Eritrea (2012)

Degree of reliance on imported energy: 

<p>
There are no indigenous sources of oil, natural gas, coal and hydropower. Oil imports and consumption are 5,000 barrels per day (bpd). In 2005, oil imports accounted for 35% of the total national energy supply. The only oil refinery was located at the Red Sea port of Assab. It had a capacity of 18,000 bpd. In 1997, it was closed because of high operating and maintenance costs. As a result, all refined products, including jet fuel and gasoline, are imported.</p>

Main sources of Energy: 

<p>
Total installed electricity capacity (2008): 168 MW</p>
<ul>
<li>
Conventional Thermal: 98.93%</li>
<li>
Solar, tide and wave: 0.6%</li>
<li>
Wind: 0.48%</li>
</ul>
<p>
<br />
Total primary energy supply (2009): 726 ktoe</p>
<ul>
<li>
Biofuels &amp; waste: 77.4%</li>
<li>
Oil: 22.6%</li>
</ul>
<p>
<br />
Domestic generation comes mainly from two oil-fired plants that produced 267 GWh in 2006.&nbsp; Another 2 GWh came from solar energy.&nbsp; Total consumption was 220 GWh, with distribution losses of 37 GWh (13.75%).&nbsp; Eritrea&rsquo;s annual electricity consumption per capita is 67 kWh. The main source of energy for lighting is kerosene, which is burnt through wick lamps.</p>

Country: 

Eritrea

Extent of the network: 

<p>
Approximately 32% of the national population have access to electricity, but only 3% in rural areas.<br />
<br />
The Eritrean Electricity Corporation (EEC) runs two types of grid systems, the Inter-Connected System (ICS) around the Asmara-Massawa regions; and the Self-Contained System (SCS) around Assab and other areas, such as Adi Keih, Barentu, Agordat and Tessenei. Total peak capacity of the two systems is 119 MW, of which 10 MW is in the SCS.&nbsp; The ICS is currently over-capacity with the commissioning of the Hirgigo 88 MW plant in 2002, along with the Belesa Power Plant. The Belesa plant runs at low efficiency, due to aged generating equipment, A lack of maintenance, and high voltage drops in the distribution system.</p>

Capacity concerns: 

<p>
Eritrea is facing acute shortages of modern energy services, especially in rural areas, and the country is generally characterised by low energy consumption levels. In order to facilitate the economic development of Eritrea, further development of the electricity sector is necessary.<br />
<br />
The use of biomass for cooking, using generally inefficient appliances such as the mogogo, has led to unsustainable energy supplies, especially the traditional biomass, and is contributing to carbon emissions. Deforestation is resulting from overuse of biomass for fuel. Without alternatives, the pressure on Eritrea&rsquo;s limited forest resources would increase.<br />
<br />
The over-reliance on imported fossil fuels does not only divert scarce financial resources from other socio-developmental areas, but further contributes to environmental emissions and energy related health problems.</p>

Potential for Renewable Energy: 

<p>
<b>Solar energy</b><br />
Eritrea has a very high potential for solar energy, with an average insolation of 5.0-6.5 kWh/m2/day. Possible uses include solar PV, water heaters and sterilisers, crop dryers and tobacco curing, desalination, cooling and refrigeration, and electricity generation. Solar is currently primarily utilised for electricity in public buildings such as schools and hospitals.<br />
<br />
<b>Wind energy</b><br />
A recent Global Environment Facility (GEF) sponsored feasibility study for wind energy on the southern coast shows that a 2.4 MW wind park in Assab and many off-grid stand-alone wind systems, wind-diesel or wind-solar hybrid systems are feasible and potentially economic. Wind pumps for irrigation, or for watering villages and their livestock have a high potential in the vast majority of Eritrea.<br />
<br />
<b>Biomass energy</b><br />
There are many indications of potential for modern biomass energy usage in certain locations in Eritrea:</p>
<ul>
<li>
The Alighider Farm Estate has the potential to supply raw materials (cotton and sorghum stalks, elephant grass, banana leaves etc.) for briquette production for at least 15 plants, each with a capacity of 4000 tons per year. Briquettes are a replacement for fuel wood and charcoal.&nbsp; Agricultural waste could generate electricity thermally,</li>
<li>
Biogas plants could be installed in the Elabered Agro-industry, and other smaller dairy farms.</li>
<li>
Biogas could be generated from cactus trees.</li>
<li>
Energy recovery from municipal solid and liquid wastes is possible.</li>
<li>
Energy crops, such as Salicornia (being developed by SeaWater Farms, a biofuels company), could generate electricity for local uses or for the central grid.</li>
</ul>
<p>
<br />
<b>Geothermal energy</b><br />
The most favourable location for geothermal energy in Eritrea is the Alid volcanic area, about 120 km south of Massawa, identified by the United Nations Development Programme in 1973. Further investigations were conducted in 1996, which identified at least 11 geothermal areas in the area. Additional exploration is required to prove the capacity of the resource, and the Eritrean Ministry of Mines is seeking funding for this purpose. If successful, a 5 MW pilot geothermal power plant has been proposed.<br />
<br />
<b>Hydropower</b><br />
Three potential hydropower sites have been studied (Ad Dankers, 1997), which include Tekeze river (~ 23000 GWh per year), Anseba river (~120 GWh per year), and Setit river (~ 240 GWh per year). Other potential sites for micro and mini hydropower have yet to be studied.</p>

