Segments de marché

Ethiopia is aiming for 100% electrification by 2025. Details for how this will be achieved are laid out in the National Electrification Plan 2.0 which stipulates that 35% of un-electrified households will be served with off-grid solutions, of which 16% will be served by mini-grids. Government initiatives are already underway, with a dedicated mini-grid support unit and plans are in place to commission 550 mini-grids between Ethiopian Electric Power (EEP) and the Ministry of Water, Irrigation and Electricity (MoWIE). These efforts are a stopgap ahead of a target of 96% on-grid electrification by 2030.

Private sector involvement in mini-grid service provision has been minimal to date. This is shifting however with the Universal Energy Access Program making provision for IPPs, a new tariff calculator for mini-grids under development (as of May 2020) and a recent call inviting proposals for 25 sites as part of a larger effort to implement approximately 300 private mini-grids.

Private companies active in Ethiopia include Beshah International Solar & Information Technology, Ethio Resource Group, General Electric, GFM Fotovoltaica and Solar Tech.

The Energy Proclamation No. 810/2013 (as amended through Proclamation No. 1085/2018) specifies the provisions and competencies relating to electricity generation, transmission and distribution. It states that all companies operating in the electricity sector must apply for licence and specifies the obligations of licencees. Companies must also apply for a certificate of competency.
The Council of Ministers Energy Regulation No. 447/2019 outlines the application procedures and requirements for generation, transmission, and distribution/sale licences, as well as certificates of competency. It also elaborates on the regulator's evaluation criteria pertaining to grid- and off-grid tariffs and grid access. The pricing procedure for small and very small self-contained systems (No 2/2005) stipulates the pricing procedures for isolated systems smaller than 500 kW. Note that these procedures were issued in accordance with the Electricity Operation Regulations No. 49/1999, which were repealed and replaced by the Council of Ministers Energy Regulation No. 447/2019. It thus seems likely that this piece of regulation is no longer in force. Public Private Partnership Proclamation Nr. 1076/2018 specifies that PPP contracts are subject to the approval of the PPP board, consisting of a variety of ministries. The proclamation sets out additional procedures for PPP contracts. It is envisaged that relevant policies and decrees will follow, and that future renewable energy projects will be procured under a PPP model. Investment Promotion 769/2012 reiterates compliance with Ethiopian environmental protection laws. Ethiopia National Electricity Transmission and Distribution Grid Codes, 2018 stipulates the rules and requirements for grid connection of electrical power systems and grid operational guidelines. These are however still in draft form.

Ethiopia boasts one of the largest off-grid solar markets in sub-Saharan Africa. Between 2010 and 2015, 2 million solar systems have been distributed by the government as part of the first phase of the Growth and Transformation Plan. More recently, the sector has experienced significant growth. In 2019, 1,011,537 solar home systems and pico-solar products were sold by companies affiliated with GOGLA and Lighting Global in Ethiopia, up from only 485,824 in 2018. In 2019, only 11% of these products were sold on a PAYGO basis, down from 16% in 2018. The remaining share of products was bought with cash. A large number of companies have set up operations in Ethiopia. These include ACME Engineering & Trading, Azuri Technologies, d.light, Fosera, Greenlight Planet, Green Scene Energy, HelloSolar, Little Sun, Lydetco (distributes SunKing/Greenlight Planet), Mobisol, Niwa Solar, Solar Development (distributes Fosera, Little Sun & Omnivoltaic), Solar Tech Renewable Energy, Sun Transfer Tech and Vera International Business (distributes d.light and Mobisol).

Looking to the future, despite almost the entire population envisaged to become grid connected by 2030, there is a large market that can be served by SHS and solar lanterns in the interim. According to the NEP 2.0, six million households will be electrified by 2025, seven million by 2030 and 450,000 will never be electrified with the grid.

