its first phase being built but requires sustaining 1 million units. The market potential of 14,000 biodigesters by 2013, to and further expansion. A major for the next ten years will be in the 100,000 biodigesters in 2018 will element of capacity building and order of 100,000 units. be US$99 million. The investment institutional support will be to extend required may be composed of: the present support to the district Types of investment needed: (Wereda) level for extensive reach. The investment on a typical • farmer contributions: US$34 domestic biogas plant (6m3 capacity) million (US$400/unit, 50 per cent is Birr 13,000 (US$765). Investment of plant investment)
Table 2. The National Biogas Program of Ethiopia: opportunities, risks and challenges
Opportunities Risks and challenges Financing • Increasing incomes and purchasing • Relatively high investment requirements. capacity in rural areas. • Significant inflation of costs; system cost • Access to credit from micro-finance banks. has increased by 40% since the launch of the program. • Potential viability for carbon financing. • Availability of co-financing after present supports are withdrawn. Economic • Increased access to energy. • Significant investment for farmers. • Increased application of labour for income augmentation. • Increased access to natural fertilizer. • Increased availability of livestock feed from crop residue (which were partly used as fuel). Environmental • Reduction in the non-sustainable harvest of • Health risks due to handling of animal and trees for fuel. human waste. • Removal of smoke from the home. • Potentially increased exposure to mosquitoes. • CO2 emission reduction. Social • More time for social networking. Technical • Trained technicians for promotion and • Availability of adequately trained installation of systems. technicians at the district level. • Continued availability of service in the mid and long term. Institutional • Decentralized political and economic • Availability of district level capacity to administration. manage projects. 2.2 Humbo Natural supply (Project Design Document, practices, removal of greenhouse 2009); due to severe soil degradation gas, reduction in soil erosion and Regeneration Project agricultural productivity fell by flooding, and provision of income 70 per cent (World Bank); and stream through sustainable Background: the natural forest was so highly management of forest resources. Humbo is located in the Southern degraded that it hardly provided The project aims to regenerate Regional State of Ethiopia in the enough firewood for local 2,728 hectares of degraded natural Great Rift Valley about 420km communities. The natural forest has forests. A carbon financing element from Addis Ababa. The Southern been denuded and anthropogenic through CDM is also attached to it. Region, in general, is the most pressures prohibited natural densely populated region in regeneration. The situation was Technologies: Ethiopia. With a population of so severe that an estimated 85 per Farmer Managed Natural about 50,000, Humbo is one of the cent of people living in the Humbo Regeneration (FMNR) technique, most densely populated rural areas area lived in poverty prior to the the planting of seedlings and in the Southern Regional State. reforestation project. traditional good practices in forest Due to high population pressure management, comprises methods and lack of responsible ownership, The Humbo Natural Regeneration Project aims at the regeneration that have been employed for the the natural resources in Humbo regeneration of the natural forest in have been continuously degrading of 2,728 hectares of degraded natural forest in Humbo. The project areas (Project PDD, 2009). since the early 1970s – mainly due FMNR is a participatory and low- to unsustainable cutting of trees project affects a total number of about 50,000 people in seven cost forest management practice for firewood, charcoal making and that brings results in a short time. construction, and over grazing. communities surrounding the forest. The project was started in With FMNR method, communities A Participatory Rural Appraisal of 2006. Carbon credit through the are able to harvest firewood and communities in Humbo indicated Clean Development Mechanism fodder within a year of project time; that the natural forest in the area (CDM) for sequestration of carbon and wild fruits and other non-timber was intact, and was a shelter for is incorporated to the project to forest products (such as apiculture) wildlife and a source of livelihood stimulate local communities. The within three years (Brown et al, for communities (World Vision project was initiated by World 2010). FMNR method has been Ethiopia, 2008). Due to high Vision Ethiopia and implemented developed in West Africa for over 20 population density and increasing with full participation of local years. It is a scalable and replicable demand for firewood, the forest communities. The benefit from CDM technique where agro forestry is has been grossly harvested beyond is to increase the incomes of local used for environmental restoration the sustainable supply of biomass. communities as a component of a and income generation. FMNR Additionally, with a decline in rural development strategy. The real technique has also been spread to agricultural productivity, caused by benefit, though, is the regeneration many other African countries. rainfall variability and environmental of biodiversity, poverty alleviation For the Humbo natural regeneration degradation, part of the forest was and establishment of sustainable project, communities are organized converted into farmland to meet the livelihood where communities in seven cooperatives. With growing demand for food. Studies manage their natural resources and user rights granted to them, the indicated that the loss of wood from obtain social and economic benefits. communities developed a sense of forests due to over exploitation of project ownership and have been the resources base for firewood is To ensure sequestration of carbon and benefits from CDM credits, the motivated for more sustainable several times greater than that due management of their common land. to forest clearing for agricultural