FOSSIL FUELS AND RENEWABLE ENERGY – THE

ZANZIBAR CASE STUDY

A B O U D S . J U M B E , P O L I C Y P L A N N I N G & R E S EA R C H U N I T,

D E PA R T M E N T O F E N V I R O N ME N T, T H E F I RS T V I C E P R E S I D E N T ’ S O F F I C E ,

G O V E R N M E N T O F Z A N Z I B A R , T H E U N I T E D R E P U B L I C O F TA N Z A N I A

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The United Republic of Tan-Zan-ia

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The Islands of Zanzibar (Unguja and Pemba)

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General Information Population: 1.3. Million People

Area: 2,654 Square Kilometers of Land Capital: Zanzibar Town Heritage Site: Stone Town Official Language: Swahili; English GDP (US$) in 2013: 893.4 Million GDP per capita (USS) in 2013: 667 Economy: Tourism, Agriculture, Fisheries Total Debt: by 2010: US$ 100 Million. Unemployment: 17.1% (Age:15-35) People living BPL: 44% Inflation Rate (%) in the past 5 years: • 8.9(2009), 6.1(2010), 14.7(2011),

9.4(2012), 5.0(2013)

Growth Rate (%) in the past 5 years • 6.1(2009), 6.4(2010), 6.6(2011),

7.1(2012), 7.4(2013).

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ENERGY SECTOR GOVERNANCE STRUCTURE IN ZANZIBAR

MINISTRY OF LANDS, HOUSING, WATER AND ENERGY

ZANZIBAR ELECTRICITY CORPORATION (ZECO)

PETROLEUM COMPANIES

PRIVATE SECTORS AND NGOs ( ENERGY

DEVELOPMENT ON RE/EE/DR)

DEPARTMENT OF ENERGY AND MINERALS (DoEM)

DEVELOPMENT UNIT FOR RENEWABLE ENERGY; ENERGY MARKETING;

PETROLIUM EXPLORATION

ZANZIBAR UTILITIES REGULATORY AUTHORITY

(ZURA)

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ENERGY SUBSIDIZATION AND PRICE CONTROL – THE ZANZIBAR ENERGY POLICY

1. To subsidize for stimulating investments in and production of renewable energy sources,

2. To facilitate access to modern energy products and services,

3. To enable the poor to access affordable energy technology

4. To control energy prices

5. To apply instruments for price control.

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ENERGY BALANCE IN ZANZIBAR: SOURCES AND SECTORS - BIOMASS

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OVERALL GHG EMISSIONS IN ZANZIBAR

ACTUAL CALCULATED EMISSIONS PROJECTED GHG EMISSIONS 2010 - 2030

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ENERGY SECTOR - EMISSIONS INVENTORY AND PROJECTIONS

GHG EMISSIONS FROM THE ENERGY SECTOR IN ZANZIBAR

BASELINE ENERGY PROJECTIONS FOR DOMESTIC SECTOR IN ZANZIBAR 2007- 2030

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FORESTRY AND TRANSPORT SECTORS ARE THE TWO KEY FORCES INFLUENCING THE ENERGY SECTOR IN

ZANZIBAR FORESTS ARE DISAPPEARING THE THE CURRENT

REDD PROJECT INTENDS TO CONSERVE MORE THAN 60,000 HA OF COMMUNITY FORESTS

EXPANSION OF TOURISM SECTOR IN ZANZIBAR HAS CAUSED AN UNCONTROLLED IMPORT OF VEHICLES

ON THE ROAD PUSHING COST OF FUELS UP.

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Key Energy Challenges

Biomass energy accounts for over 90% of final energy consumed. This has caused serious impacts on Forest Ecosystems.

Power demand is imposing pressure on existing installed capacity.

Zanzibar does not generate own power since 1979. Pemba was connected in 2010. Two Undersea Cables from mainland Tanzania (to Unguja and Pemba) supported by USA and Norway. Japan is supporting power distribution systems.

Growing demand for fossil fuels from Transport Sector and Tourism (Resort Generators and other Services.

So far there is no installed Renewable Energy system (Only out-of-grid small scale and NGO initiatives) e.g. CFI Canada, Barefoot College India; ZASEA – Germany.

ZECO suffers from 100% heavy reliance on mainland, subsidies, power losses, and lack of financial and planning architecture towards renewable energy targets.