The Energy Proclamation No. 810/2013 (as amended through Proclamation No. 1085/2018) specifies the provisions and competencies relating to electricity generation, transmission and distribution. It states that all companies operating in the electricity sector must apply for a licence and specifies the obligations of licencees. Companies must also apply for a certificate of competency. The Council of Ministers Energy Regulation No. 447/2019 outlines the application procedures and requirements for generation, transmission, and distribution/sale licences, as well as certificates of competency. It also elaborates on the regulator's evaluation criteria pertaining to grid- and off-grid tariffs and grid access. Pricing procedure for small and very small self-contained systems (No 2/2005) stipulates the pricing procedures for isolated systems smaller than 500 kW. Note that these procedures were issued in accordance with the Electricity Operation Regulations No. 49/1999, which were repealed and replaced by the Council of Ministers Energy Regulation No. 447/2019. It seems likely that this piece of regulation is not applicable anymore.

The captive power market in Ethiopia mainly consists of cogeneration plants of sugarcane producers and rooftop solar projects in residential and commercial sectors. Operational cogeneration plants include the Finchaa Sugar 31 MW bagasse plant (with 10 MW being fed into the grid), Metehara 9 MW and Wonji-Shoa 31 MW (with 20 MW being fed into the grid).

Operational companies in the solar captive power market include ACME Engineering & Trading, Green Scene Energy, GridX Africa, Lydetco, Solar Tech Renewable Energy, Sun Transfer Tech and Vera International Business. Ethiopia shows strong potential for captive power systems, especially in the industrial and agricultural sectors. While consumers might not be immediately incentivised to opt for captive power systems because of exceptionally low grid tariffs, security of supply has become a concern since power rationing occured in 2019. This could increase the value proposition of captive power systems in the country.

The Energy Proclamation No. 810/2013 (as amended through Proclamation No. 1085/2018) specifies the provisions and competencies relating to electricity generation, transmission and distribution. It states that all companies operating in the electricity sector must apply for a licence and specifies the obligations of licencees. Companies must also apply for a certificate of competency. The Council of Ministers Energy Regulation No. 447/2019 outlines the application procedures and requirements for generation, transmission, and distribution/sale licences, as well as certificates of competency. It also elaborates on the regulator's evaluation criteria pertaining to grid- and off-grid tariffs and grid access. Pricing procedure for small and very small self-contained systems (No 2/2005) stipulates the pricing procedures for isolated systems smaller than 500 kW. Note that these procedures were issued in accordance with the Electricity Operation Regulations No. 49/1999, which were repealed and replaced by the Council of Ministers Energy Regulation No. 447/2019. It seems likely that this piece of regulation is no longer in force. Ethiopia National Electricity Transmission and Distribution Grid Codes, 2018 stipulates the rules and requirements for grid connection of electrical power systems and grid operational guidelines. These are however still in draft form. Investment Promotion 769/2012 reiterates compliance with Ethiopian environmental protection laws.

Only about 7% of the Ethiopian population have access to clean cooking solutions. More than 70% of the population rely on burning biomass or solid fuels on open fires or in inefficient stoves for cooking. 63% of households are estimated to use a three-stone stove as their primary cooking method. Wood is the dominant fuel source with 85% of the population using it for cooking. Other fuels consumed include dung (7%), charcoal (3%), kerosene (4%) and liquid petroleum gas (LPG) (0.1%).

The Ethiopian government has set a target to distribute about 11.5 million improved cookstoves by the end of 2020. It has a number of clean cooking policies and strategies in place. The Biomass Energy Strategy of Ethiopia of 2013 (BEST) was developed to ensure sustainable use of biomass energy and improve access to sustainable and affordable biomass energy for all by 2030. Another policy in place is the National Improved Cook Stoves Investment Plan of 2013. In terms of biogas, the government's 10-year National Biogas Programme closed in May 2019. The programme successfully distributed 20,699 bio-digesters. Concurrently, the government, in partnership with development organisations, is also running the 5-year Biogas Dissemination Scale-Up Programme, with the target to disseminate 36,000 domestic bio-digesters and 40 large bio-digesters by July 2022. By June 2019, the scale-up programme has already distributed 4,551 bio-digesters.

Organisations manufacturing, selling or distributing improved biomass cookstoves include Ethio Resource Group, Gogle, Potential Energy, SNV and WorldStove. Gaia Clean Energy is working with local private sector partners to scale up production of ethanol and distribution of ethanol cookstoves. Africa Briquet Factory produces environmentally-friendly briquettes for cooking. Finally, GM Clean Energy and (B)energy operate in the biogas market.