6/17/20151 United Republic of Tanzania Rural Energy Agency (REA) Lighting Rural Tanzania Competition (LRTC) Overview on Strategies for Improving Access.

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United Republic of TanzaniaRural Energy Agency

(REA)

Lighting Rural Tanzania Competition (LRTC)  

Overview on Strategies for Improving Access to Modern Energy Services in Rural Areas of Tanzania

 Cuthbert Z. M. Kimambo

Department of Mechanical and Industrial Engineering College of Engineering and Technology (CoET)

University of Dar es Salaam (UDSM)P. O. Box 35131, Dar es Salaam, Tanzania

Email: [email protected]

OUTLINE OF THE PRESENTATION

• Introduction Background Information Current Energy Situation Socio-Economic Situation of Tanzania An Overview of the Industrial Sector in Tanzania Technology and Innovation

• Policy and Legal Framework for Rural Energy in Tanzania• Present Scope of Renewable Energies Global Situation Initiative to Promote the Use of Renewable Energy in Tanzania

• Proposed Strategies for Improving Access to Modern Energy Services in Rural Areas of Tanzania

• Concluding Remarks04/18/23 2

Introduction

• Key challenge is to increase competitiveness while implementing ecologically friendly and socially acceptable development programmes.

• The objective is to encourage higher value addition activities while preserving the available natural resources through the development and application of innovative technologies.

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Introduction / Continued

• Economic development of modern societies is crucially dependent on energy.

• The way this energy is produced, supplied and consumed strongly affects the local and global environment and is therefore a key issue in the sustainable development.

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Current Energy Situation

• Industialization is hampered by inadequate availability of energy.

• Communication, health facilities, shelter and other basic needs are very much restrained, particularly in rural areas.

• The price of energy is another factor which makes it affordable or otherwise for the poorer sections of the community.

• Electricity supply in Tanzania consists of both interconnected and isolated systems.

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Current Energy Situation / Continued

• Generation options are based on hydro, natural gas, diesel/heavy fuel oil, coal, biomass, solar PV and wind.

• In the recent past there has been a shift from the over-reliance on hydro generated electricity, as it resulted into unreliability in the event of draughts.

• National energy demand is characterized by a low per capita consumption of commercial energy and a high dependence on non-commercial energies including firewood, charcoal and bio-waste to meet fundamental and basic needs.

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Current Energy Situation / Continued

• Vast majority of the population has low purchasing power and depends mainly on wood fuel for cooking and kerosene for lighting with detrimental effects on the environment (high deforestation rate) and health, particularly of women and children.

• Conventional options:Atomic energy,Hydropower andThermal energy (from coal, more recently natural

gas)04/18/23 704/18/23 7

Current Energy Situation / Continued

• Conventional options: Issues of concernUnresolved problems with the disposal of atomic

wasteOil crises - recent steep price

increases/fluctuations of crude oil adversely effecting particularly poorer countries

Growing concern for the adverse effects of fossil fuels/carbon emissions on climate change

• In the longer term, renewables must provide a large and eventually the dominant part of the world energy mix04/18/23 804/18/23 8

Current Energy Situation / Continued

• In Tanzania, 80-85% of communities are structurally excluded from access to minimal energy supply.

• Villages adjoining the main grid represent a very small fraction of the more than 8,000 villages and about 6 million rural households in the entire country.

• Highly isolated and dispersed population makes transmission, distribution and connection costs quite high and commercially unviable in the short-and medium term

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Current Energy Situation - The Way Forward

• Focus should be on off-grid, stand-alone renewable energy based power generation systems, whose cost is already competitive.

• The rationale is that rural electrification can be realized with off-grid, stand-alone systems.

• Relatively high up-front cost barrier to electrification by means of renewable energies

• Appropriate mechanisms have to be found to initially subsidize these investments in tandem, however, with the inculcation of a savings mentality/behaviour amongst the beneficiaries.

• Pro-active promotion and marketing - resulting into completely viable commercial chains 04/18/23 10

An Overview of the Industrial Sector in Tanzania

• SME are the emerging private sector and a base for private-sector-led growth.

• At present the sector is largely informal, under-performing and in need of considerable assistance to overcome entrenched disadvantages and barriers.

• Key weaknesses relate to technology, training, organization and management, information, marketing, and finance.