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ELECTRICITY CONSUMPTION AND DISTRIBUTION IN ZANZIBAR

MONTHLY ELECTRICITY CONSUMPTION DISTRIBUTION OF SALES BY SECTORS

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HOUSEHOLD ENERGY USE SURVEY IN ZANZIBAR 2010/2011 – Biomass Challenge

Source of Fuel Rural Urban Total

2004/05 2009/10 2004/05 2009/10 2004/05 2009/10

Electricity 0.4 0.4 2.8 1.5 1.3 0.9

Gas 0.0 0.1 0.0 0.3 0.0 0.2

Bio gas 0.0 0.2 0.0 0.0 0.0 0.1

Paraffin 1.5 0.8 3 2.4 2 1.5

Charcoal 5.0 7.7 49.1 52.4 21.2 26.2

Firewood 92.8 90.7 44.3 42.7 75.0 70.8

Others 0.1 0.1 0.4 0.7 0.2 0.3

Total 100.0 100.0 100.0 100.0 100.0 100.0

Total Households 120,626 136,059 70,053 96,452 190,679 232,511

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ENERGY COST IN COOKING – DILEMMA ON COST PREFERENCES VS EFFICIENCY OF COOK STOVES

Energy source Unit of measure Cost per

unit (US$)

Energy value

per unit (MJ)

Cost per MJ

(US$)

Typical stove

efficiency

Cost of energy

delivered to the pot

(US$/MJ)

Firewood kg 0.07 15.5 0.00 16% 0.02

Charcoal kg 0.34 29 0.01 22% 0.05

Electricity kWh 0.12 3.6 0.03 55% 0.06

Kerosene litre 1.1 34 0.03 40% 0.08

LPG kg 2.4 45 0.05 50% 0.10

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FUTURE POWER CHALLENGES FOR ZANZIBAR – WHY CURRENT BASELINE SCENARIOS PROJECT ENERGY CRISIS

FOR TOURISM INDUSTRY PROJECTED CONSUMPTION, DEMAND,

CAPACITY POWER TARIFFS FOR ZECO AND TANESCO

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COST ON INFRASTRUCURE IN THE PAST FIVE YEARS – EXTERNAL SUPPORT FOR ENERGY EFFECIENCY AND

RENEWABLES Government of Norway – Undersea Cable from mainland Tanzania to Pemba Island

Total Cost: US$ 50 Million

Contribution: US$ 16.9 Million was contributed from the Zanzibar and the Union Governments

Capacity: 25 MW for the next 20 – 25 years under current baseline scenario.

Length of the Cable: 78 Kms - at some point the greatest undersea depth was over 800 meters.

Government of Zanzibar: - Purchase of the Backup Generators with total capacity of 25MW.

Cost: Running Cost during the power crisis in 2010 went up to over US$ 600,000 under two months. The backup generators were shut down due to inability of ZECO to afford the running costs.

The United States of America: Millennium Challenge support: Undersea Cable replacement. Installation of a new 100 MW Cable from Dar es Salaam to Zanzibar Island. (Replacing the old 45 MW)

Cost: US$ 55 Million – Approx US$ 2.4 Million was contributed by the Zanzibar Government

The cable can now withstand the current peak demand of 58.3 MW.

Last Week, the European Union agreed to support Non State Actors on Renewable Energy – US$ 8.3 Million.

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ZECO TARIFFS FOR CONSUMERS – JUNE 2012 AND NOVEMBER 2013 : UNLOADING THE TARIFF BURDEN ON

DOMESTIC USERS – ECOSYSTEM CRISIS TO DEEPEN

TARIFF CATEGORY

ENERGY CHARGE (Unit) - TSH/kwH

US$ CENTS/kWh

Z0-Residential <50 66 4.1

>50 168 10.5

Z1-General Service

<2000 161 10.1

>2000 218 13.6

Z2-Small Industries

<5000 172 10.8

>5000 213 13.3

Z3- Large Industries

<10,000 169 10.6

>10,000 141 8.8

Z4- Street Lights All Units 141 8.8

TARIFF CATEGORY

ENERGY CHARGE (Unit) - TSH/kwH

US$ CENTS/kWh

Z0-Residential <50 66 4.1 -

>50 400 25.0 138%

Z1-General Service

<2000 222 13.9 38%

>2000 800 50.0 267%

Z2-Small Industries

<5000 172 10.8 -

>5000 213 13.3 -

Z3- Large Industries

<10,000 169 10.6 -

>10,000 141 8.8 -

Z4- Street Lights All Units 222 13.9 -

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TARIFFS AND DEBT ISSUES BETWEEN ZECO AND TANESCO

TANESCO categorizes ZECO under the so-called Customers connected at High Voltage. TANESCO supplies up to 60 MW of electricity to Zanzibar.

