The case of microgrids in Tanzania (II / II)

In our last post, David has explained what microgrids are and the importance of its development in the upcoming years for providing electricity access to different communities (http://sustainability-by-education.org/?p=874). In this post, we will talk specifically about the case of microgrids in Tanzania, a country that I have been able to visit thanks to the support of the Center for Development Cooperation of the Polytechnic University of Catalonia (https://www.upc.edu/ccd).

A little bit of history

According to estimations from the International Energy Agency, only 12% of the population in Tanzania had access to electricity in 2005. Achieving universal energy access was a challenging task, as it is a very big country with low population density (it has almost the same population as Italy but it is almost three times bigger). As part of the energy access master plan, Tanzania decided to adopt in 2008 an innovative and ground-breaking mini-grid policy and regulatory framework that led to an amazing growth in the number of projects developed, becoming a regional leader on the subject. The introduction of promotion mechanisms such as feed-in tariffs, dollarization of incomes and reduction on the size of eligible projects proved successful. By 2016 the electricity access reached 33%, showing an impressive growth compared to the preceding figures and microgrids have certainly contributed to that. 

Current situation

Microgrids developed per technology

The last official report of 2017 recognized the existence of at least 109 microgrid’s projects with an installed capacity of 157,7 MW, serving 184.000 customers. However, the numbers are not exact as some projects were not registered and it is also likely that more microgrids were constructed in the past two years.  

Most of this projects are owned by the national utility TANESCO or private developers (examples of companies operating in the microgrid sector are: PowerGen, Husk Power Systems, Ruaha Energy, Zola, EnSol, Rafiki, JUMEME). However, there are some projects that are community-owned. This means that the village itself has the property of the project, takes care of its operation and decides the prices they would pay for the service. 

Although most of the initial projects were focused on small hydro, fossil fuels (diesel generators) and biomass, after the 2008 changes more wind and solar projects started to be built.

Specific projects

In the fieldwork activity carried out in the country I was able to visit 4 existing projects: the villages of Maseyu, Zombo, Malangali and Kibindu. All of them operate with solar panels and a bank of batteries. Zombo uses a diesel generator for supplying electricity when the batteries get discharged while Kibindu has a biomass gasifier complementing the grid. 

The main outcomes obtained after travelling were:

  • The access to electricity contributes strongly to the development of the communities, enabling Productive Uses of Energy (such as the installation of machines) that allows the growth of different economic activities.
  • The current consumption levels are a challenge for private developers as many of the customers consume an average of 850 Wh/day (compared to an average of 32000 Wh/day in the USA or )
  • There is a huge potential for biomass. Most of these villages were agricultural communities and there were available biomass residues that companies can get free of charge (today they are usually being burnt in the fields) and use as feedstock for generating electricity. Biomass technologies present certain challenges but there are numerous well-designed and operated examples around the world and I am confident that this experience can be replicated in Tanzania and other countries of Africa, giving good value to those wastes.
  • Most of the projects received supports in forms of grants, subsidies or low-interest loans from international cooperation organizations or the local administration and many private developers recognize that these funds are crucial for them in order to get to repay their investments. As the national grid is also highly subsidized, it makes sense that hey also receive collaboration on their investment projects.

Future perspectives

A new regulation has come into operation a few months ago trying to solve two aspects of the development of the microgrids that were found as potential drawbacks for its growth:

  • Tariff regulation: there is a huge variety of tariffs in the projects around the country and customers are exposed to these situations, with villages (not the ones we visited) that can pay up to 2 USD/kWh (in Europe, the range of electricity tariff is around 0,1 to 0,15 USD/kWh).
  • Grid extension: private developers need to deal with the risk of the national grid reaching the villages where they have developed the microgrid. The new regulation sets mechanisms in order to allow them to become generators for the national grid and reduce the uncertainty regarding this aspect.

Although the new regulation is still in the implementation phase, it could contribute to overcoming the current difficulties of the sector. Personally, I expect these initiatives to keep growing and I hope that the experiences of all these years of operation combined with technological and business-related innovations will lead to making energy access available to everyone!

Sebastián Zaera

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