project is designed to work with the expansion in the Southern Region.9 whole community and ensure that To minimize potential pilferage in In Humbo, such over utilization and there are significant local benefits the form of fuelwood collection, over dependence has turned the apart from the CDM ones. the project established a fuelwood dense natural forest into a barren plantation site within the project land with only a few clusters of Project objective: area that will supply the cooking bushes. Absence of user rights and The goal of the Humbo natural energy needs of the communities. appropriate legislation exacerbated regeneration project is poverty Additionally, the project recently the degradation of the natural forest. reduction, through the rehabilitation involved the Rural Technology and of the degraded natural environment Promotion Centre in the area for The deforestation around Humbo to restore the local agro-ecosystem dissemination of improved biomass was so severe that it threatened the on which the livelihoods of the cook stoves in Humbo communities. livelihood of over 60,000 people local communities depend. Main The project will also establish living in and around the project objectives of the project include the plantation sites in non-forested area. It degraded the quantity and revival of biodiversity, enhancement areas in the project boundary quality of ground water, which is of firewood supply through for the supply of wood for the source of their potable water sustainable forest management construction purposes. Development benefits and impacts: e) The project generates income for carbon in the forest in the project The regeneration project has communities through sustainable period. CDM crediting period is brought multifaceted benefits to the harvesting of both timber and for 30 years from 1 December local and global environment, and non-timber products. The 2006 to 30 November 2036. local communities. project area is expected to be harvested at 12, 22 and 31 years, a) Regeneration of the natural Opportunities and risks: maintaining only 50 per cent of resource base has helped The opportunities and challenges standing biomass for the benefits the recovery of biodiversity. for wider replication of this type of of biodiversity and environmental Migratory species such as project are summarized as follows: protection. Revenues from sales birds and other small wildlife of timber products supplement started living in the forest. Type of investment needed: incomes of communities around The local ecosystem has been Pre-project expenses for the Humbo forests. Sales of non-timber re-established. Groundwater project were covered by World products, such as honey and recharge has improved since the Vision Ethiopia and World Vision fruits, generate continuous start of the project.10 Australia. Project management will income for households. be financed by revenue from sale b) Regeneration of vegetation is f) The project creates a long-term of CERs. A wider replication of this reducing the level of solid erosion employment opportunity for type of project can be supported from the project area. The World those employed in the planting, by a leapfrog fund, which can be Bank study indicated that the tending and protection of the used to cover the pre-project costs; project area was losing between forest management. income from CERs can be used for 4 and 10 tonnes of topsoil per project management activities. hectare per year due to erosion. g) The project has a technology This has improved the water transfer and capacity building Other types of support to the supply system for communities component, where members of project: around the natural forest. the communities will be trained Scale-up of this project will require in livestock rearing, sustainable c) There is an enhanced supply the full engagement of regional forest management, agro- of firewood for cooking. The and district Bureaus of Agriculture. forestry, improved agricultural project established a plantation Technical and institutional building practices, eco-tourism, forest-fire site (outside the natural forest at the regional and district levels will management, community conflict but within the project area) be required. resolution, fodder development primarily for sustainable supply and others through the network of firewood to meet the cooking of the seven community energy demand of communities 2.3 Solar energy for rural cooperatives. The project also around Humbo. Additional supply anticipates introduction of electrification of firewood also comes from alternative energy technologies the removal of branches and to communities. Background: twigs as a result of thinning and Energy costs for rural households pruning activities in the protected h) Communities expect US$726,000 are considerable with 9 per cent natural forest areas. Studies have from the World Bank for the sales of their income spent on energy established that the pre-project of part of the Certified Emission for cooking, lighting and dry cell supply of firewood from the Reduction (CER) within 10 years. batteries. The quality of services forest was 4.3 tonnes of firewood Communities have already they obtain for this expense is per hectare per year; harvest of obtained the first payment from totally inadequate and fraught with firewood from the same area sales of CER. By the end of this many undesirable health and other (from pruning) one year after year they will get the second impacts. The quality of light from project implementation was 5.1 payment. Funds are mainly used kerosene lamps (and wood fires) tonne per hectare. As the forest for forest management practices. is insufficient to undertake any grows, yield as deadwood and With part of the fund from CER activity that requires close attention, litter will also increase, enhancing sales, communities established such as reading, and may cause supply of firewood; periodical credit schemes in which members serious damage to health if used harvesting of timber from the of the communities access for extended periods. Exposure to forest will also leave abundant income-generating activities such smoke from kerosene lamps and supply of firewood. as livestock