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Demand For Electricity In Tanzania Fuelled By Industrial Growth
Cape Town, South Africa (SPX) Mar 26, 2008 Rising demand from both local and export power markets is necessitating urgent additions to Tanzania's installed electricity capacity. The country is looking to the rehabilitation of the power industry and the exploration of both gas and coal for power generation to reduce the supply-demand gap. New analysis from Frost and Sullivan, Strategic Analysis of the Tanzanian Electricity Industry, finds that the market earned revenues of $264 million in 2007 and estimates this to reach $440 million in 2013. "Tanzania has a population of 39.4 million, of which only 10.0 per cent have access to electricity," notes Frost and Sullivan Research Analyst Moses Duma. "With economic development fuelling residential and commercial demand for power, the Tanzanian Government is channelling substantial resources towards upgrading existing power plants, building new ones and exploring alternative sources of power." Furthermore, the Southern and Eastern African Power Pools are battling to meet the power demand from their member countries. Tanzania has a potential to generate 4,000 MW, which can be used to meet both local and export markets. Moreover, these power pools are already building inter-connectors to ensure smooth sharing of electricity amongst the member countries. While Tanzania operates both hydropower and thermal power systems, hydropower constitutes about 62.8 per cent of the country's power generation capacity. Thermal power in Tanzania is composed of natural gas from Songas and the power generated by other isolated diesel plants. Efforts are also underway to convert some diesel power plants into gas-powered power plants. However, a lack of infrastructure, the monopoly enjoyed by the state utility and the high capital costs of building new power plants are all major restraints for the growth of this potentially lucrative market. The Tanzania Electric Supply Company (TANESCO), a wholly government-owned institution, is responsible for electricity generation, transmission and distribution in the country, and accounts for 98 per cent of the country's electricity supply. "A major hurdle for companies wishing to enter the market is the lack of project finance," says Duma. "The Tanzanian Government lacks adequate finance to fund power sector projects, and due to this, many ambitious projects that were identified remain undeveloped." Overall, the Tanzania power industry presents significant investment opportunities for independent power producers (IPPs). Three major IPPs are already contributing power to the national grid through Tanesco, but the government still needs to set up a clear strategy for the involvement of IPPs and the tariff structure. Community Email This Article Comment On This Article Related Links
Nearly One Dollar in Every Four Goes To Buy Energy
Alexandria VA (SPX) Mar 25, 2008It is not just the poorest households who are struggling to pay their energy bills or who are affected by government energy policies, says Americans for Balanced Energy Choices (ABEC). A new study reveals individuals and families making less than $50,000 per year will pay 22 percent of their after-tax income for energy, double the burden of just a decade ago. |
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