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