By Paul Spitsen
I. Statement of Issue:
U.N. Secretary General Ban Ki-moon, in a U.N. presentation about the importance of electricity, emphasized that access to electricity “is the golden thread that connects economic growth, increases social equity, and preserves the environment.”(U.N. News 2012).
The International Energy Agency (IEA) reported in their World Energy Outlook 2011 report that only 13.9 percent of the total Tanzanian population has access to electricity, leaving 37.7 million people without access to electricity in their daily lives. Eighty percent of the Tanzanian population is reported to live in rural areas and only two percent of this population has access to electricity; thus, after sundown an individual’s level of productivity and quality of life decrease significantly (Camco). This lack of access for the majority of Tanzania’s population represents a significant barrier to any attempt at sustained national growth and development. Electricity can serve as a catalyst for the development of human capability potential, as well as economic growth potential. Readily available electricity allows students the freedom to study at night, with the potential to work during the day. Electricity allows schools to operate computers and have access to the Internet, thereby allowing greater access to information and techniques that can enable individuals to improve their lives. Electricity can also expand the nation’s information, communications, and telecommunications (ICT) capabilities. A new, growing part of African society would benefit from increased access to technology-based solutions such as online banking, health care information and smart-phone based educational resources that would overcome deficiencies in the public service sector by providing individuals in rural areas with the opportunities to charge and operate cellular smart phones from either their homes or a communal charging station in their village instead of relying on underfunded and inefficient government programs.
All of these possibilities, if addressed with access to reliable sources of electricity, could expedite the achievement of the eight U.N. Millennium Development Goals – internationally agreed upon goals that aim to eliminate extreme poverty and slow the spread of HIV/AIDS while providing universal primary education that can alleviate the problems that plague rural Tanzania today.
In order to promote rural electrification, UN ENERGY, in partnership with the Tanzanian government, Tanzanian Electrical Supply Company Limited (TANESCO), and the World Bank, should work with leading global industrial suppliers of solar and wind powered systems to bring high quality solar systems to rural cooperatives. These cooperatives can in turn offer sustainable and reliable independent solar-powered electrical grids to rural Tanzanian households and communities. The following policy brief will outline the problematic history of rural electrification in Tanzania. It will examine past electrification policy attempts by TANESCO and the Tanzanian Rural Electrification Agency, and, finally, propose a policy that outlines the creation of independent solar and wind powered electrical grids to provide rural access to electricity in Tanzania.
II. History of Problem:
Since attaining independence in 1964, Tanzania’s energy production has been dominated by the government. The state energy provider, TANESCO, has been plagued from its inception by insufficient capital, lack of technological know-how, poor management, logistical constraints and corruption. Therefore, it has been unable to create a sufficiently reliable nationwide network that can adequately service all of the nation’s citizens, especially those located in the rural areas.
The dilapidated state of Tanzania’s electrical infrastructure was revealed in 2006, when a severe drought decreased the flow of water needed to operate the nation’s hydroelectric plants, causing rolling blackouts that crippled the nation’s already fragile economy. This event forced the federal government to focus their money and development efforts on diversifying their electrical production capabilities, instead of spending the necessary funds to effectively implement a plan that could address the rural electrification problem. Tanzania tried to address its lack of energy production by partnering with international donors, financial institutions and private enterprises to diversify its electrical production, increase the output and reliability of its services, and expand the national grid into rural areas. To do this, Tanzania accepted loans from the World Bank’s Energy Sector Management Program (ESMAP) in exchange for the partial privatization of its state-run energy provider TANESCO. The result of this structured adjustment program was the creation of two independent power providers (IPPs), Songas and Independent Power Tanzania Limited (IPTL), that were intended to work with TANESCO to increase electrical reliability, production and access (Gratwick et al. 2006). However, both IPPs’ production capabilities were based on the importation of fossil fuels from the global market, diesel for IPTL and natural gas for Songas. Both power producers were unable to increase production or the ability to provide access to the rural markets due the high cost of importing fuel and the insufficient capital and know-how to expand the national grid into the periphery of Tanzania.
As it currently stands, the majority of the rural population of Tanzania does not have access to any form of electricity to light their homes, aid in the education of their children or increase their productivity. The majority of rural homes light their houses and cook their food with bio-fuels—charcoal or wood—gathered from their local environment, while their electrical devices are powered by portable diesel generators that require fuel to be imported from large towns and urban centers. This makes the illumination of homes and the operation of electrical equipment extremely costly and inefficient. The cost of lighting one home, due to the continuous need for kerosene refills, can sometimes account for as much as 25 percent of a family’s total yearly expenditure, thereby diminishing their ability to have a monetary surplus in case of economic hardships or to invest in training or technology that could increase their human capital and capabilities (Adkins et al. 2009).
