Assessment of Opportunities and Challenges of Electricity Export (The Case of Ethio - Sudan)

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Date

2015-10

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Addis Ababa University

Abstract

This paper focuses on assessment of opportunities and challenges of electricity export - the case of Ethio-Sudan. As its focus is in electricity export to Sudan which is a newly emerging business area to Ethiopia, the study carried out different activities so as to collect primary and secondary data from different sources respectively through interviewing the designated officials of EEP and EEU and focal persons discussion along with working documents like power purchase agreement, Minutes of Understanding(MoU), Minutes of meeting in different times to negotiate and discuss on issues about the export, financial statements EEU for four years since its start is too short to take data beyond four years. Extensive literature survey was undertaken to underpin the opportunities and challenges regarding the export so that they can be synchronized with what is actually being experienced in the case under this study. The research has identified opportunities such as very competitive cost (tariff rate -5 against 13.18 USD cents in east African countries)by which the electricity revenue is to be aggressively increased, abundant resources and excess supply within, unsatisfied demand in neighboring country-Sudan. Moreover, the interconnection increases energy security and reliability, stability, peace and security along with the developing their national economy. On the other hand, the paper has outlined that electricity export is being challenged by unsatisfied domestic demand, inadequate generating capacity and reserve margin due to the huge infrastructural facilities it demands, lack of managerial skill for such activities. Moreover, the intangible social resettlement cost as well as lots of acres of land used for hydropower dam construction remained to be an opportunity cost for the exporting country- Ethiopia and an opportunity to Sudan. Finally, the research forwarded recommendations based on the findings of the study as follows; Since Ethiopia remains to be a net exporter of electricity to Sudan, it is better to insist on developing generating capacity, managerial skills to administer the contract, utilize the foreign and internal source of finances and aggressively engage in the export activity even with other neighbor countries like South Sudan, Kenya, Djibouti, Eritrea, and others so as to create a new capital in hard currency as major additions to GDP. Key words: Hydropower, Tariff, Electricity, Revenue, Megawatt hours, Energy, Transmission lines, Cross border, Substations, transformers, Financers, GDP.

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Keywords

Hydropower, Tariff, Electricity, Revenue, Megawatt hours, Energy, Transmission lines, Cross border, Substations, transformers, Financers, GDP

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