TANZANIA ELECTRIC SUPPLY COMPANY

LTD (TANESCO)
PRESENTATION ON THE
TANZANIAN SOLAR PV-HYBRID
WORKSHOP HELD IN BERLIN,
GERMANY
16TH MARCH 2015
by
Eng. Patrice Tsakhara
Principal Engineer Small Power Projects
22-Mar-15

Contents

22-Mar-15

Company History
Overview of power sector in Tanzania
Government policy on energy sector
Future plans of the energy sector
Development of Renewable Energies
Small Power Projects (SPP) framework
Implementation of SPP program
Current status of Isolated mini-grids
Plans for grid extension to mini-grids
Challenges to implement PV-Hybrid and
mitigation measures
Support by Germany companies
2

Company History

22-Mar-15

TANESCO was established in 1964 with shares from the

government and private.
In 1975 GoT acquired all shares making TANESCO a
state-owned power utility.
TANESCOs core business are: to generate, transmit,
distribute and supply electricity in Tanzanian mainland
and sell bulk power to Zanzibar.
TANESCO also import power from Zambia, Uganda and
Kenya for electrification of border towns.
Likewise, TANESCO also exports power for electrification
of border town on Kenyan side at Horohoro.
The company has been responsible for planning and
implementing various power investment projects.

Company History cont

1992 Energy policy allowed private sector participation in

the energy sector. Up to 2005 only generation segment has
attracted private sector.
In 1997 TANESCO was specified for privatization.
From 2002 -2006 TANESCO was placed under management
contract.
TANESCO was de-specified for privatization in 2005 to allow
investments in generation and transmission projects.
From 2006 to 2008 there was shortage of power generation
due to poor hydrology. This has lead to procurement of the
first Emergency Power Projects (EPP)
From 2011 to 2013 TANESCO experienced another
shortage of power generation due to poor hydrology.
Procurement of costly EPPs was then undertaken.

22-Mar-15

Overview of the power sector

Generation capacity in the interconencted

grid system:
Total Hydros: 561 MW
Total gas fired power plants: 544 MW (only 320 MW is
generating power at the moment due to shortage of
natural gas)
Total liquid fuel fired power plants: 210 MW with 50 MW
capacity on short term rental basis
Total of 18 isolated mini-grids with total installed capacity
of 82 MW. Out of these two mini-grids with installed
capacity of 29 MW is running on natural gas while the
remaining 15 mini-grids with total installed of capacity of
53 MW are diesel generators.

22-Mar-15

Overview of the power sector

cont

Transmission network:
Transmisison system comprises of 48 grid
substations interconnected by transmisison lines.
2732 km of 220 kV lines
1555 km of 132 kV lines
578 km of 66 kV lines

Distribution network:

22-Mar-15

Comprises of 33 kV, 11kV, 0.4kV lines.

11,124 distribution transformers
17,021 km of 33kv lines, 5,375 km of 11kv lines
Over 34,513 km of LV lines

GoT policy on energy sector

22-Mar-15

The National Energy Policy of 2003: Has allowed

private sector participation in the energy sector.
The Electricity Act of 2008: Has allowed private
sector to participate in the electricity sub sector. This
includes generation, transmission and distribution of
electric energy to the end users.
Following the above act, the government through
EWURA took initiative on the development of Small
power Projects (SPP).
Standardized Power Purchase Agreements (SPPA) and
the Guidelines where adopted to facilitate private
sector participation in developing renewable energies
in small scale (0.1 MW to 10 MW) for direct sell to end
use customers and sell excess to TANESCO network.
7

GoT policy on energy sector cont..