The constant need for fuel also intersects with gender roles. Currently women and children spend a large portion of their time collecting firewood and water for domestic chores; however, the addition of cheap, reliable electricity would allow them to spend less time searching for fuel sources and increase their capability to enhance their human potential and economic prosperity.
The inability to light communities also increases the risk of theft and feelings of insecurity. Independent solar grids, however, could power streetlights at night, decreasing the likelihood of theft and making communities safer and more secure (Adkins et al 2009). Furthermore, replacing kerosene lamps in homes will decrease health costs associated with poor air quality and remove the possibility for accidental fires that lead to injuries, property damage and deaths (Adkins et al. 2009). Moreover, due to the severity of the dry season in Tanzania, there is intense resource competition over water that forces the government and its communities to choose between water use for agriculture, consumption or electrical power production.
III. Critique of Past and Existing Policies:
Tanzania has attempted two different energy policies, each with a relative degree of effectiveness in combating the problem of rural electrification. The first policy focused on the creation of cooperatives—funded by the state and private financiers—that ran independent grids which operated part-time and were powered by diesel generators. The second policy focused on the expansion of the national electrical grid into the nation’s periphery. This was lead by TANESCO through the Tanzanian Rural Energy Agency (REA) and was financed by various international donors.
In 1993, the Tanzanian government and TANESCO created Urambo Electric Consumers Co-operative Society (UECCO) to serve as a model for future rural electrification efforts (Ilskog et al. 2005). The UECCO cooperative ultimately was able to accomplish the refurbishment of one diesel generator and, with the help of SIDA and SEI, it produced a maximum of 108 kW that was only available to generate electricity after 7 p.m. on a daily basis. In 2002, the project was analyzed and it was found that consumers reported only moderate levels of satisfaction. It was evident that there were serious shortcomings in Tanzania that were due to a “combination of inadequate technical knowledge and a shortage of funds for maintenance.” (Ilskog et al. 2005, 1302). Another concern blocking the scale-up of the energy policy was that “consumers were reluctant to pay any more than was absolutely necessary to maintain their service and that any proposals for accumulation of funds for ‘future needs’ were met with skepticism. Such skepticism is very understandable if the affairs of the co-operative are not considered being transparent.” (Ilskog et al. 2005, 1306).
In 2008, Tanzania was the recipient of the world’s largest Millennium Challenge Compact Grant, worth $698 million, with an explicit goal of funding “electricity service and coverage through the addition of new power generation, transmission and distribution capacity, as well as through much needed reinforcement of the existing network.” (Millennium Challenge Corporation). TANESCO and the Tanzanian government utilized this money in order to create a new bureaucratic entity called the Rural Energy Agency, whose sole purpose was to create, test the feasibility of and fund effective energy programs that increased rural access to electricity. The Tanzanian REA’s future strategy in 2010/2011 focused on “expanding project financing sources, improving the monitoring and evaluation indicators, capacity of development, and the cutting of operational and capital costs for the Agency.” (REA 2010, 19). In conjunction with these plans, TANESCO hoped that “grid extension projects for rural electrification, off-grid projects, schemes to be electrified under the Kilimo Kwanza initiative, and the implementation of Lighting Rural Tanzania Competition projects,” could significantly reduce the percent of the population denied any access to electricity (REA 2010, 19). These ambitions were embodied by the REA’s implementation of a Camco solar power electrification model. Camco’s Clusters Solar PV Project objective, in cooperation with the REA and the Tanzanian Ministry of Energy and Minerals, was to install 1,000 solar systems in rural Tanzanian homes. Rural citizens could purchase the solar systems through a financial plan whereby “Tanzania’s Rural Energy Agency would provide a small 20% subsidy for each solar set-up system while the farmer paid the remaining 80% (a 20% deposit with the remaining amount being paid off over the following three years).” (Camco). However, Camco has identified substantial hurdles to overcome before the system can be implemented on a large scale. Financial credibility, economic insecurity and lack of large-scale partnerships between solar system producers and the Tanzanian marketplace are cited as the main points of concern in Camco’s proposed policy (Camco).