rearing, poultry, etc. from wood fires contributes to The fund from the CER will also d) Communities are allowed to respiratory and eye diseases. be used for local capacity building harvest fodder from the forest activities. The Solar Energy Foundation (SEF) area. This has increased the developed a concept of providing supply of fodder for animals i) The project is expected to Solar Home Systems (SHS) to compared to the pre-project mitigate 850,000 tons of carbon meet the lighting and audio-visual period. dioxide by sequestration of requirements of households in rural residing in local communities have people (essential to increase areas. The concept was based on been able to address easily. productivity and incomes). the realization that Ethiopia has A real choice of the people! The h) The project has trained excellent solar energy resources (5 people of Rema, the first rural and opened employment to 6kWh/m2/day) and the SHS are village to be electrified with solar opportunities for local people. scalable to meet any size of demand. systems, chose solar systems over SEF piloted the concept in one i) Micro businesses in the village a diesel generator. They had the village, called Rema, in 2008 and has can now extend their operating choice to install a diesel generator since replicated the model in four hours, thus increasing their promised to be provided by an NGO other villages in different parts of incomes. but chose solar energy after visiting Ethiopia. a nearby village that had been provided with solar systems earlier. Opportunities and risks: Project objectives: There are 67 million people in 14 The mission of SEF-Ethiopia is million households in rural Ethiopia Development benefits and to provide alternative means of (2010). This number will grow to electrification to rural communities. impacts: 87 million people in 18 million The projects have provided The goal of the project is to households by 2020. Traditional considerable social, environmental contribute to sustainable rural rural electrification programs cannot and economic benefits to the development by providing services be expected to address more than communities involved. The main through solar systems. The SEF half this population in ten years, benefits and impacts have been the also seeks to build capacity for local i.e., 9 to 10 million households by following: production and management of 2020. This leaves at least 8 million solar energy systems. a) The solar systems have increased households who will not be served opportunities for education with electricity by 2020. The off-grid The five projects implemented for children and information market is therefore huge in Ethiopia. so far have provided electricity to for adults. Children now have 3,740 homes and businesses and Solar electricity is financially now adequate light to read and adults improved water supply and health competitive with existing lighting can now go to literacy classes in services to more than 10,000 people. (and audio-visual) alternatives the evenings. Families now have The first solar village became in rural Ethiopia. The financial reliable energy to power their operational in 2008; there are now competitiveness is improving due radios and have improved their four other solar villages around the to considerable reduction in supply access to information. country. The plan is to increase the costs (product and dissemination solar villages to 50 and users to b) Families now spend more time costs). The market that can be 50,000 by 2013. together working and in leisure. addressed with solar home systems is more than five million c) Smoke and fire hazards from Technologies: households. The government has kerosene lamps have been SEF projects disseminate SHS in made plans to promote SHS into eliminated. This has removed capacities ranging from 1Wp to three million households by 2015 the threat of chronic respiratory 60Wp. The most common system (MWE, 2010). and eye diseases from smoke, has a 10Wp PV module, an 18Ah and loss of life and property maintenance-free rechargeable Types of investment needed: from fires. Solar systems have battery, a charge controller, and The solar home systems improved the extent and quality up to four LED lamps. This system disseminated by the SEF range from of service from local health posts. provides four-hour lighting every 1Wp to 60Wp. The most common evening and enough power to d) The solar systems have improved system is a 10Wp system that operate a radio and a mobile water supply to the village; costs Birr 3.000 (US$175); smaller charger. The system replaces two water is now available within the systems cost proportionally lower. kerosene lamps, dry cell batteries village (using solar water pumps) Households in SEF projects are required to run a radio (two whereas it used to be transported provided with the SHS freely and batteries a month), and adds a new on foot (involving a two hour walk pay only US$1 per month to cover and now important capability to each way). the cost of maintenance, service and charge mobile phones. replacement of parts. e) A total of 650tCO2e/y emissions System components are robust and have been removed (Rema village The average investment required durable: the PV module and charge only). per system, excluding program controller last more than ten years, support costs, is US$175 (for a f) Local pollution from disposal the battery lasts five years, and the 10Wp system). The total investment of dry cell batteries has been LED lamps for 8,000 hours or more. required to provide for 200 avoided. Few and minor problems have been households in a rural village is faced so far, which technicians g) Extended hours of work for US$45,000 (US$35,000 system, Table 3. Solar energy in Ethiopia: opportunities, risks and challenges
Opportunities Risks and challenges Financing • Opportunities for carbon financing. • Taxes and duties on PV equipment. • Uncertainty of electrification progress with the power company (to select off-grid areas for projects). • Rising inflation, increased prices. • Financing to scale-up project into thousands of rural villages. Economic • Improved access to energy. • Investment requirement may be too high for the poor. • Improved business opportunities.