The Electricity Supply Industry Reform Strategy and
Roadmap (2014-2025):
Aims at restructuring of the sector. By July 2017
Generation will be separated from the rest of TANESCO
By July 2021 Transmission will be separated from
Distribution.
By July 2023 there will be horizontal unbundling of
Distribution.
The draft Renewable Energy policy of 2015:
The draft policy was recently prepared by GoT and circulated
to stakeholders for comments.
The draft Energy Policy of 2015:
The draft was recently prepared and circulated to
stakeholders for comments.
22-Mar-15

Future plans of electricity sector

Generation expansion plan:

In the short term period (now to 5 years) power

generation projects will be implemented. Technologies
involved are natural gas, wind and solar PV. Over 1000
MW is expected to be added in the Grid system.
Transmission expansion plan:

In the short term period transmission projects will be

implemented for power evacuation to the load centers
from generation centers. This will also include 400 kV
interconnector lines between Zambia, Tanzania, and
Kenya. Also 220 kV interconnector lines between
Tanzania, Uganda, Mozambique and Kenya. Development
Partners (DP) are currently financing some of these
projects and others have shown interest to finance new
projects including KfW of Germany.
22-Mar-15

Development of Renewable
Energies (RE)

22-Mar-15

In the recent years there has been strong interest for

private sector to invest in RE power projects, especially
wind and solar PV.
Since the Government didnt have RE policy in place,
there is no conducive environment including incentives
to attract private sector investment in RE power
projects.
There are two potential sites for wind power, that is
Sing Ida in central part and Makambako in southern
part of the country.
Potential sites for solar PV are areas in the central and
western part of the country (Dodoma, Singida,
Shinyanga, Mwanza).
Limited penetration of RE in the grid system is
challenging factor.
10

Small Power Projects (SPP)

framework

22-Mar-15

In 2009 the Government through Energy and Water

Utilities Regulatory Authority (EWURA) approved SPP
framework.
RE projects (mini hydro, biomass, solar PV and wind)
with capacity range between 0.1 MW to 10 MW per
project were allowed to be developed.
Standardized Power Purchase Agreement (SPPA),
Standard Tariff calculation Methodology (STM) and
technical guidelines on the grid integration of SPPs were
approved.
Total installed capacities of SPPs are limited to 10% of
the grid capacity.
For almost 6 years now since introduction of SPPs only
mini hydro and biomass power projects are in operation.
11

Small Power Projects (SPP)

framework cont

22-Mar-15

Determination of SPP tariff is based on the avoided cost

principle to TANESCO.
The applicable tariff did not attract investors in wind and
solar PV power projects due to the low tariff by then and
the fact that the cost of solar equipment were high.
Economies of scale for investment in wind and solar
power projects under SPP arrangement may also have
contributed less response from the private sector.
Payment of SPP tariff in local currency instead of US
Dollar also hindered the interest of developers.
Since 2009 to January 2015 depreciation in local
currency has been high (above 20%). This has a negative
effect on the SPP developers who would have used
foreign currency to invest in power projects.
12

Status on the implementation of

SPPs
SUMMARYOFSPPDEVELOPERS

1 TANWAT - Njombe

EXPORT
SPPA
COD/
TECHNOLOGY CAP. LOCATION
SIGNED EXPECTED
(MW)
Biomass
1.5
Grid connec. 17.09.2009 15.06.2010

2 TPC - Moshi

Biomass

9.0

Grid connec. 06.10.2009

13.09.2010

3 Mwenga - Mufindi

Hydro

4.0

Grid connec. 19.01.2010

21.09.2012

4 Ngombeni - Mafia Island

Biomass

1.5

Off Grid

19.01.2010

11.02.2014

5 AHEPO - Mbinga

Hydro

1.0

Off Grid

25.02.2013

Mar-15

6 St. Agnes Chipole - Songea Hydro

7.5

Off Grid

11.01.2013

Jul-15

7 NextGen Solawazi - Kigoma Solar

5.0

Off Grid

16.01.2013

8 EA Power Ltd - Tukuyu

Hydro

10.0

Grid connec. 25.02.2013

9 Darakuta - Manyara

Hydro

0.24

Grid connec. 16.11.2013

10 Mapembasi - Njombe

Hydro

10.00

Grid connec. 15.01.2014

SPP NAME

TOTAL CAPACITY
22-Mar-15

Jun-15

49.74
13

Status on the implementation of

SPPs
SPP NAME

TECHNOLOGY

SELL CAP.
LOCATION LOI DATE
MAX
(MW)