Potential for Energy Efficiency: 

<p>
The 3-stone fire, a traditional method of stove construction, predominantly used in Eritrea for cooking, needs to be abandoned as soon as possible because of its low energy efficiency (EE), circa 10%. Instead, energy efficient biomass stoves should be introduced for the household sector, especially in rural areas where the dependency on biomass will remain for many years. Further, EE cooking practices need to be stimulated, for example the pre-soaking of grains, the use of lidded receptacles, and using solar energy for pre-heating. An improvement in energy efficiency also needs to be worked on for other cooking stoves, such as those using kerosene, LPG, or electricity. Special attention must be given to disseminating EE stoves in order to ensure that what has been developed is also going to be put to use. Significant entrepreneurial potential exists in this regard.<br />
<br />
A great potential exists to improve EE in all industries, but particularly in the most energy-intensive ones &ndash; steel, glass, ceramic and cement.</p>

Ownership: 

<p>
<b>Electricity market</b><br />
The Eritrea Electric Corporation (EEC) is a public utility that operates two systems, namely the the Inter-Connected System (ICS) which covers 89% of its business and the Self-Contained System (SCS), accounting for the 11%.&nbsp; The total generating capacity is over 155 MW, of which the EEC accounts for around 134 MW, with the remainder from either public institutions like the Assan Port Administration, small municipalities in remote towns, or entrepreneurs with smaller generators.<br />
<br />
<b>Liquid fuels market</b><br />
Offshore oil exploration has taken place, but no commercial deposits have been discovered. Companies which have explored for oil are ENI (Italy), Anadarko Petroleum (US), Perenco (France) and CMS Oil and Gas (US). In October 2008, the government signed 2 agreements with the Defba Oil Share Company (a joint Chinese-Eritrean venture to explore for oil. Exxon Mobil, Shell and Total are involved in the marketing and distribution of petroleum products in the country.<br />
<br />
The Petroleum Company of Eritrea (PCE) is a public company, responsible for the wholesale of petroleum products in the country.</p>

Structure / extent of competition: 

<p>
The Eritrean Electricity Corporation (EEC) is a vertically-integrated company, responsible for the generation, transmission and distribution of electricity.<br />
<br />
In May 2004, the government made the first steps in reforming the power sector.&nbsp; Electricity Proclamation No. 141/2004 has the objective of promoting efficiency, safety, environmental protection and private sector involvement.&nbsp; Proclamation No. 142/2004 for the Establishment of the Eritrea Electric Corporation has the purpose of commercialising the utility to give it more autonomy in its operations and to contribute to the development of Eritrea by providing efficient, dependable, cost-effective and environmentally safe production, transmission and distribution of electricity.<br />
<br />
The oil market is primarily unbundled, with private firms involved in upstream and downstream activities in the country. The PCE is state-owned, and operates solely as a wholesaler.</p>

Existence of an energy framework and programmes to promote sustainable energy: 

