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Tanzania

Energy Sector

Tanzania’s electricity sector currently relies on over 80% of power sourced from hydroelectric and natural gas based plants. The division is fairly even between the two energy resources being around 40% for each source reflecting the Governments’ desire to increase diversification away from previous hydroelectric dependency due to the potential supply risks foreseen with the changing climate.

Electricity Demand and Electrification Rates

Peak demand was recorded at 1026 MW in 2016 with the average figure being around 950 MW, representing a steady increase in recent years up from 851MW in 2012. Through the various policies and strategies that the country has in place predictions expect this trend to continue at a rate of 12-15% annually. The main drivers are the general economic growth, the planned expansion of industry and rural electrification.

 

Electricity Consumption in 2014

 

Economic Sector % GWh
Industry 25.5 1,270
Transport 0 0
Residential 44.8 2,227
Commercial and Public Services 22.9 1,141
Agriculture / Forestry 3.6 180
Fishing 0 0
Other non-specified 3.2 158
Final Electricity Consumption 100 4,976

Source: IEA

 

Energy generation for the year ending June 2016 was measured at 6,448 GWh, distributed to 1,743,820 TANESCO customers, itself an increase on the previous years 1,502,474. The Government of Tanzania reporting a per capita consumption of 137 kWh/year. The World Bank figures from 2014 show a 30% overall electrification rate being 57% in urban areas and 18% in rural, with an ambitious national target in place for the current Government of 75% by 2033.

Electricity Generation

The total installed capacity as of June 2016, excluding imports was 1,357.69MW, a 10.4% reduction in capacity from 1,516 in 2015, which was due to the retirement of Emergency Power Producers (EPPs) at Ubungo and Tegeta. In addition the country utilises 14 MW of imported capacity from neighboring Uganda (8MW) Zambia (5MW) and Kenya (1MW). Of the aforementioned 1300-plus MW, TANESCO, Tanzania’s state-owned power utility company, owns the bulk of the generation power plants with a total installed capacity of 1,050.24 MW (77.4%) with the further 307.45 MW (22.6%) owned by Independent power producers (IPPs). The grid generation mix comprise of 41.7% hydro generation, 44.7% natural gas generation, 12.8% liquid fuel generation and 0.8% biomass generation.

 

Electricity production was dominated by large hydro power plants until recently. However, due to extensive droughts in the country further exacerbated by a focus on generation from only two rivers, their contribution to total supply has fallen dramatically. This has forced the utility to use extensive load shedding, thermal power plants for base load and emergency power installations at considerable financial cost. This situation has led to an active promotion of further utilisation of natural gas in the medium term and a desire for a broader mix incorporating further renewable energy resources including wind, geothermal and solar.

 

Grid-connected power plants

 

 Power Station Owner Installed Capacity (MW)
Hydro Power Plants
Kidatu TANESCO 204
Kihansi TANESCO 180
Mtera TANESCO 80
New Pangani Falls TANESCO 68
Hale TANESCO 21
Nyumba ya Mungu TANESCO 8
Uwemba TANESCO 0.84
Mwenga Mwenga Hydro LTD 4
Yovi SPP 0.95
Gas Power Plants
Songas IPP 189
Ubungo I Gas Plant TANESCO 102
Tegeta Gas Plant TANESCO 45
Ubungo II Gas Plant TANESCO 121
Kinyerezi 1 TANESCO 150
Liquid Fuel Power Plants
IPTL IPP 103
Diesel (Tanesco) TANESCO 7.4
Nyakato TANESCO 63
Biomass Power Plants
TANWAT IPP 1.5
TPC IPP 9
TOTAL   1357.69

Source: Ministry of Energy and Minerals Tanzania (2016) – Energy Sector Quarterly digest

Transmission and Distribution

The transmission and distribution system comprises of 48 transmission substations interconnected by transmission lines, 3,340 km of 220 kV, 2,063 km of 132 kV, 668 km of 66 kV, 24,165 km of 33 kV, 6,006 km of 11 kV and 71,629 km of 400 and 230 kV lines. Current transmission and distribution losses are at 16.4%. Beyond the grid, Small Power Producers (SPP) are responsible for the management of isolated micro- and mini-grids. Several development projects are in place to extend and upgrade the transmission and distribution sectors to cope with expanding demand and supply, to interconnect the isolated supply network, to increase international electricity trade with neighboring countries and to improve the general reliability of the system. The Tanzania Five Year Development Plan 2011-2016 includes 10 network projects for a total investment of almost 4 trillion TZS (ca 1,7 billion euro). The process of interconnecting the grid along with upgrading power lines is expected to be complete by 2019.