The Existing Tariffs are as follows:

- Service Charge = TSH 14,233 per Month (approx: US$ 8.78)

- Energy Charge = TSH 106 per kWh (approx.: US$ Cents 6)

- Maximum Demand Charge = TSH 1,079 per kVA per Month. (approx. US$ Cents 66)

TANESCO wants the Energy Charge raised to TSH 159/kWh by 2015 (approx.: US$ Cents 9)

TANESCO wants Maximum Demand Charge raised to TSH 16,550/kVA/month by 2015. (US$ 10.2)

TANESCO says ZECO owes it TSH 70 Billion. (US$ 43.2 Million). Threatens to cut off if not paid!

ZECO says they owe TANESCO TSH 44 Billion (US$ 27 Million) . That the Union Government should contribute TSH 18 Billion (US$ 11 Million) under P.A.Y.E System.

On the average, ZECO is supposed to pay TSH 3.4 Billion (US$ 2.1 Million) to TANESCO on a monthly basis.

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ALTERNATIVE FUELS AND OPTIONS IN ZANZIBAR

LPG

- Started under REDD Pilot Project funded by Norway and implemented by Care International with Department of Forestry and Non Renewable Natural Resources in Zanzibar.

- Began with import of 10 tons a month in 2010 to 100 Tons a month by the end of 2011

- LPG still provides 0.5% of the cooking energy in Zanzibar

- Under current baseline scenario, an estimated 200,000 tons of LPG costing over US$ 200 Million would be required annually to REPLACE all firewood and charcoal

Wind Generation: Study done on south-east. Potential for 15 MW. Wind Speeds: 7.7 m/s (30 meters above the surface terrain). The use of 600 kW Turbines. A Farm of 25 Turbines. Production cost of 11 US$ cents/kWh.

Home Solar PV Systems: Case Study - Community Forest International – Remote Islets and location in Pemba (Total PV Array: 3290 W): Total Energy Capacity: 32.8 kWh; Total Inverter Power: 10.8 kWh.

Biogas: Danish Support (DANTAN) along with Dutch SNV -Tanzania Domestic Biogas Program. Small Scale.

Improved Cooking Stoves (ICS): various small scale programs. Various NGOs.

Briquettes: Under trials. Small Scale. Various NGOs

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IN CONCLUSION Zanzibar needs heavy financing and major revamp of its energy policy and planning

framework to match that which was proposed under the goals of Rio +20

The Energy Reforms should come in the context of an array of policy synergies including Sustainable livelihoods, Fisheries, Agriculture, Forestry, Transportation and Tourism Sectors.

Need to develop targets in RE Goals. (Explore more of the marine potential e.g. the Wave Energy) Zanzibar carried out Wave Energy feasibility study along with the Israeli Energy Firm in 2010.

Enhance our regional commitments along with the Indian Ocean Commission programs, the ISLANDS Project for the SIDS of the regions; the WIOCC, and the UN Sustainable Development initiatives in the region.

UNOSD could directly help by supplying its long technical expertise by assisting the Energy Ministry in Zanzibar on the targets along the lines of official SIDS. Low Carbon Development is inevitable.

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Acknowledgement 1. A large proportion of this work is based on the Report: Economic Impact of Climate Change in Zanzibar. The Climate

Study was led by the Global Climate Adaptation Partnership (GCAP), working with local partners (State University of Zanzibar -SUZA, and Institute of Marine Sciences - IMS), with funding from UK (DFID) Government. It has been commissioned under DEW Point, the DFID Resource Centre for Environment, Water and Sanitation which is managed by a consortium of companies led by Harewelle International Limited. Authors: Paul Watkiss, Steve Pye, Gerard Hendriksen, Andrew Maclean and Muriel Bonjean. Global Climate Adaptation Partnership, Narriman Jiddawi, Yohanna Shaghude IMS, Mohammed A Sheikh and Zakaria Khamis, State University of Zanzibar.

2. Acknowledgements and sources :

◦ Gerard Hendriksen for his extra inputs for the slides; and for sharing the work on Potential Energy Technologies and Services in Zanzibar and Their Potential for Carbon Credit (Done under ZABACCO Research Consultancy).

◦ Jeff Schnurr of the Community Forest International (CFI) for his inputs on the Solar Energy Projects in Pemba.

◦ Bakari Makame of the Office of the Chief Government’s Statistician for the Zanzibar Economic Survey 2013 Data.

◦ Haji Zubeir from the Department of Transportation and Licensing, Zanzibar, for his support on Modal Transport Data.

◦ Daily News Article dated 18th January 2014: http://www.dailynews.co.tz/index.php/local-news/27123-zanzibar-utility-firm-queries-tanesco-s-over-70bn-debt

◦ Zanzibar Energy Policy 2009

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THANK YOU

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