How gas saved Tanesco Sh37 trillion in 16 years

What you need to know:

  • The use of natural gas saved Tanzania Electric Supply Company about $16 billion in power generation costs between 2004 and 2020, according to a new report by Wentworth Resources
  • Tanesco managing director Maharage Chande was not in a position to confirm the figure but said the firm was “saving a lot” by using gas as an alternative to emergency power production sources

Dar es Salaam. The introduction of gas-fired generation has saved the Tanzania Electric Supply Company (Tanesco) $16 billion (about Sh36.8 trillion) between 2004 and 2020, a new Wentworth Resources report revealed yesterday.

Tanesco managing director Maharage Chande was not in a position to confirm the figure but he admitted to The Citizen that by using gas as an alternative to emergency power production sources which are heavy fuel or diesel, Tanesco was saving “a lot of money.”

“We are generating large quantities of electricity using gas and this has helped us to save much money, otherwise, with the current climatic change, we would be using more diesel which is costly,” said Mr Chande.

Wentworth is a domestic natural gas producer whose core producing asset is located at Mnazi Bay, in the onshore Ruvuma Basin in Southern Tanzania.

“Gas-fired generation has provided businesses and industries with reliable and reasonably priced power to develop the economy---a vital component for Tanzania’s emerging economic outlook,” reads a part of the 2021 Wentworth report.

Wentworth Resources chief executive Katherine Roe said the company continued and will continue to offer a fixed price for gas to all customers, supporting both the ongoing local development and the expansion of energy access across Tanzania.

Currently, according to the report, energy access stands at 33 percent in Tanzania, with 7.7 million households without access to power.

“This positions energy affordability as the most important factor in providing an effective and inclusive power supply to the nation’s customers,” reads a part of the report.

Going by the report, at present, demand for gas in Tanzania is driven primarily by electricity generation at 79 percent, followed by industrial demand at 21 percent.

Domestic households and compressed natural gas come next.

“Future demand would include all of these off-takers, but also include railways and export pipelines,” a report read in part.

“This, of course, does not include demand for Liquefied Natural Gas (LNG), which is expected to materialise around 2030, and entails mainly the export market,” it added.

Meanwhile, the government yesterday called on investors to look at Tanzania differently, positively and optimistically on the grounds that things are moving and changing for better.

Officiating at an event to close the two-day Tanzania Energy Congress yesterday, the Energy minister, Mr January Makamba, said the country has a leader who understands the value of the private sector.

“President Samia Suluhu Hassan wants investors who will come and invest in our country. We want investors who will facilitate availability of capital in our country and keep things moving,” he said.

Mr Makamba said the government was doing all in its power to create a friendly business environment to attract investors.

“We want you to be ambassadors and envoys outside there.”

Mr Makamba challenged investors to keep engaging with the government for common understanding.

He said the focus of the engagement should be on how to finance the energy projects and how to power the country’s economy and create more jobs.