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Tanzania to initiate renewable energy auction

Pic credit: news.discovery
East African region sees Tanzania introducing renewable energy bid auction and construction started on Kenya’s Lake Turkana Wind Power project. Pic credit: news.discovery

The Tanzanian Energy and Water Utilities Regulatory Authority (EWURA) announced on the weekend that it is introducing a competitive auction for solar and wind renewable energy projects in the near future.

According to the East African Business Week, EWURA’s director of electricity, Eng Anastas Mbawala indicated that the organisation is in the final stages of plans for renewable energy projects in rural areas.

Mbawala said the proposals will help Tanzania Electric Supply Company (TANESCO) and the Rural Energy Authority (REA) to choose investor through an auction bidding process who quote reasonable costs especially on solar and wind hybrid projects.

Trial and error

In 2008, EWURA established the ‘avoided cost approach system’ whereby renewable energy project costs spent by the investor would be repaid on the basis of TANESCO’s customer tariff pricing structure.

Mbawala explains that: “Unfortunately the system was challenged on power projects concerning solar and wind due to the investment cost and the technology itself. So it was difficult for investors to reclaim their capital within the time planned.

“But on hydro and biomass projects, benefits went more to the investors rather than the government”, Mbawala said.

Kenya’s renewable energy

In further east African news, Kenya has set in motion the construction of the Lake Turkana Wind Power (LTWP) project, according to Quartz Africa.

The LTWP project site situated approximately 550km north of Kenya’s capital Nairobi, covers 40,000 acres and powered by the ‘Turkana Corridor Wind’, a low-level jet stream originating from the Indian Ocean that blows all year round.

The project, on completion, will consist of 365 turbines each with a capacity of 850 kW and expected to achieve 68% load capacity factor, which will make it the most efficient wind power farm in the world.

This renewable energy project forms part of Kenya’s Vision 2030 plan to add 5,000MW generation capacity on the national grid.

Project finance

The project is of significant strategic benefit to Kenya, and at Ksh70 billion ($700 million) will be the largest single-private investment in Kenya’s history. The project is funded by a consortium of investors under the auspices of the European Union with the African Development Bank as the lead arranger.

Kenya Power, responsible for the transmission, distribution and retail of electricity throughout the country, has signed an agreement to buy the power produced at a fixed price over a 20-year period.

The LTWP project will surpass Tarfaya wind farm in Morocco, which is currently Africa’s largest wind farm with 131 turbines. It will also be larger than Ashegoda wind farm in neighbouring Ethiopia, which opened in October 2013.

Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.