In addition to pure economic analysis, we also need look at the long term impact of these investments on our energy security and our sovereign right to use our resources. We have to bear in mind that we are a landlocked country with the second largest population in Africa in a very troublesome neighbourhood. Furthermore oil is not going to get any cheaper and being self-sufficient in energy has to be part of national security strategy.
Reality Checks: Where are we now?
Many headlines about this issue are referring about “power blackout” and not having light in the living room every other day. That I believe is a minor inconvenience compared to the impact on the economy and livelihood of many people.
Power shortage in Ethiopia is creating lots of problem. Particularly heavy industries that cannot easily switch “on” and “off” their machineries, like cement, metal, tyre were closed for a month or more. A good example is a cement factory needs up to 16 hrs of heating to warm up its kiln to start production. Hence under the current one day on and the other day off arrangement, it would not be possible to operate a cement factory.
I do not know the detail but industries that are geared towards export to be given 24 hrs of power supply. May be it is possible to provide power to industrial estates in Akaki area or flower farmers because they are on the same route but companies that are in the wrong area cannot benefit from this provision.
Those industries deemed to be as non-essential like rock crashers have been told to switch off and go home. Even factories like printing that can easily switch “on” and “off” their machines were in trouble to keep with the demand by working 3 or 4 days a week. This has created a big financial pressure on many. Particularly companies with high debt level are struggling to keep up with re-payment and may be forced to file for bankruptcy. Government offices and service providers are also providing services three days out of five and half working days because computers, fax machines and the telephones need power.
Restaurants, Cafés and service industry are providing service in a shift. In one zone you can have hot drinks and the other cold drinks but when there is no power, the fridge too stops working. This problem exposes the consumers to health risk and you often get advised to have bottled drink than freshly squeezed juice. Pharmacies, medical centres, supper-markets that sell frozen foods or perishable goods have to either buy their own generator or compromise the quality of service. Above all, you would be surprising to learn how life is so dependent on electricity when you have to take the stairs to 9th floor.
Those are the main problems, of course, having no light in your living room creates some inconvenience but one can get used to the candle light.
The cause is clear; the demand has exceeded the supply. According to EEPCo, Ethiopia has a capacity to produce about 850 MW power from hydroelectric dams and diesel generators, which the EEPCo says fell short of the national peak demand by 200MW.
This is what you read on the newspapers but you feel sceptical for a simple reason that 25% shortfall in supply shouldn’t be a cause for 50% of the country to go without light.
Furthermore the demand is growing day by day. Large industries are being built all over the country. For instance there are at least 4 or 5 cement factories being built and many more are on the pipe line. There is also significant expansion of mining, metal, sugar and other industries that need big power supply. Urbanisation and small industries are also growing fast. All these will increase the demand and the gap between the demand and supply cannot be easily bridged.
Reasons for rationing
In all fairness, the government take credit for investing heavily in this sector and probably it will be its biggest legacy, but the execution as everyone admits now is late at least by 2 years. In fact, things could be intolerable if there is no light at the end of the tunnel in few months time.
I think the future looks bright. Tekeze is expected to produce about 300 MW and Gilgel Gibe II around 420 MW in few months time. A paper published by Stevenson & Mhiret Debebe (CEO of EEPCo) on May 11, 2009 on International Water Power and Dam Construction, states that Tekeze is complete and has 3.1 billion cubic meters of water reserve by the end of 2008 rainy season and it could have started generating power if it had another 1.2 billion cubic meters water. The paper also states that Tekeze’s dam reservoir has a capacity to hold 5.34 billion cubic meter of water. In layman’s term, the dam is half full and as a result many express their fear that it may not start this year as well. I agree these figures do mean nothing unless we know how much water we expect in the rainy season.
The same paper states that the mean annual inflow of water into the dam is about 3.75 billion cubic meters. That means even having half of the mean annual inflow could add 1.2bm3 water needed to start the Tekeze dam. (Hope we will have normal rainy season not only for power generation but also for the poor farmers who depend on the rainfall). So in terms of probability Tekeze will be operational by Sep-October/09 as the officials predicted.
We have been also told Gilgel Gibe II project is 95-98% completed and it is expected to start in a month or two. That is why I am a kind of optimistic to believe that next year is going to be brighter.
No doubt these two dams will satisfy existing and growing demand but I am not sure whether it will satisfy the demand for power from the ever growing industry, urbanisation, and government plans to export power to neighbouring countries. I think this is where 460 MW Belese project which is 75% complete and 1870 MW Gilgel Gibe III may be needed.
Do we really need all these power stations?
I think the answer is yes for the following reasons:
- Ethiopia has the lowest per capita electrical consumption in the world, around 30 kwh compared to Iceland 27,000 kwh which is the highest. Even neighbouring countries like Sudan has 81kwh and Kenya 124 kwh, which is 4 times more per capita consumption than Ethiopia.
- We have about 45 GW hydropower potential but we have only developed 2% of our potential and the next year 1.5 GW capacities will increase it to about 3.3%. It has a long way to go to make use of our resources long before down stream users make it impossible to use it.
- Still with this planed future development, we may have about 5GW power by 2017-2020. This will be 1/3 of current Egyptian power generation, which is around 16.6 GW. When we evaluate these figures, we need to put in perspective that Ethiopia contributes about 75 billion cubic meters of water out of 84 billion cubic meters that is getting into Aswan dam.
- Geo-political politics changes and if we can not develop our resources now, there is no guarantee that we may develop it in the future.
- These dams are also big water reservoirs for our country that is suffering from shortage of water. This water can be used for irrigation, fishing, recreation and drinking water for this and many generation to come. I do not have exact figures but collectively all these dams can retain many billions cubic metres of water that can be used for various agricultural developments.
So in simple terms the sooner we develop it, the better. But the bigger question is that whether we can afford it. The other equally important question would be whether they will let us do it.
Gilgel Gibe III and International Pressure
Gilgel Gibe III is very important for various reasons. First, we need the power as industrialisation picks from very low level. Without GG III, Belese and other projects, we may face the same problem in 4 or 5 years.
Second it is our resource and we need to assert our rights over our resources. If we give into external pressure, we can also kiss good bye to other more contentious projects Ethiopia needs to develop desperately. While googling for information, I came across a letter written by an organisation called River International that claim to be an environmental group. The organisation has written letter to JP Morgan Chase lobbying not to lend money to Ethiopia for this project.
The letter is not only full of distortions but also carries malicious yet subtle threats to JP Morgan Chase. It says Ethiopia’s demand is less than 600MW and does not need any more power station. As we all know that is not true. It says it is a misplaced interest for a country like Ethiopia to have a dam while the people are starving.
As we all know Electric power is the biggest invention that changes the productivity of human kind to alleviate poverty and improve the leaving standard and I do not know why River International thinks Ethiopia does not need power to tackle the famine itself. So GG III faces many challenges to become a reality. The government says it has already built 30% of the project and may need to go and do it with our money. Hope everyone who believes in our right to develop our resources would confront River International to produce the evidence or stop these patronising campaigns.
The fact that Gilgel Gibe IV appears to have secured financing from China is a big success. It is also indicative that China is not interested in funding GG III project which is being built by an Italian company.
Developing Ethiopian hydro-electric power is very important for national development, energy security, food production, and reducing deforestation. It may also help to reduce the negative trade balance by exporting electricity and reducing dependency on oil. The impact of electricity on industry, agriculture, mining, education, transportation, and health and food security is monumental. We are a landlocked country and oil is not going to get any cheaper. These dams are also huge water reservoirs and its impact on agriculture and fishing could help to break the cycle of famine.
VOA on Gilgel Gibe III