<p>
To demonstrate its commitment to promoting sustainable energy, the Ministry of Energy and Mines, in consultation with the Ministry of National Development, has targeted energy development initiatives in its long-term program, up to 2015. They see it&nbsp; as a vehicle to improve poverty alleviation, education, water and environment sustainability, with particular attention to the development of alternative energy resources as a primary objective. Emphasis is not only on the adequacy and affordability of energy, but also on qualitative aspects, including flexibility, efficiency, sustainability and usage convenience. The issues of social equity, quality of service, energy conservation, environmental protection and safety are critical. So is the issue of ensuring energy security, as the country is heavily dependent on imported fuels. These goals imply major investment in additional capacity in power generation, improvement in energy efficiency and in sector management.&nbsp;<br />
<br />
The policy will be implemented in eight priority areas:<br />
1. Energy reform measures,<br />
2. Investment promotion,<br />
3. Improvement of sector management capacity,<br />
4. Creation of a &ldquo;right pricing&rdquo; policy,<br />
5. Promotion of energy conservation and environmental protection at supply and end-user levels,<br />
6. Promotion of rural electrification,<br />
7. Promotion of regional co-operation in energy trade,<br />
8. Involvement in modern energy technology developments.<br />
<br />
The current short and medium-term energy sector investment program consists of investments in refurbishing and expanding generating plants, in expanding the Rural Electrification Programme, and supporting green field investments in renewable energy, including wind, solar and geothermal power applications.</p>

Current energy debates or legislation: 

<p>
The government strategy to increase electricity generation includes renewable energy resources in the form of wind and solar systems, with the ultimate aim of generating as much as 50% of the nation&rsquo;s grid electricity from wind energy.&nbsp; Similarly, photovoltaic (PV) generation is being considered.&nbsp; Solar energy accounted for only 0.7% of the EEC&#39;s total production in 2006, despite Eritrea&rsquo;s very high potential.<br />
<br />
Rural electrification requires further investment.&nbsp; The government&rsquo;s restructuring of the EEC, and the development of a new energy policy, is aimed at attracting private sector participation.&nbsp; To this end, international and regional independent power producers (IPPs) and independent power distributors (IPDs) are being sought as investors in the projects.</p>

Major energy studies: 

<p>
Eritrea is a member of the Common Market of East and Southern African States (COMESA), an organisation dedicated to promoting greater regional integration between member states, in an effort to stimulate the economies of all countries involved. The country is also a member of the African Union.<br />
<br />
Analysis of Long-Range Clean Energy investment Scenarios for Eritrea, East Africa &ndash; Robert Van Buskirk, Lawrence Berkeley National Laboratory, US. Available here:<br />
<a href="http://www.osti.gov/bridge/servlets/purl/886977-mP99Bh">www.osti.gov/bri...

Role of government: 

<p>
Within the Ministry of Energy and Mines (<a href="http://www.moem.gov.er">www.moem.gov.er</a>), the Department of Energy (DoE) is entrusted with the task of designing and refining policies, strategies and regulatory issues in the energy sector, approving the corresponding plans and programs formulated in the sector, and supervising their implementation.&nbsp; The Department of Energy has three divisions:</p>
<ul>
<li>
Energy Resource Management,</li>
<li>
Energy Resource Development, and</li>
<li>
The Renewable Energy Centre</li>
</ul>
<p>
&nbsp;<br />
In addition to the above there are two autonomous enterprises within the department; The Eritrea Electric Corporation (EEC) and the Petroleum Corporation of Eritrea (PCE) are governed by a board of directors, chaired by the Ministry of Energy and Mines.</p>

Government agencies in sustainable energy: 

<p>
<b>Renewable Energy Centre (REC)</b><br />
REC (formerly ERTC) was set up in 1995 to research and develop different renewable energy technologies (RETs).&nbsp; Up to now, its role has been fundamental in the dissemination of information regarding RETs and their implementation throughout the country.&nbsp; For example, the ERTC coordinated the Eritrea Dissemination of Improved Stoves Program (DISP) to develop and disseminate an improved version of the mogogo stove.&nbsp; The DISP was initiated in 1996, with the first field-test taking place in 1999.&nbsp; The Eritrean stove programme has grown rapidly. By March 2010, REC had installed 105,000 improved stoves (an increase of 95,000 from 2003), benefiting over 700,000 people in 3,600 villages. The total carbon saving per year from all stoves installed to date is about 305,000 tonnes/year CO2. REC is working to develop carbon finance contracts to enable more stoves to be supplied.<br />
<br />
REC is also developing other cooking equipment, such as a more fuel efficient charcoal fired coffee stove, and a fish cooking stove for use in the coastal strip area, as well as&nbsp; starting work with other renewable energy technologies.</p>