Environmental • CO2 emission mitigation. • Removal of smoke from the home. Social • Health benefits of potable water supply and power from health posts. • Increased opportunities for learning. • Reduced travel and water-carrying burden for women. Technical • Growing technical capacity for installation • Willingness of technicians to be stationed and service. and work in rural areas. Institutional • Working/successful private-public • Replication of PPP to a large number of partnership in current projects. districts.
US$10,000 project support). A must have the technical and leapfrog fund can finance the full business capability to sustainably project support cost and half of run the systems. the investment on the system; the • Institutional support to Regional other half of the investment on the Bureaus of Energy: to promote system will be paid by users. User solar electrification within contributions may be financed by their region; to help link user rural micro-finance banks (which are communities with micro-finance now providing credit for domestic banks. biogas plants, and can extend services for solar electrification). • Institutional support to district Users can repay their loans from bureaus: to provide technical their savings on kerosene and backstopping and administrative batteries. support to user communities. • User community support: capacity Other types of support to the building for local technicians and project: business managers. Scale up of this project to more rural villages in Ethiopia will require capacity building at the regional, district (Wereda), and user community levels. Regional government offices (Bureaus of Energy) will promote this model of rural electrification to districts in their region; district- level government offices can provide support services to user communities; user communities 3. Leapfrog fund potential
forest management projects have to support owner investment in a 3.1 Applications and the following financing structure: mix of grants and loans channelled beneficiaries through local micro-finance banks. • The Rural Improved Cooking Leapfrog funds are better used Stove Program (Ministry of Water where they will bring large low- and Energy). This project covers 3.3 Need for carbon and poverty reduction finance for production workshops impact. They should be used on for rural stove producers. Finance complementary support projects that are in line with current is provided to producers through In addition to investment support, policies and on projects that scale- micro-finance banks. Improved the leapfrog fund could be used up practices that have proven stoves are sold to users at to improve the effectiveness of successful locally. These criteria market price. institutions engaged in research put projects that focus on the and development, promotion and • The National Biogas Program household and community levels implementation. Projects can only (Ministry of Water and Energy). as the top priority, compared to be scaled-up if institutions can Domestic biodigesters are large infrastructure projects. In the provide effective and sustained financed by a combination of Ethiopian context such projects will support. Institutional capacity user contributions and grants include: building is required in the chain of from government and donors. activities ranging from research to Household level: household energy Investment in biodigesters is implementation. Specific areas for efficiency, promotion of domestic covered by owners (40 per cent) the leapfrog fund include: biodigesters, rural electrification and government grants (60 per through solar systems. cent). Micro-finance banks provide • Support for program Community level: forest half financing for half of owners’ implementation for government regeneration, micro hydropower, contributions. and non-government agencies, both at the central and district wind water pumping, renewable • The Humbo Natural Forest levels. Support is required for energy for community services Regeneration Project (World capacity building in the areas of (water supply, health centres and Vision, an NGO). Pre-project costs strategy development, program schools). were covered by World Vision. design, promotion, information, Carbon finance through the CDM These actions will increase access and program monitoring and is expected to generate revenue to to energy and promote sustainable evaluation. management of local resources. cover recurrent costs. Support to renewable energy and They mainly address the rural poor • The Rural Electrification Fund • forestry research and technology who are under-served by energy (REF, Ministry of Water and transfer. The local component for and other services. They are priority Energy). Solar electric systems renewable energy is very low in actions for the government: it has for homes, health centres and Ethiopia: solar, small hydro, and stated its intention to promote these schools are provided by the wind energy conversion systems widely (GTP, 2010). Several of these project. The project has been are mostly imported; capacity actions can also be integrated to partly funded by World Bank and to design, install and service increase impact. For example, the GEF grants and loans. Users form relatively larger systems (such as three case study projects discussed electric service cooperatives, small hydropower) is limited. The in the previous section can be part and receive finance to cover their leapfrog fund could be used to of a larger project that promotes system and installation costs. support renewable energy system energy access with local resource Finance is administered from the design, adaptation and service management. REF to the ESCOs through a trust centres in selected universities administrator (Development Bank and development agencies. of Ethiopia). 