When John Magufuli came into office, he found one disastrous energy investment idea that had been hurtling around the corridors of power for years looking for a place to land.
It was the proposed construction of a $300 million wind-generated electricity farm in Singida with a capacity of 100MW. The resultant power was to be sold to Tanzania Electric Supply Company (Tanesco) to be integrated into the national grid.
The project had the backing of powerful men, who cleverly wanted the government to put money into it. But Magufuli entertained no such nonsense, and the idea was shelved.
Today Magufuli is no more, and Tanesco is once again chasing the wind. All that Tanzania needed was another manufactured power crisis to justify yet another non-investment in the energy sector. Sounds eerily familiar, doesn’t it?
In this plan, Tanesco proposes to “construct power generation sources using renewable energy due to climate change”. Three sites are proposed with a capacity of 550MW of wind-generated power in Singida and Makambako, and an additional solar site in Shinyanga.
While it is true that the climate is changing and the world is moving towards renewable energy sources, those are not sufficient reasons to invest in both solar and wind at this point in time.
Recent power issues highlighted the need for deploying multiple energy sources to increase reliability. The idea is to provide a reliable power solution, regardless of the weather.
Tanesco’s notice acknowledges that oversight without saying so, which is baffling since the energy generation mix concept is not rocket science. However, quite inexplicably, they adopt weather-dependent sources as a solution to the unreliability of the current weather-dependent sources!
The biggest question is – whatever happened to solid solutions such as gas, coal, and nuclear? The first two are Tanzania’s most logical options right now, so why are they overlooked while the government is chasing its wind and solar wild goose?
Tanesco’s 2012 Master Plan (PSMP) for 2035 projected that new power additions would come from hydropower (37 percent) and coal (42 percent). Renewable energy was to play a very small role in their equation, at only three percent.
While Nyerere Dam’s 2,100MW capacity will go a long way in meeting the hydropower objectives, for some reason, coal is no longer in the picture despite the fact that Tanzania boasts 5 billion tonnes of coal reserves, enough to meet current demand for 800 years!
In a blog post in March 2011, the then chairman of Parliament’s Public Accounts Committee (PAC), Zitto Kabwe, waxed lyrical about coal prospects in Tanzania. Back then, decision-making was blamed for the non-exploitation of those resources. Ten years later, our political masters haven’t found it in them to move beyond that point yet one inch!
Then there is natural gas. Tanzania has 57 trillion cubic feet of natural gas reserves valued at an eye-popping $55 billion. A set of four plants which were to generate a total of 1,400MW was proposed a decade ago, envisioned to make use of the onshore portion of natural gas resources, with utilisation being at only 6 percent of current production. As a result, Kinyerezi I and Kinyerezi II added 150MW and 240MW, respectively, into the national grid. Kinyerezi III and Kinyerezi IV were to contribute 600MW and 450MW respectively, but the plans were halted.
Now wind and solar have come to the fore. Unfortunately, the solutions work only when the wind is blowing and the sun is shining. In the US, for example, solar and wind plants operate at only 15 percent and 25 percent of full capacity throughout the year, respectively, while coal plants operate at 90 percent.
To mitigate that effect, wind and solar solutions require storage. Excess energy from good days is stored in batteries to be used during the night, cloudy days, or when the air is still. The rule of thumb is that storage capacity needs to match installed capacity. But storage is extremely costly so intermittent energy supply is common. Germany, for example, gets only 17 percent of installed 100GW capacity from wind and solar installations.
Tanzania cannot afford to be that profligate.
Moreover, considering the fact that a levelised median cost for generating 1MWh of energy through gas is $71, solar costs $56, and wind costs $50, one might get the impression that solar and wind are competitive, but in the US gas costs only $45, thanks to fracking. This implies that investment decisions need to consider country-specific factors. And, given Tanzania’s huge gas and coal reserves, there is no reason why coal and gas options shouldn’t be preferred.
Finally, the 2012 wind project was proposed to be $300 million for 100MW, that is 1MW for $3 million, compared to $1.4 million for Kinyerezi II and $750,000 for Kinyerezi III. If the cost dynamics remain the same, it is not difficult to see why the proposed projects are scandalous.
That said, if the government will put no money into those projects, if Tanesco will purchase only the capacity generated, and if the price offered per KWh is competitive compared to other sources, there may be something to salvage from these projects.
But Tanzanians have seen stranger things, so no one should cross their fingers yet.