Energy planning procedures: 

<p>
<b>Wind Energy Application in Eritrea (2007-2011)</b><br />
<br />
Being funded by the GEF, the UNDP and the government, this project aims to produce pilot projects in the wind rich areas (Assab, Edi, Gahro, Gizgiza, Rahaita, Berasole, Beylul and Dekamhare) and replicate the project in other parts of the country. The project is expected to improve rural livelihoods by providing access to sustainable energy services and contributing to the reduction of greenhouse gas emissions. The three immediate objectives are:<br />
<br />
(1) To develop necessary personnel and institutional capacities to plan, install, operate and manage on- and off-grid wind systems, and increase awareness amongst decision makers in governmental and private institutions, both at the community and central level;<br />
<br />
(2) To install a small wind farm in Assab and integrate the wind-generated electricity into an existing conventional electricity grid, thus demonstrating that on-grid wind energy is feasible, and can be a cost effective electricity supply possibility in Eritrea at high wind speed sites;<br />
<br />
(3) To install eight small scale decentralised wind stand-alone and wind-diesel hybrid systems to demonstrate the viability of off-grid wind energy systems.<br />
<br />
<b>Eritrea Power Distribution and Rural Electrification Project (2004-2010)</b><br />
The World Bank funded the Eritrea Power Distribution and Rural Electrification Project at a cost of $57.2 million. This project was approved in 2004 and was extended until June 2010. The key components included rehabilitation and expansion of the electricity distribution system in Asmara, Eritrea&rsquo;s capital; rural electrification in four areas, and a program for power sector reform and the institutional capacity.&nbsp; In 2008, the World Bank approved additional financing for the project at a cost of US$17.5 million.<br />
<br />
The main energy sector development policies the Eritrean government have been aiming at:</p>
<ul>
<li>
Promoting economically and environmentally sound energy sector development through appropriate technology for energy production, conservation and usage optimisation;</li>
<li>
Appropriate energy pricing structures that avoids all forms of subsidy;</li>
<li>
Diversifying sources of energy to minimise the dependence on dwindling biomass energy resources and imported oil, promoting&nbsp; private capital participation in hydrocarbon exploration, and developing renewable energy resources potential;</li>
<li>
Modernising and expanding the country&#39;s power generation and distribution system, and enabling private participation in energy development and the market;</li>
<li>
Developing capacity through training and establishment of the necessary institutional and legal framework in order to competently manage the sector.</li>
</ul>

Energy regulator Date of creation: 

<p>
The Electricity Regulatory Commission (ERC) established by the Electricity Proclamation No.141/2004, is not yet fully functional, though Ministry of Energy and Mines personnel are occasionally assigned to carry out regulatory tasks.</p>

Degree of independence: 

<p>
According to the Electricity Proclamation No.141/2004, the Regulatory Committee shall have a chair-person, who, along with the other members shall be appointed by the President of the State of Eritrea.&nbsp; Two of whom shall be from the private sector.&nbsp; Funding for the organisation comes from governmental allocations, and operational levies.</p>

Regulatory framework for sustainable energy: 

<p>
The current regulatory framework promotes efficient, dependable, safe and economically sustainable electricity operations in Eritrea, as well as private sector and community participation in the sector.<br />
Therefore, current policy gives independent power providers the option of generating power using a variety of sources including wind, solar, geothermal, or other state-of-the-art conventional energy technologies.&nbsp; Importation or exportation of electricity leading to regional integration of power supply is subject to government approval; the distribution of power to rural communities is a priority.</p>

Regulatory roles: 

<ul>
<li>
To promote efficiency, dependability, cost-effectiveness, safety and quality of services and fair competition, as well as private and community participation in electricity operations;</li>
<li>
Supervise and ensure that electricity operations (the generation, transmission, distribution and sale of electricity) are carried out in accordance with the corresponding regulations;</li>
<li>
To study, review and determine electricity tariffs and related service charges;</li>
<li>
The initiation and performance of investigations into standards of quality of services, and to monitor standards of overall performance of permit holders;</li>
<li>
To protect the interests of customers, permit holders and the general public;</li>
<li>
To investigate complaints;</li>
<li>
To instruct parties in writing to adhere to and fulfil their obligations under this Proclamation within a reasonable time.</li>
</ul>