3.2 Types and roles of Technical and business capacity The essential elements of these • development for private financing mechanisms projects are: (a) investment companies working in the areas The major decentralised renewable support is provided to owners and of renewable energy. Private energy dissemination projects distributors, (b) owners’ share of companies are key for large scale being implemented in Ethiopia investment is financed by micro deployment of renewables: they utilize a combination of user equity, finance and development banks, are the link between program government and donor grants. and (c) recurring costs could be implementers and users; they Micro-finance banks are providing financed through carbon financing. are vital not only for producing finance to cover user equity. Four of The leapfrog fund is best applied the largest renewable energy and and supplying systems but also for market development renewable energy products and large potential market for them in for renewables. Technical services. Because the renewable its large population with growing and business development energy market in Ethiopia is still incomes. Renewable energy capacity of private companies small, effective business chains development is growing but still will help accelerate scale-up for have not been formed, and the only a small fraction of the potential renewables. financial and technical capacity is realized. The main barriers for of companies is also limited. The large scale adoption of renewable • Support to private sector leapfrog fund can be used to finance energy in Ethiopia are the relatively renewable energy companies start-up capital for businesses, high investment requirement and through their renewable energy help build sustainable value chains the limited capacity in institutions. associations. These associations for renewable energy, build the will be used to promote local The low-carbon leapfrog fund could technical and business capacity of private industry, provide be used to scale-up renewable private companies, and support renewable energy information, energy and forest management renewable energy associations. compliance to quality of products programs in Ethiopia. The main and services. areas where such a fund will have 3.5 Conclusion major impacts and benefits will be in dissemination of decentralized Ethiopia depends on a limited 3.4 Role of the private renewables and forest management, range of sources to meet its energy which meet the main challenges sector and PPP requirements. It depends on biomass of access and sustainability in the The major renewable energy energy for more than ninety per energy sector. programs being implemented in cent of its energy supply. The power Ethiopia are examples of public and sector is completely dominated Potential programs at the private partnerships: by large hydropower systems. household level: household energy Transport is exclusively based on efficiency, promotion of domestic In the National Biogas Program the imported petroleum and the medium biodigesters, rural electrification role of the private sector includes and large scale manufacturing through solar systems. promotion of the program, user sector relies heavily on imported identification, system installation Potential programs at the solid and liquid fossil fuels. and service. The private sector community level: forest also imports and produces The Ethiopian economy is growing regeneration, micro hydropower, components of the biogas system rapidly from a very low base; wind water pumping, renewable (stoves and lamps). The program Ethiopia requires growing energy to energy for community services is implemented by national and sustain this growth and provide for (water supply, health centres and regional program coordination basic services. Energy access and schools). offices supported by the its sustainable and secure supply These projects will mainly benefit government. are, therefore, major concerns for the rural poor who are the least Ethiopia: a large proportion of the In the rural improved cooking stove served with energy and other population, particularly in rural program, stoves are distributed services. Some of the above areas, does not have access to through mainly women-owned projects can also be integrated to electricity and sustainable energy micro enterprises that promote their maximize impacts and benefits. for activities such as cooking; products. The program supports the Scaling-up these programs will limited diversity in its energy supply micro enterprises through technical require that the main barriers structure exposes it to