Electricity Tariffs

TANESCO applied for tariff adjustment in 2016, which was approved the same year and came into effect on January 1st 2017. The tariff apportionment across the five customer categories was based on the share of cost of supply and time of usage, the consumer group whose consumption coincided with peak demand were liable to higher charges as the peak demand was met by power from expensive thermal power plants.

 

Current Electricity Tariff Schedule (effective from April 2016)

 

Customer Category Component TZS
D1 Domestic Low Usage Basic Charge 0
Energy Charge 0 -75kWh/month 100
Energy Charge above 75kWh/month 350
T1 General Use Basic Charge 0
Energy Charge 292
T2 Low Voltage Supply Basic Charge 14,233
Energy Charge 195
Demand Charge (kVA) 15,004
T3/ T3MV Medium Voltage Supply Basic Charge  16,769
Energy Charge 157
Demand Charge (KVA) 13,200
T3/ T3HV High Voltage Supply Basic Charge 0
Energy Charge 152
Demand Charge (KVA) 16,550

Source: TANESCO

Off-Grid Electrification

TANESCO has a total off-grid generation capacity of 82 MW from 18 isolated mini-grids. Two mini-grids that run on natural gas account for 29 MW with the remaining 53 MW sourced from diesel generators. Tanzania has a preference for electrification through grid connections though acknowledges the role that off grid solutions can provide given network expansion timeframes. One study has concluded that the grid connection plan would electrify about 5,500 settlements by the end of 2022, with 6,000 further settlements remaining as candidates for off-grid electrification or disseminated technologies. Against this backdrop the current electrification rate mean that many Tanzanian households continue to rely on kerosene lamps, 58.4% according to the National Bureau of Statistics. In conjunction with a widely dispersed population these factors make a compelling case for off-grid energy solutions.

Developments have been initiated to exploit this potential, a prominent one being Lighting Africa supporting the development of a commercial market for quality-verified solar lanterns and solar home systems in the country with a target to reach 6.5 million people by end 2019. These efforts have been further enhanced by Government support through VAT and tariff exemptions for imports of small solar products assisting companies with business models pegged to mobile phone Pay-As-You-Go (PAYG) financing schemes. In addition larger scale mini-grid systems are under development from various private sector players exploiting solar, hydro and biomass sources that are gaining interest from the Government and development agencies. A prime example being the support offered through REA based on DFID and SIDA funding that offers results based finance for green mini and micro grids.

 

 

Key figures

Available statistics:
Capital
Dodoma
Official languages
Kiswahili, English
Population (2016 projection)
50,142,938
Population growth (2016 est.), %
2.77
Median age (2016 est.), years
17.6
Urbanization rate (2010 - 2015), % p.a.
5.36
Urban population (2015), % of total
32
Rural population (2015), % of total
68
Population density (2015), per km2
60
HDI (2014)
151 of 188
National Currency
Tanzanian Shilling (TZS)
Exchange rate (March 2017), USD
1 USD = 2,237 TZS
GDP (2015), USD billion current
45.63
GDP growth (2015), %
7.0
GDP annual growth rate forecast (2020), %
6.64
GNI per capita (2015), current int’l USD
2,630
Inflation (2016), %
5.0
Inflation Rate Forecast (2020), %
6.0
Foreign Direct Investment, net inflows (2015), BOP current USD billion
1.961
Net official development assistance (2014), current USD billon
2.648
Budget deficit (2016 est,), % of GDP
-3.90
Ease of Doing Business (2017), rank of 190
135
TI Corruption Index (2016), rank of 168
117
Installed Generation Capacity (MW, 2016)
1,357.69
Installed Fossil Fuel Capacity (2016), % of total installed capacity
57.5
Hydro Capacity (2016), % of total installed capacity
41.7
Other RE Capacity (2016), % of total installed capacity
0.77
Renewable electricity output as % of total electricity output excl. hydro (2016)
0.6
Avg. distribution and transmission losses as % of output (2016)
16.4
Net electricity imports (2016), GWh
85.77
Electrification rate, total (2014) %
30
Electrification rate, urban (2014) %
57
Electrification rate, rural (2014) %
18
Peak demand (2016), MW
1026
Per capita electricity consumption (2016), kWh
137
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