Assessment of Resource Adequacy in Power Sector Reforms of Ethiopia

Abstract

Recently, the government of Ethiopia has been shaking up the power industry by introducing reforms with the hope of increasing electricity access, ensuring resource adequacy, stimulating private investment and guaranteeing financial sustainability of the sector. Restructuring of utility, liberalizing energy market, tariff revision, targeting universal access, and export market are some of the sea changes undertaken by the government. The expected return from these reforms is very high, sometimes to a level that it looks too good to be true. The study thus evaluates the effectiveness of the reforms by assessing the future generation adequacy in contrast to the growing electricity demand. An analytical method to calculate resource planning indices such as reserve margin and expected unserved energy is used. The results show that the Ethiopian power system will face about 10 TWh energy shortage in the near-future. The study begins by providing an overview of the power sector and the recent reform activities with their intentions and goals. The result of the study could be important as input for making policy-adjustments and/or revamping implementation strategies.