significant and business training and by in investment and capacity risks of sustainability and access.11 providing start up financing. development be addressed. The Energy demand in Ethiopia is low-carbon leapfrog fund can thus In the off-grid Rural Electrification expected to grow faster than the be used to finance investment by program private companies provide economy. The conventional route users, communities, and private installation and service for solar of development for the energy sector renewable energy promoters. systems provided to ESCOs; private sector will increase greenhouse The fund can also be used to companies can also take loans from gas emissions and amplify the risks develop implementation capacity the REF to service ESCOs. outlined above. Emissions from in the public sector and in private The lesson from these and other Ethiopia will become significant companies. projects is that the private sector in the coming twenty years as the is critical for scaling-up renewable economy becomes more carbon energy programs: private intensive due to very rapid growth businesses, ranging from women- in manufacturing, infrastructure and run micro enterprises in rural areas transport. to medium scale businesses in the Ethiopia has a diverse range of capital, promote renewables, help renewable resources and it has a develop the market, and provide Endnotes References 1 The rate of growth was 12% annually; Case study summary: Solar Energy Project Design Document, Humbo Ethiopia however, there have been frequent Foundation (SEF), Ethiopia, Ashden Awards Assisted Regeneration Project, 2009 and substantial power cuts during the Case Study, 2009 Report on the feasibility study of a national period. Bird, Neil, Frieden, Dorian and Zanchi, programme for domestic biogas in 2 This excludes emission from non- Giuliana, A Methodology for Assessment of Ethiopia, SNV Ethiopia, 2006 renewable biomass. Inclusion of the Fraction of Non-Renewable Woodfuel Africa on the Move, Africa Region non-renewable biomass will increase Consumption Application to National and Sustainable Development Department the share the energy sector from total State Level in Ethiopia, 2009 publication, World Bank, Seed for Green emissions to 60% or more. Breyer, Ch et al, Electrifying the Poor: Growth, Humbo Reforestation Project, 3 The target regional states are Oromiya, Highly Economic Off-Grid PV Systems http://wbcarbonfinance.org/docs/FINAL_ Amhara, Southern Nations, Nationalities in Ethiopia – a basis for sustainable rural STORY_green-growth-humbo.pdf and Peoples’ and Tigray. development, 24th European Photovoltaic Survey of Energy Resources 2007, World Solar Energy Conference. 2010. 4 Biomass fuels used for residential Energy Council, 2007 cooking in Ethiopia include wood, Brown, Douglas R, et al, Poverty Alleviation PRA Report,.Humbo Community Managed charcoal, crop residues and livestock and Environmental Restoration Using the Natural Regeneration Project, World Vision dung. Clean Development Mechanism: a case Ethiopia, 2008 study from Humbo, Ethiopia, 2010 5 Injera is the local bread in Ethiopia and it consumes about half of the total Revised report on the 1995/96 Household amount of energy used for cooking in Income, Consumption and Expenditure households. Survey, Central Statistical Agency (CSA), 1998 6 Bricks are very expensive in Ethiopia: one brick (dimensions of Household Income, Consumption and 200x100x50mm) costs Birr 2 (US$ 0.12). Expenditure Survey 2004/5, Volume I, Analytical Report, Central Statistical 7 The non-sustainable fraction of biomass Agency (CSA), 2007 for Ethiopia is estimated at 86% (Bird, Neil, et al, 2009). Holland, Ray et al, Decentralized Rural Electrification: the critical success factors, 8 Terms from micro-finance banks for ITDG, 2000. the biodigester loans are 16% annual interest for 2 years. A National Strategic Plan for the Biomass Sector, Woody Biomass Inventory and 9 Wood loss, due to non-sustainable Strategic Planning Project, Ministry of harvest of firewood from forests Agriculture and Rural Development, in Southern Region for 2010, was February 2005 estimated to be 26 times more than wood loss due to clearing of forest The Growth and Transformation Plan, 2011- for agricultural expansion (Ministry of 2015, Ministry of Finance and Economic Agriculture and Rural Development, Development (MOFED), 2010 2005). Strategic Plan for the Period 2006-2010, 10 Communication with Mr Assefa Tufa, Ministry of Mines and Energy, 2007 Head of the Humbo Regeneration Strategic Plan for the Period 2011-2015, Project at World Vision Ethiopia. Ministry of Water and Energy, 2010 11 The risks are to climate variability Brief Project Profile, National Biogas for bioenergy and hydropower, and Programme Ethiopia, 2007. international politics and economics for fossil-fuel imports.
christianaid.org.uk christianaid.ie UK registered charity number 1105851 Company number 5171525 Scotland charity number SC039150 Northern Ireland charity number XR94639 Company number NI059154 Republic of Ireland charity number CHY 6998 Company number 426928 The Christian Aid name and logo are trademarks of Christian Aid Poverty Over is a trademark of Christian Aid © Christian Aid November 2011 12-354-B