Ethiopia participates in the SREP Scaling-Up Renewable Energy Program (SREP) Investment Plan funded by the Climate Investment Fund. The SREP is embedded in the Growth and Transformation Plan (GTP) which has three broad goals. First, it aims to increase power generation capacity up to 22 GW in 2030 with an intermediate target of 10 GW in 2015. Next, it plans to increase electricity coverage from 60% in 2015 to 90% by 2020 (Federal Democratic Republic of Ethiopia, 2016). Finally, the government also plans to become an exporter of electricity and a green hub in East Africa in the near future (REEP policy database, 2014), which will require investments in an extensive distribution grid.
Meeting these goals hinges on new hydropower projects, including the Grand Ethiopian Renaissance, the Gilgel Gibe III and the Gilgel Gibe IV dams, with an estimated total capacity of 9.4 GW (WEO 2014). The Gilgel Gibe III dam was completed in 2016 and will contribute to Ethiopia’s power production with 1.8 GW once running at full capacity (The Economist, 2016). Next to Gibe III, Ethiopia is building the Grand Ethiopian Renaissance Dam which will be more than thrice its size (Dale Whittington, 2016). As of 2016, only 4.2 GW of renewable capacity had actually been installed, with hydropower capacity accounting for 3.8 GW (IRENA, 2016). Failure to meet the targets of planned renewables capacity extension defined in the Growth and Transformation Plan (GTP) has been mainly caused by delays in construction plans for these three main hydropower dams.
These delays can be attributed to concerns over the sustainability of the dams, and their effect on downstream riparian states such as Egypt. There is significant disagreement between Egypt and Ethiopia over the applicability of old Nile treaties and international law (Yihdego et al. 2016). While this is a potential source of conflict it is important to note the potential benefits of the dam have brought the countries affected together to formulate a Declaration of Principles in March 2015 (Reuters, 2015). These benefits include the increased effectiveness of downstream hydropower projects, sedimentation management and minimised evaporation losses (Chekene Tesfa, 2013).
Water management in the dams and downstream flow regions of the River Nile is further complicated by high variability which is likely to be compounded by the effects of climate change (Hammond, 2013). Further, the Gilgel Gibe III dam has had a negative impact on the water level and salinity of lake Turkana in Kenya (The Economist, 2016). Reaching a permanent legal or institutional framework accepted by the affected states, which addresses the negative environmental effects will be pivotal for Ethiopia to meet the targets of the GTP.
To facilitate the investments in new renewables, a feed-in-tariff scheme is under discussion (Climate Scope, 2014). The government is fostering the development of wind turbines (1.2 GW by 2020). In the meantime, several tenders for hydro and solar projects are available for bidding (Export.gov, 2017) and the government recently announced the introduction of a tender policy for hydro and solar projects.
The majority of the population still relies on biomass to fulfil its energy needs (Mulugetta 2008), although a transition towards modern sources of energy seems promising (Guta 2014). The biomass use puts high pressure on forests, where emissions from deforestation have increased significantly over recent decades. Indeed, the most efficient way of reducing emissions is to reduce fuel-wood consumption, by using efficient stoves and modern (e.g. electricity based) cooking technologies. Emissions from forestry are projected to reach 90 MtCO2e in 2030.