Decentralized power generation is high on the agenda in Tanzania, with the Rural Energy Agency (REA) pleading support for individuals or companies that intend to supply ‘mini-grid electricity’. This initiative is meant to help close Tanzania's 1,290MW power deficit and give more of its rural population access to electricity.
“Energy is an engine for development,” REA’s Project Identification Manager Elineema Mkumbo said, underlining the agency’s legal mandate to provide fund for such projects.
Tanzania aims to get most villages connected to the central electricity grid or advance decentralized power generation for remote rural areas. Development partners from Sweden, Germany and Norway, accompanied Mkumbo on visit to biogas producers and refiners in Simanjiro district.
Mini-grid electrification in rural areas enjoys special support the Swedish International Development Agency (SIDA) Programme. Initiatives have sprung up to help people to access energy through mini-grid extension.
Government aims to close power deficit
Tanzania is at the brink of an energy crisis. Ambitions are riding high, seemingly despite all odds, and the government stays optimistic it can close the 1,290 MW power deficit and achieve its goal of generating close to 2,800 MW by the end of this year.
At present, Tanzania can draw on 1,490 MW of installed capacity but the National Five-Year Development Plan, which ends this year, seeks to reach a target of 2,780 MW. Peak demand currently is only 900 MW, but many regions only sparsely electrified. At present, just 24% of Tanzania's 45 million population is connected to the power grid, but this is expected to rise to 30% by the end of next year.
To improve gas supplies to existing gas power plants, the government in mid-2015 freed up $1.2 billion (Tsh.2.4 trillion) that is partly used to build a gas pipeline from Mtwara to Dar es Salaam while the remainder goes towards the construction of a power plant at Kinyerezi in Dar es Salaam.
Payment is another issue: Independent power producers such as Sonagas have repeatedly called on the national grid operator TANESCO to settle outstanding debts and pay them on time for the provision of contracted electricity to the grid. Otherwise, Sonagas may opt to gradually suspend operations at its Ubungo power plant.
Technical experts at TANESCO warned of an imminent power crisis due to rising operational costs during the winter season. The state-owned utility is allegedly operating at a loss since domestic electricity tariffs were lowered as of February 2015, as it covers part of its oil and gas needs through costly imports.