IV. Policy Recommendation:
A top-down model of electrification, with the Tanzanian state increasing its electrical production capacity as well as the size of its distribution network, is too costly, slow and unreliable to be considered a viable option for providing reliable power to rural Tanzanians at this time. Instead, UN ENERGY, incorporating the model laid out by the Millennium Villages Project, proposes a bottom up-approach to rural electrification. Rather than focusing on donations and cooperation at the government and ministry level, this policy proposes that donor funds and cooperation should be engaged at a localized community level. Rural communities should work hand in hand with U.N. Millennium Villages Project officials to coordinate the creation of energy cooperatives in their communities. The role of these cooperatives would be to coordinate the acquisition of high-tech solar and wind energy systems with global producers in conjunction with the United Nations, in order to initiate the process of obtaining high-efficiency solar and wind systems at a lower bulk rate cost. The local cooperative is then able to distribute the sustainable energy systems to local vendors at a lower cost, allowing them to in turn sell the systems to the public at a reasonable cost, given the relative poverty of rural Tanzania. Depending on the amount of absolute capital available in the marketplace, initial implementation costs of sustainable energy sources could be subsidized by the government and/or donor agencies to ensure that these technologies serve as a legitimate alternative to conventional sources of electricity in local markets (Barry 2010).
With the flow of solar and wind systems from private producers to public consumers in place, the next step in the implementation process is training local partners in the technical, installation and maintenance requirements for each system. The cooperatives, with assistance from U.N. personnel, can aid in training members of the community and vendors of solar and wind systems in the proper procedures necessary to run, install and maintain the electrical systems. With this information local communities are able to sustain their own systems and also have the knowledge to sell their services to neighboring communities.
The independent grid system can be modified to fit the needs of each individual applicant either at a home or village level, depending on the population density and relative nuclear nature of each particular village. If homes are spread out, a local vendor working with the U.N.-run cooperative could provide the option of a single photovoltaic system that incorporates one solar cell, a battery array and a conversion box to deliver the electricity in useable current. A small system like this could power home lights, charge cell phones and run small household utilities to cook or increase economic productivity. All these new capabilities would reduce a family’s or individual’s expenditure of fossil fuels, reduce the likelihood of accidental fire and decrease the likelihood of theft, while increasing overall quality of life in Tanzania. If a particular village has a greater population density, a larger scale independent energy system could be installed. This system would utilize either an array photovoltaic cells or wind turbines to generate power that would be stored in an industrial battery bank connected to a current converter. This converter could be tapped by residents to power lights, wells, appliances, etc. Access to this electrical system would be controlled by a pay-as-you-go program run from individuals’ cellular phones.
This system has been tested in the field and has displayed positive results. A Millennium Village Project prototype in Ruhiira, Uganda installed an independent solar-powered electrical grid in conjunction with the creation of a local energy cooperative, the United Nations and a private company called SharedSolar. SharedSolar represents an existing model for pay–as-you-go electrical billing that reduces cost. This service allows these solar-powered independent grids to generate a steady stream of revenue relative to their use, thus offsetting their maintenance cost with user fees (Mroz 2012). People in these communities experience the tangible effects of electrification in their everyday lives. “SharedSolar households now spend on average 12,000 UGX (approx. 5 USD) on their energy needs per month,” which is a significant decrease from their previous expenditures on kerosene for lighting or diesel for electric generators (Mroz 2012). Mr. Byarugaba, a resident in Ruhiira, explained the effects of the independent solar grid thus: “The standard of living has improved, whilst the cost of living has gone down. People know they are lighting their pockets, so they make sure to turn off the lights when they are not using them.” (Mroz 2012).
How could the policy of installing independent solar and wind power electrical grids affect the lives of rural Tanzanians and larger development in their nation? First, readily available electricity would increase an individual’s and community’s level of productivity: students can study longer and utilize computers and the Internet; shops can stay open later while operating more efficiently by making use of technological innovations; women and small children can play a decreased role in the collection of fuel from the environment; and security can increase by lighting streets at night to deter would-be thieves. More importantly, electricity can bring a level of equity to homes and communities in rural Tanzania by allowing them freedom to access information to make them more competitive in terms of human capital and economic productivity relative to other areas in Africa and the global marketplace. On a larger scale, the United Nations’ Millennium Villages Project model would also have a positive effect on the environment by decreasing deforestation, soil erosion and desertification, thereby limiting the degradation of fragile ecosystems and minimizing the release of carbon based greenhouse gases (Barry 2010).
Independent solar and wind power electrical grids reduce the need for costly large-scale power production plants and grid extensions. They offer cheap, reliable sources of electricity that can offer rural Tanzanians the freedom to develop new capabilities to increase their quality of life and economic prosperity. Previous policies have been ineffective in delivering the level of electrical production, access, or potential for long term economic sustainability needed in capital-dependent areas of rural Tanzania. The adoption of UN ENERGY’s policy proposal outlining the implementation of independent solar and wind power electrical grids to provide rural access to electricity in Tanzania would provide an immediate impact and help catalyze development in rural Tanzania.
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