1 Nkwilo project - Sumbawanga Hydro

2.9

2 Ilundo power project - Tukuyu

Hydro

0.4

Grid connec. 11.03.2013

3 Maguta power project - Kilolo

Hydro

2.5

Grid connec. 23.10.2013

4 Luganga project - Iringa Rural

Hydro

2.8

Grid connec. 23.10.2013

5 Luswisi project - Ileje, Mbeya

Hydro

4.7

Grid connec. 23.10.2013

6 Yovi project - Kilosa

Hydro

2.0

Grid connec. 31.12.2013

7 Ilungu ward project - Mbeya

Hydro

5.0

Grid connec. 31.12.2013

8 Momba power project- Mbeya Hydro

10.0

Grid connec. 25.02.2014

9 Kikuletwa II project - Hai Kili

Hydro

7.5

Grid connec. 20.05.2014

10 Ilondo project - Mufindi

Hydro

10.0

Grid connec. 16.09.2014

11 Lyamanji hydropower Makete

Hydro

2.3

12 Waste to Energy project

Biomass

5.0

22-Mar-15

Off Grid

Off Grid

12.02.2013

16.09.2014

Grid connec. 24.09.2014

14

Status on the implementation of

SPPs
SPP NAME

TECHNOLOGY

SELL CAP.
LOCATION
MAX
5.0
Off Grid

LOI DATE

13 Lwega hydropower project

Hydro

14 Mpanga Hydropower project

Hydro

5.8

Grid connec. 07.10.2014

15 Mkumbara biomass project

Biomass

5.0

Grid connec. 06.11.2014

16 Mabuki solar power project

Solar PV

10.0

Grid connec. 12.12.2014

17 Kishapu solar power project

Solar PV

10.0

Grid connec. 12.12.2014

18 Nakatuta hydropower project

Hydro

10.0

Grid connec. 15.01.2015

19 Mpanda solar power project

Solar PV

1.0

Off Grid

17.02.2015

20 Sumbawanga solar project

Solar PV

2.0

Off Grid

17.02.2015

21 Lugarawa power project

Hydro

1.7

Grid connec. 20.02.2015

22 Matembwe power project

Hydro

0.5

Grid connec. 20.02.2015

23 Kitewaka power project

Hydro

4.2

Grid connec. 24.02.2015

24 Uzia hydro power project

Hydro

1.0

Off Grid

24.02.2015

25 Kalumbaleza power project

Hydro

1.0

Off Grid

24.02.2015

26 Mafia solar power project

Solar PV

1.0

Off Grid

24.02.2015

TOTAL CAPACITY
22-Mar-15

25.09.2014

113.3
15

SPP Tariff from 2009 to 2014

SUMMARYOFSPPTARIFFFROM2009TO2014
Gridconnectedtariff(TZS/kWh)
Year
2009
2010
2011
2012
2013
2014
22-Mar-15

Eff.Date WetSeason DrySeason %increase

DecJuly AugNov
Jan09
86.50
115.33
0
Jan10
99.27
132.36
15%
May11
109.02
145.36
10%
May12
137.29
183.05
26%
Sep13
157.40
209.87
15%
1Jul14
177.58
236.78
12.82%

OffGirdtariff %oftariff
(TZS/kWh) increase

334.78
368.87
380.22
480.5
490.5
482.64

0
10%
3%
27%
2%
1.60%
16

Renewable Energy Feed-In Tariff

(REFIT) Program

In 2013 The Energy Regulatory Authority with financial

assistance from USAID engaged a consultant to
undertake study that could have come with REFIT.
In August 2014 the consultant made presentation of draft
final report to the stakeholders. Some of the stakeholders
challenged the report.
In December 2014 the Authority conducted stakeholders
workshop on the REFIT program. They proposed REFIT
for mini hydro and biomass both for main grid and minigrid SPPs. Also there was a proposed REFIT for mini-grid
connected solar and wind projects.
The Authority further proposed to let grid connected solar
and wind SPPs to undergo competitive bidding process.
We are still waiting on the Authority's decision on the
REFIT program.

