Background, challenges, and context

Ethiopia is endowed with an abundance of renewable energy resources, particularly in the form of hydro, wind, solar, and geothermal energy. Its power system – currently reliant on hydropower – needs to be developed to meet its growth ambitions, provide electrification to all consumers in line with government objectives by 2025, and ensure long-term energy security.

The complex and resource-intensive nature of energy systems, and their development, makes planning critically important. One of the ways in which planning and decision-making can be informed is through the use of energy system models to explore possible future pathways and their associated implications. Meanwhile, understanding how behavioural issues can affect the overall demand for electricity and the future generation mix is vital for energy planning and the development of robust and appropriate energy policies.

The principal aim of this project was to develop possible transition pathways in Ethiopia to modern energy – specifically clean electricity – by incorporating behavioural issues into energy system modelling.

The team addressed a knowledge gap on how evolving demand for electricity, including productive uses and demand side policies (such as efficiency improvements and price changes), affects energy system development pathways and their economics.

Research overview and objectives 

The project sought to explore pathways for Ethiopia’s electricity system to 2065 with the use of open-source energy system models, and to develop local capacity to use and build on the models for the country’s energy planning and policy decision-support. The team adopted a participatory methodology that engaged local experts and stakeholders in the co-creation of knowledge.

Research methodology

The project activities comprised:

• Field consultations and data collection for an up-to-date database of local energy resource, technology, and power supply and demand, to develop and enhance two interlinked open-source models for Ethiopia – a least-cost energy system model (OSeMOSYS) and a geospatial model of cost-optimal electrification expansion (OnSSET).

• A stakeholder workshop to interactively develop descriptions of possible future pathways for Ethiopia’s electricity system.

• Interviews with local experts to elicit best perceptions and expectations about the drivers of future electricity demand.

• An exploration of the role of efficient technology in household electricity demand pathways, using the open-source Low Emissions Analysis Platform (LEAP), which is a bottom-up simulation model.

• A household survey to examine consumer behaviour and adoption of efficient technology in a transitioning electricity system. 1,400 urban households were surveyed to identify the impacts of electricity tariff reform on household behaviour and efficient technology adoption. This sought to understand household responses to the introduction of a new tariff structure/raised tariff rates, which the Ethiopian Electric Utility, the public-owned utility company, in cooperation with the Ethiopian Energy Authority, introduced (starting in December 2018, with subsequent annual increases to 2021).

• Use of the insights and data gathered to model scenario pathways of the electricity system (High Ambition, Ambition, Big Business, and Slow Down)

• Delivering modelling training workshops for students and local researchers across government, academia, and not-for-profit and private sectors, led by overseas and locally based project researchers, using the models developed.

• Power sector policy and governance recommendations, making use of the scenario modelling insights.

Research results, key messages, and recommendations

• The High Ambition, Ambition, Big Business and Slow Down scenarios broadly represent futures in which the circumstances for the development of Ethiopia’s power sector are either strong, weak, or inconsistent in terms of development during the period.

• It is important for Ethiopia to make plans for the diversification of its power generation sources away from a dominant reliance on hydropower if it is to secure the long-term supply of electricity that will be needed under the country’s growth ambitions. The country’s hydropower capacity is maximised in all but the most pessimistic scenarios of future demand growth.

• Under the government’s National Electrification Plan (NEP 2.0), the role of decentralised systems will fall to 6% of the population by 2030, mostly serving demands in the southeast of the country. However, there are futures where it could be more cost-effective to keep some populations off the grid beyond 2030.

• The geospatial modelling of cost-optimal electrification patterns for Ethiopia provides evidence that decentralised electricity systems have an important role to play in the country’s plan to electrify all consumers by 2025.

• There is a need to ensure a strong enabling environment for the development and sustenance of a power system that is expected to transition between various degrees of decentralised and centralised connectivity over the short, medium, and possibly long term.

• Solar photovoltaic (PV) and concentrated solar power technologies are set to play a major role in the future of the country’s power system.

• Intermittent renewables have an important role, and the team’s scenarios suggest probable higher reliance on fossil fuels, leading to rapid increases in CO2 emissions during the latter part of the period especially under High Ambition and Ambition scenarios.

• The findings are in line with the government’s plans to draw on mini-grid and off-grid systems as part of its electrification strategy. However, the scenarios show there is merit in allowing system choice to be determined by the expected spatial growth of electricity demand, which may require a varying role for mini-grid and off-grid systems in the future of the country’s power sector.

• The team reviewed the regulation and policy measures that have been successfully deployed in other countries for mini-grid deployment and found that Ethiopia has implemented many of these measures. However, despite these positive measures, the research shows that barriers to effective implementation of the established regulatory framework exist. Progress will require streamlined processes, stronger devolved institutions, and multi-stakeholder collaboration.

• In the household survey, only 30% of respondents indicated that the higher electricity tariff had no impact on their energy behaviour, 50% became more mindful of combating wasteful electricity consumption, and 42% of all respondents decreased their use of electric mitads (used to make injera, the traditional Ethiopian flat bread) and electric cookstoves. However, just 9% of respondents purchased efficient energy appliances as a response. Households indicated that two main barriers to the uptake of efficient appliances are i) the absence of product descriptions in local language and ii) product prices.

• The modelling suggests the potential of 30% in cumulative energy consumption savings by 2065 if Minimum Energy Performance Standards were fully implemented for household appliances by 2030.

• The implementation of efficient technology in the residential sector alone has the potential to reduce the required size of Ethiopia’s power system capacity by 25 GW by 2065, according to the team’s analysis. Effective implementation of policies to foster a high market composition of efficient user-friendly technologies will be an important enabler of uptake.

• The effective implementation of policies will need to be aided by strengthening local institutions.

The outputs of the project have been disseminated both locally and internationally at academic conferences and project workshops. The PATHWAYS project team continuously engaged with policy makers in Ethiopia (including the Ministry of Water and Energy, Ethiopian Electric Power, Ethiopian Energy Authority, and the Ethiopian Electric Utility) throughout the project period via project meetings, training workshops, policy briefs, presentations, and the final end-of-project dissemination workshops. Capacity development activities have equipped local researchers with the skills to train the next generation of Ethiopian energy system modellers, and have laid the foundation for energy system modellers, researchers, students, and government staff to advance the work started by this research project. Undertaking such future follow-on work in coordination and collaboration with recently started initiatives by the United Nations, other funders, and overseas research institutions, provides an opportunity for strengthened national ownership and purpose of modelling and planning.

Local partners

Addis Ababa Institute of Technology (AAiT)

Policy Studies Institute (PSI)

KTH Royal Institute of Technology (KTH)