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Technology and Innovation

• An analysis of the Tanzanian Innovation System in its present form yields the following:

Rather weak and underdeveloped National Innovation System (NIS).

High degree of fragmentation, isolation and even competition instead of an institutionalized collaboration, partnership/networking and a culture in the sharing of information and knowledge..

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Policy and Legal Framework for Rural Energy

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• The Tanzania Development Vision 2025

• Sustainable Industrial Development Policy-SIDP (1996-2020)

• The National SME Development Policy (2003)

• The National Energy Policy (2003)

• The Electricity Act (2008)

The Tanzania Development Vision 2025

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• Defines the overall national development goal is ‘to attain sustainable human development’.

• In order to achieve sustainable development, ‘environmental protection must constitute an integral part of the development process’ (Principle 4 of AGENDA 21).

• ‘Eradicating poverty is an indispensible requirement for sustainable development’ (Principle 5 of AGENDA 21).

Sustainable Industrial Development Policy-SIDP (1996-2020)

• Recognizes the role of the private sector as the principle vehicle in carrying out direct investment in industry.

• Accords specific emphasis to the promotion of SME, encouraging informal sector businesses to grow and formalise.

• Measures to enable indigenous entrepreneurs, including women, youth and other disadvantaged groups, to take part in economic activities.04/18/23 15

The National SME Development Policy (2003)

• Aims to create an enabling business environment as well as to strengthen and network institutions that can address the constraints and at the same time seize the opportunities that determine the growth and the standard of performance of the SME sector.

• Strategies proposed in the Policy for the promotion of the SME sector include:

Investments in technology transfer;

Building capacity for entrepreneurial and managerial skills training for SME; and

Facilitating the diffusion of technically feasible and economically viable technologies.

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The National Energy Policy (2003)

• Promote the application of alternative energy sources other than fuelwood and charcoal.

• Promote entrepreneurship and private initiatives in the production and marketing of products and services for rural and renewable energy.

• Electrification of rural economic centres and make electricity accessible and affordable to low income customers.

• Increased availability of energy services, including grid and non-grid electrification to rural areas.

• Establish norms, codes of practice, standards and guidelines for cost effective rural energy supplies.

• Research and development on rural energy.

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The Electricity Act (2008)

• Deals with rural electrification in terms of both on- and off-grid electricity supply systems including renewable energy options.

• Within the framework of the Rural Electrification Plan and Strategies, the Minister concerned, in consultation with Rural Energy Agency shall prepare Rural electrification Plan and Strategies and submit an annual progress report to the National Assembly.

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Present Scope of Renewable Energies

Renewables Global Status Reports - 2009• Modern renewable energy industry is a “guaranteed growth”

sector and even “crisis-proof”.

• “Policymakers have reacted to rising concerns about climate change and energy security by creating more favorable policy and economic frameworks, while capital markets have provided ample finance for development and deployment”.

• “The recent growth of the sector has surpassed all predictions, even those made by the industry itself”.

• However, the world is still far from the political pledge made in 2002 at the World Summit on Sustainable Development (WSSD) to substantially increase the share of renewables in the global energy mix.

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Initiative to Promote Renewable Energy in Tanzania

• Transformation of the Rural PV Market in Tanzania Project (UNDP/GEF/MEM)

• Sida/MEM Solar PV Project.

• Global Village Energy Partnership (GVEP)

• ‘Promotion of Renewable Energy in Tanzania’ (PRET)

• The Scaling up Modern Energy Services in East Africa

• World Bank Energy Access Expansion Programme (EAP)04/18/23 20

Proposed Strategies for Improving Access to Modern Energy Services in Rural Areas of Tanzania

1. The Role of Government

2. Link to Ongoing Initiatives

3. Technology Transfer

4. Education and Training

5. Networking

6. Technological Intermediaries

7. Target Group Orientation and Participation

8. Collaboration and Partnerships

9. Intellectual Property

10. Gender Considerations

11. Environmental Aspects

12. Learning from Best Practices

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The Role of Government

• Much has been achieved in terms of improving the macro-economic environment in Tanzania.

• Policy initiatives are numerous; the policy framework and its overall context are supportive and are intended to trigger development also at micro economic level.

• Good policies (and regulations to enforce them) are necessary, but not sufficient condition of socio-economic development - they have to be rigorously implemented.

• It is equally important to get policies right in terms of resource allocations.