22-Mar-15

17

Support schemes for mini-grid and

rural electrification

The Rural Energy Agency (REA) is responsible for financing

of rural electrification projects. This is mainly extension of
grid connected and mini-grid connected distribution
network to the rural areas.
In areas where extension of distribution network is
technically not possible REA has also financed solar PV
projects in some villages.
Pilot projects on wind-solar PV hybrid system have also
been installed at some public institutions in rural areas.
REA get funds from the Government of Tanzania and
Development Partners like SIDA, World Bank (TEDAP),
NORAD, just to mention a few.
SPPs are also being supported by REA by giving them
matching grant and performance grants for projects
located in rural areas.

22-Mar-15

18

Current status of isolated minigrids operated by TANESCO

NO.OF
POWERSTATION
UNITS
1
2
3
4

BIHARAMULO
BUKOBA
KASULU
KIBONDO

5 KIGOMA
6 LIWALE
7 LOLIONDO
8 LUDEWA
9 MAFIAISLAND
10 MBINGA
22-Mar-15

2
4
2
2
5
2
4
3
2
4
2
1
2
2
2
1

UNIT
CAPACITY
(kW)
424
640
1,250
1,250
1,250
1,000
640
500
424
1,250
510
250
640
424
1,250
250

TOTAL
CAPACITY
(kW)
848
2,560
2,500
2,500
12,310
848
5,000
1,270
2,128
2,750
19

Current status of isolated minigrids operated by TANESCO cont.

NO.OF
POWERSTATION
UNITS
11 MPANDA
12 NAMTUMBO
13 NGARA
14 SONGEA
15 SUMBAWANGA
16 TUNDURU
17 SOMANGA
18 MTWARA

TOTAL
22-Mar-15

2
2
1
2
2
1
1
3
4
2
2
3
7
4

UNIT
CAPACITY
(kW)
660
640
400
476
1,800
1,915
660
640
1,250
640
350
2,500
2,000
1,950

TOTAL
CAPACITY
(kW)
2,600
400
952
8,095
5,000
1,980
7,500
21,800

82,291
20

Typical load profile

22-Mar-15

21

Plans for main grid extension to

mini-grid areas

TANESCO has got short term and long term plans to

extend main grid to isolated mini-grid areas. The aim is to
get rid off expensive diesel generation.
With SIDA support the Makambako Songea transmission
line will connect 4 mini-grids to the main grid and rural
electrification of villages along the transmission lines.
At the moment TANESCO has go no plans to establish new
mini-grids. Instead under the Governments policy of
electrifying all district headquarters, the same can be done
where new districts are going to be established and are far
from the main grid network.

22-Mar-15

22

22-Mar-15

23

Future Grid Map by 2033

22-Mar-15

24

Challenges for TANESCO in

regard to implement PV-Hybrid

The absence of clear Government policy on the

development of RE power projects including PV-Hybrid
systems.
Lack of knowledge and experience as far as dieselsolar PV hybrid system is concerned, especially for
megawatts size systems.
Uncertainty of SPP tariff under the existing SPP
framework.
Lack of seriousness for some developers of SPPs.
Lack of funds to develop pilot projects for diesel-solar
PV hybrid system that would have enlighten other
developers in the sector.

22-Mar-15

25

Support by Germany companies

It is proposed if Germany companies/financial

institutions can assist the Government of Tanzania and
TANESCO to develop pilot project for diesel-solar PV
hybrid system.
Support for technical and financial consultancy
services for the proposed diesel-solar PV hybrid
system under SPP arrangement.
Capacity building training for TANESCO Engineers as
far as diesel-solar PV hybrid system is concerned.
To assist in the establishment of a sustainable REFIT
program. Some other countries in the region have
succeeded to establish sustainable RE program.

22-Mar-15

26

END

22-Mar-15

27