Role of government department in energy regulation: 

<p>
As the ERC is still a relatively young organisation and yet to be fully established, the Ministry of Energy and Mines (MOEM) has an occasional role in regulating the electricity sector. No other government department takes an active role in energy regulation, as the MOEM is also responsible for the natural resources of the country, including all energy resources.</p>

Regulatory barriers: 

<p>
Barriers&rsquo; pertaining to the lack of experience with wind energy increases the transaction costs for the initial development of wind energy systems. These include:</p>
<ul>
<li>
The lack of experience inside the Eritrean private sector with regards to the private business opportunities wind park projects offer;</li>
<li>
A lack of adequate model contracts, on the basis of which private developers and the EEC can negotiate Power Purchasing Agreements (PPAs) and other necessary contracts for such kind of projects,</li>
</ul>
<p>
&nbsp;<br />
Other issues including :</p>
<ul>
<li>
&nbsp;The lack of procedures and responsibilities for the development and implementation of rural renewable energy projects.</li>
</ul>
<p>
&nbsp;</p>
<ul>
<li>
&nbsp;The lack of financing mechanisms which take into account the special features of renewable energy technologies.</li>
</ul>

References: 

Ashden.org (2010): Case study summary: Renewable Energy Centre (REC), Eritrea. Available at: <a href="http://www.ashden.org/files/ERTC%20full.pdf">http://www.ashden.org/files... [Accessed 5th September 2013]<br />
<br />
IEA (2009) Share of Total Energy Supply. Available at: <a href="http://www.iea.org/stats/pdf_graphs/ERTPESPI.pdf">http://www.iea.org/sta... 5th September 2013]<br />
<br />
Energici (2010) Eritrea: Energy Profile. Available at: <a href="http://www.energici.com/energy-profiles/by-country/africa-a-l/eritrea">h... 5th September 2013]<br />
<br />
Heikki Noro Parola International Associates (2007) Wind Energy Applications in Eritrea, Prepared on behalf of the UNDP, GEF and The Goverment of Eritrea. Available at: <a href="http://erc.undp.org/evaluationadmin/reports/viewreport.html;jsessionid=F... 5th September 2013]<br />
<br />
Dube, I. (2009) Wind Energy Applications in Eritrea, Prepared on Behalf of the UNDP, GEF and The Government of Eritrea. Available at: <a href="http://www.climate-eval.org/evaluation/wind-energy-applications-eritrea-... 5th September 2013]<br />
<br />
Baire, S. (2010) Investment Opportunities in the Energy Sector of Eritrea, for the Eritrea Embassy of Japan. Available at: <a href="http://www.eritreaembassy-japan.org/data/Investment%20Opportunities%20in... 5th September 2013]<br />
<br />
energyrecipes.org (2006) Country Energy Information; Eritrea. Available at: http://<a href="http://www.energyrecipes.org/reports/genericData/Africa/061129%20RECIPES... 5th September 2013]<br />
<br />
High-level Conference on Water for Agriculture and Energy in Africa (2008) National Investment Brief, Eritrea. Available at: <a href="http://www.sirtewaterandenergy.org/docs/reports/Eritrea-Draft2.pdf">http... 5th September 2013]<br />
<br />
AFREPREN (2005) &#39;Eritrea&#39;, Page 27 in Making the African Power Sector Sustainable. Available at: <a href="http://www.un-energy.org/publications/974-making-africas-power-sector-su... 5th September 2013]<br />
<br />
Ministry of Energy and Mines (2009) The Electricity Proclamation. Available at: <a href="http://www.moem.gov.er/index.php?option=com_content&amp;task=view&amp;id... 5th September 2013]<br />
<br />
Ministry of Agriculture (2002) The National Action Programme for Eritrea to combat deserfication and mitigate the effects of Drought. Available at: <a href="http://www.unccd.int/ActionProgrammes/eritrea-eng2002.pdf">http://www.un... 5th September 2013]