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The Role of Government / Continued

• Technology diffusion to the taget group - small enterprises (as multiplicators) and end-users (the beneficiaries) - has primarily to be a public sector function, with the government having to take a (if not the) leading role.

• Respective Ministries (particularly MEM and MITM) shouldbemade to fully understand their role as government commitment, pro-active support and involvement.

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The Role of Government - Key Issues and Actions

• Higher priority to renewable energy technologies in the pursuance of energy, SME development, community development and environmental policies.

• Translation of the political will into budgetary allocations to renewable energy programmes.

• Action to ensure that environmental benefits of renewable energies are properly recognized in energy prices.

• Action to ensure that wide-spread and effective incentives are available to stimulate initial application of renewables,

• Provision of resources for the continued development of renewable energy sources.

• Enhancement of commercial technology transfer links and mechanisms between industrialized countries during intergovernmental negotiations.

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Key Issues and Actions - Continued

• Introduce new laws and policy provisions for renewable including:

Policy targets,

Subsidy programs,

Feed-in tariffs that are favourable to renewable energies and

Renewable portfolio standards.

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Link to Ongoing Initiatives

• Promising initiatives/interventions (but largely uncoordinated) at national, regional and international level towards improving rural energy access in Tanzania already exist upon which to build on.

• With regard to financing mechanisms, the National Micro Finance Policy covers the provision of financial services to small and micro enterprises that are engaged in legal (i.e. formal) economic activities countrywide.

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Technology Transfer

• Sourcing proven technology, in particular hardware, be it locally or foreign sourced - this notwithstanding the attempt to source proven technology first of all locally, then regionally/internationally.

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Education and Training

• Raise the level of education of the various actors.

• Focus on vocational training and possibly University graduates.

• Promote self-employment for graduates (middle and high level)

• Focus on SME - more versatile, capable and in tune with the needs of the people than big companies.

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Networking

• At national level, the existing platforms such as the renewable energy industry association - Tanzania Solar Energy Association (TASEA) and the SME Cluster Programme are possible avenues for a networking strategy.

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Technological Intermediaries

• The interaction between enterprises and technological intermediaries (R&D institutions) in the country is weak and their impact of has been marginal.

• The strategy shouldbe to address the factor affecting them - including inadequate financial resources, poor infrastructural facilities, policy implementation, etc.

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Target Group Orientation and Participation

• Every effort has to be made ensure that the target group participates actively in the identification, development, planning and implementation of the proposed activities so that its problems and needs are adequately catered for, and to enhance the sense of ownership.

• The target group is divided into two categories:

The multiplicators (i.e. the enterpreneurs), and

The (ultimate) beneficiaries (members of the rural community)

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Collaboration and Partnerships

• Collaboration and/or partnerships should be sought with organizations/institutions/agencies including national organisations active in offering services and supporting in matters related the various aspect of of rural energy access

• Enterprises dealing with renewable energy technology in the country are potential technological intermediaries/collaborating partners andtherefore should be used as what could be designated as centres.

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Intellectual Property

• Intellectual Property (IP) issues should be adequately incorporated in ruralenergy undertakings.

• Take advantage of the existing framework and infrastructure for IP protection.

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Gender Considerations

• Address the gravity of under- and unemployment, especially in women (and youth) in urban as well as rural areas.

• Address the gender imbalance of ownership particularly in the technology-based SME sector, where most enterprises are owned and run by men.

• Aspects relevant to women's interests and advancement should an integral part of the rural energy access intervention. The aim of promoting women is to improve women's opportunities to perform their tasks/functions effectively and share equally in the benefits of development.

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Environmental Aspects

• Introduce environmentally sound technologies in the form of renewable energies in order to enhance the competitive edge of SME within the East African Region.

• Fully utilise the existing carbon trading opportunities, including the Clean Development Mechanism (CDM) and others that exist.

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Learning from Best Practices

• Lessons and best practice experiences derived from similar projects within the country and internationally should be fully incorporated in rural energy undertakings. Experiences such as those learnt in the UNDP/MEM Transformation of Rural Photovoltaic (PV) Market in Tanzania Project and those from other countries such as the so-called ‘Mother Licensee’ model that has been used very successfully in India; and the Bangladeshi - “Grameen Shakti” Model should be explored.

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THANK YOU FOR YOUR ATTENTION

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