Ethiopia Looks to Tap Its Massive Renewable Energy Potential

Ethiopia possesses significant renewable energy potential, including hydroelectric, wind, solar, and geothermal sources, with the capacity to generate over 60,000 MW of electric power.
The country is investing in various renewable energy projects, including the Grand Ethiopian Renaissance Dam (GERD), wind farms, and geothermal plants, to enhance energy security and support economic growth.
While facing criticism from downstream countries over the GERD, Ethiopia is diversifying its renewable energy portfolio to meet growing demand and ensure sustainable development.

Ethiopia has been gradually developing its renewable energy potential in recent years, adding wind, solar, geothermal, and hydroelectric capacity. In the Horn of Africa, Ethiopia is home to abundant renewable energy sources, with the potential for massive green energy generation if supported by greater investment in the sector. However, the Ethiopian government has come under fire in recent years for the construction of the Grand Ethiopian Renaissance Dam (GERD), which could hinder neighbouring countries’ water sources.

Ethiopia has the potential to generate more than 60,000 MW of electric power from hydroelectric, wind, solar, and geothermal sources. It also has seven trillion cubic feet of proven natural gas reserves in its Ogaden Basin. Despite this strong potential, Ethiopia has struggled to tap into its natural energy sources due to a lack of investment. At present, it has 5,200 MW of installed generation capacity, which supplies electricity to less than 60 percent of the Ethiopian population. The government aims to increase this capacity to 17,000 MW within the next decade, but there are fears that demand may still outpace supply as both the economy and population continue to grow.

Around 90 percent of Ethiopia’s electricity generation comes from hydropower, with wind and thermal sources providing 8 percent and 2 percent respectively. To significantly enhance its hydropower capacity, the government has been constructing the $4-billion GERD for more than a decade, with a projected installed capacity of 5,150 MW. The enormous dam is expected to support not only energy security but also economic and industrial growth. In October, the government said it had finished the fourth and final phase of filling a reservoir for its GERD hydroelectric power plant, following years of delays after initial approval. In addition to the GERD, the government is also developing the Koysha Hydro Power dam by the Omo River. This will be the second-largest dam in Ethiopia, with an anticipated capacity of 2,170 MW.

The development of the GERD has been widely criticised by Egypt and Sudan, who are worried that it might reduce the flow of vital Nile River water supplies. Both countries are downstream from Ethiopia and are concerned the dam may prevent enough water from flowing towards them. Egypt suffers from severe water scarcity, relying heavily on the Nile, which provides around 97 percent of its supply. The Egyptian government deems the construction of GERD as an “illegal” and “unilateral” measure. In December, Egypt said that talks over GERD had failed after Ethiopia refused to come to an agreement to ensure the protection of Egypt and Sudan’s water supplies. Meanwhile, the Ethiopian government has repeatedly emphasised the need for GERD to support the country’s economic development and energy security.

In addition to its hydropower resources, Ethiopia is also developing its solar, wind, and geothermal capacity. The government aims to create a climate-resilient power network. In December, Ethiopia signed an agreement with the UAE’s AMEA Power to build a 300 MW, $600-million wind farm. The Aysha Wind Farm will be located on 18,000 acres of land and is expected to support the creation of 2,000 jobs during the construction and operational phases. This forms part of AMEA’s strategy to expand its renewable energy projects in Africa, the Middle East and other emerging markets. It adds to Ethiopia’s existing two wind farms in the Oromiya and Tigray regions and will be the country’s biggest.

There are also high hopes for Ethiopia’s geothermal potential, supporting aims for Africa’s geothermal capacity to overtake that of Europe by the end of the decade. There is a projected $35 billion in investment headed to Kenya and Ethiopia to develop the two countries’ geothermal resources in the East African Rift. At present, Africa produces just 1 GW of geothermal energy, which is half that of Europe. However, the project pipeline suggests that this figure will double or triple by 2030. Together, Kenya and Ethiopia are expected to contribute around 90 percent of a projected 13 GW in geothermal energy generation in Africa by 2050. In contrast, Europe is expected to produce around 5.5 GW by this time.

At present, geothermal energy is used to power Aluto Langano, just one of Ethiopia’s 22 power plants, producing around 7.3 MW of power. The government is aiming to develop 17 new geothermal projects to achieve 35,000 MW of installed capacity, to meet the national demand as well as for export.

Although Ethiopia does not currently produce enough electricity to meet the needs of its growing population, the government’s climate aims and several planned investments in a range of renewable energy sources are expected to help the country rapidly and significantly develop its green energy capacity. While the government of Ethiopia has attracted criticism from countries located downstream for the development of its mega-dam, it is not putting all its eggs in one basket, as it pursues several major wind, solar and geothermal projects, to help ensure its energy security and support economic development.

By Felicity Bradstock for Oilprice.com