EEP Tackles Electric Power Distribution Challenges

Ethiopia's Renewable Energy Potential and the Challenges of Distribution

Ethiopia is rich in renewable energy sources, including hydroelectric power, wind, geothermal, solar, and biomass. The country has long relied on hydropower for its energy needs, using it to support manufacturing, the service sector, and rural electrification. However, due to limited financial resources, technology, and skilled personnel, only hydropower has been effectively harnessed.

In recent years, there has been growing interest in exploring and utilizing other renewable sources such as wind, solar, and geothermal energy. Despite these efforts, more investment and development are needed to fully tap into these resources.

Electricity plays a crucial role in driving economic and social activities. It is not just about lighting homes but also transforming rural areas into thriving urban centers. It supports manufacturing, irrigation, and financial services, all of which depend heavily on a reliable power supply. Alongside energy production, efficient distribution is equally important.

Recent reports indicate that the Ethiopian Electric Power (EEP) exceeded its energy production targets in the last fiscal year. EEP generated 29,480 gigawatt hours of electricity using its 20 power plants, surpassing the planned 25,423 gigawatt hours. The Grand Ethiopian Renaissance Dam and Gibe III Power Plant contributed significantly to this output, accounting for 33.2% and 24.2%, respectively.

The company also reported substantial revenue from electricity sales, earning 75.4 billion Birr during the period. This increase was attributed to macroeconomic reforms that improved foreign exchange earnings, with EEP's foreign currency revenue rising from 140 million USD to 388 million USD.

Several projects are currently under construction or nearing completion. The Koysha hydro power plant is 71% complete, while the Ayisha Wind Farm is over 85% finished. Five transmission and distribution projects have already started operations. EEP aims to generate 38,124 gigawatt hours of power this fiscal year and earn 109 billion Birr in revenue.

Despite progress in generating capacity, the expansion of distribution networks has lagged. Melaku Taye, corporate communication director at the Ethiopian Utility, noted that while new power generation projects have been built, there is a lack of infrastructure to deliver electricity to households. This gap led to the formation of the Ethiopian Electric Utility (EEU), an independent entity focused on improving access and efficiency.

The EEU has three main objectives: decentralizing decision-making, outsourcing to address the growing demand for electricity, and modernizing internal structures. The institution has faced criticism for inefficiency and outdated systems, but recent efforts have aimed to improve service delivery.

Over the past year, the EEU has brought electricity to 81 new rural towns, constructing 9,800 kilometers of high-voltage lines and 789 kilometers of low-voltage lines. To combat resource wastage, the EEU has digitized all its assets, including poles, transformers, and substations.

Digital payment platforms have also gained traction, with 363,675 customers using online methods to pay their bills. These include bank branches, mobile banking, and other digital solutions. The EEU has introduced GPS-enabled devices to ensure accurate meter readings, addressing previous complaints about arbitrary billing.

To enhance customer service, the EEU has established call centers capable of handling 80 calls simultaneously. Previously reliant on Ethio-telecom, the utility now uses its own telecom lines for better efficiency.

The existing distribution network faces challenges due to aging infrastructure and overloading. However, improvements in outage frequency and restoration times have been observed. Planned interruptions are used to manage power distribution during outages.

Upgrading projects are underway in several cities, including Addis Ababa, Adama, Hawassa, Bahir Dar, and Jima. Similar initiatives are being implemented in Wolaita, Shashemene, Gondar, Harar, Debrebirhan, and Debremarkos. New projects are also being launched in towns within a 50-kilometer radius of Addis Ababa.

A new project office has been established to oversee upgrades in ten towns, following a successful study and securing USD 175 million in funding. Another study has been completed to begin network upgrades in 64 towns, focusing on regional capitals and smaller administrative units.

Given Ethiopia’s vast geography, expanding the distribution network is a significant challenge. Remote areas will need off-grid solutions, such as solar or wind systems. The EEU has already initiated off-grid projects in 12 rural towns and expanded to 29 additional locations last year. Areas like Kurile in the Somali region and others in Gambella, Bale, and Omorate are among the most remote.

Approximately 70% of electric infrastructure equipment is imported, prompting the EEU to encourage local suppliers to reduce foreign exchange costs. However, even local manufacturers require imports for essential components.

Efforts to improve electricity access continue, with a focus on both grid and off-grid solutions to meet the needs of Ethiopia’s growing population.