Optimizing renewable-based energy supply options for power generation in Ethiopia

Abstract

Ethiopia unveiled homegrown economic reform agenda aimed to achieve a lower-middle status by 2030 and sustain its economic growth to achieve medium-middle and higher-middle status by 2040 and 2050 respectively. In this study, we evaluated the optimal renewable energy mix for power generation and associated investment costs for the country to progressively achieve upper-middle-income countries by 2050. Two economic scenarios: business as usual and Ethiopia’s homegrown reform agenda scenario were considered. The study used an Open Source energy Modeling System. The model results suggest: if projected power demand increases as anticipated in the homegrown reform agenda scenario, Ethiopia requires to expand the installed power capacity to 31.22GW, 112.45GW and 334.27GW to cover the current unmet and achieve lower, medium and higher middle-income status by 2030, 2040 and 2050 respectively. The Ethiopian energy mix continues to be dominated by hydropower and starts gradually shifting to solar and wind energy development towards 2050 as a least-cost energy supply option. The results also indicate Ethiopia needs to invest about 70 billion US$ on power plant investments for the period 2021–2030 to achieve the lower-middle-income electricity per capita consumption target by 2030 and staggering cumulative investment in the order of 750 billion US$ from 2031 to 2050 inclusive to achieve upper-middle-income electricity consumption rates by 2050. Ethiopia has enough renewable energy potential to achieve its economic target. Investment and financial sourcing remain a priority challenge. The findings could be useful in supporting decision-making concerning socio-economic development and investment pathways in the country.