Market Trends of Ethiopia Renewable Energy Industry
This section covers the major market trends shaping the Ethiopia Renewable Energy Market according to our research experts:
Wind Energy to Witness Significant Growth
- In 2013, Ethiopia commissioned the continent's largest wind farm at the time, the 120 MW Ashedoga plant worth USD 290 million. According to the African Development Bank, Ethiopia has abundant resources, particularly wind with a potential 10GW of installed capacity and as of 2021, Ethiopia had a total of 324 MW of installed wind energy capacity.
- The power sector is heavily dependent on hydropower in Ethiopia and faces outages due to droughts. Hence, the country is aiming to increase the share of renewables, such as wind power, to diversify the energy mix, which, the Ethiopian government believes, may help in reducing the power cuts during periods of drought.
- One of the major developments in the Ethiopian market was that the country, in collaboration with Danish Energy Agency, announced a roadmap for wind power development in Ethiopia, in 2018. The plan deals with a variety of aspects affecting the wind market in the country, such as site selection, grid, and bankable data to power sales, financing, procurement policies, and operation and maintenance. The roadmap aims to increase the private sector involvement for more realistic development of the industry and plans to increase the capacity of wind power by 1000 MW by 2025.
- As a part of this program, in September 2020, Denmark announced that it may co-finance a 100MW wind project in Ethiopia. Denmark is expected to cover almost half of the investment required for the project, i.e, USD 94.4 million. The project is scheduled for commissioning by 2023.
- Such tremendous support on behalf of public and private organizations to increase the wind power capacity is expected to have a positive impact on the growth of the Ethiopian Renewable Energy market during the forecast period.
Understand The Key Trends Shaping This Market
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Upcoming Renewable Energy Projects Expected to Drive the Market
- Ethiopia is the second-largest economy in Eastern Africa and has been continually seeking investments from other countries across the globe for the development of renewable energy manufacturing facilities.
- In 2021, Ethiopia's total installed solar capacity was 20 megawatts (MW), which is comparatively higher than the 10 megawatts (MW) installed in 2015. Moreover, the government planned to increase solar installations in the future rapidly. This is likely going to drive the renewable energy market during the forecast period.
- In June 2020, Lotus Energy Cooperative won a contract to build a solar complex combining solar, battery storage, and waste-to-energy capacity in Ethiopia. The 500 MW facility is expected to power the infrastructure of the Ethiopian conglomerate Effort Group (Tigray Rehabilitation Endowment Fund). The project has an investment cost of USD 4.3 billion.
- Moreover, in December 2020, Sino Soar, with its consortium, won the bid for the 25 Villages Solar PV-Diesel-Battery Micro-grid EPC project in Ethiopia. The project is funded by the African Development Bank and includes 2MWp PV, 5.5MWh Battery Energy Storage System, 450kW Diesel Gen-set, and Energy Management System.
- Hence, owing to the above points, upcoming renewable energy projects in Ethiopia are expected to drive the renewable energy market during the forecast period.
