“Coupled with its suitability for investment, Ethiopia is one of the best places for foreign investors. The government of Ethiopia is highly dedicated to support every foreign investor that is engaging in different investment sectors in the country. Besides, the government also gives high emphasis to keep its promises.
“That is why we choose Ethiopia as best place for us to invest in geothermal project. I want to share with all of you my happiness to be in Ethiopia, my deep motivation to work on such a meaningful project and my pride to be in a team with so much committed talents,” Chief Executive Officer (CEO) of Tulu Moye Geothermal Operations Plc. Maxence Mirabeau said.
Being a part of renewable sources, geothermal energy serves as a source of electric power that comes from the sub-surface of the earth. Its power refers to the use of underground hot steam to drive turbines which in turn generate electricity. Aiming to benefit from such important renewable energy sources, the Ethiopian government has made different reform activities in a way working keenly on these kinds of projects.
“Geothermal enhances our energy security by providing constant output power to support industrialization,” Prime Minister Abiy Ahmed twitted on his official website, adding he said that it is the first of such power purchase agreement to reach an advanced stage in the country.
Though the country is heavily reliant on hydropower, government plans to exploit up to 1,000MW of geothermal potential by 2030. As part of different activities made by the Government, an agreement is signed with a Foreign Company to invest on geothermal energy.
Exclusively to The Ethiopian Herald, CEO Maxence Mirabeau said Ethiopia’s Tulu Moye Geothermal plant, on which a contract agreement signed with the government, is expected to start generating 50 MW power when the first phase is completed by February 2023 and rising to 150 MW at full completion two years later.
As to him, the project plans to drill up to 10 different wells for the initially planned two phases of development. Among the 10 wells to be drilled two of them are finalized. High developmental impact including; affordable or clean indigenous base load power, regional economic development or community engagement, benign environmental impacts are among the objectives of the project.
Aiming to delivering sustainable electricity from natural geothermal resources to support the economic development of Ethiopia, the Project will use advanced (yet proven worldwide) power generation and monitoring technologies and will benefit from the Sponsors’ operations and management know-how, including their expertise in remote monitoring and management, which is new to Ethiopia, the CEO added.
As to him, Emergency Preparedness and Response Plan (EPRP) has been made. The plan was developed based on IFC, ISO, and UNEP and Ethiopian government’s standards. The plan provides an outline to ensure that systems are in place to react and appropriately manage unwanted outcomes.
“No doubt the success of this effort will have a significant impact on the country’s future economic well-being,” Public Relation Director of Ethiopian Electric Authority (EEA), Bekelech Kuma said. As to her, the project will help the government achieve its desired goal of assuring the national economic growth.
The Economist Intelligence Unit (“EIU”) forecasts Ethiopia’s economy will grow at average annual rate of 6.8 percent between 2020 and 2024. Much of the recent growth has been driven by government expenditures and infrastructure investments – particularly for power supply, though both private consumption and domestic demand are projected to grow at a steady pace in the next five years.
According to the National Bank of Ethiopia, agriculture and service sectors contributed 36.7 and 47.3 percent, respectively to GDP in 2015/2016. As of 2018, those shares dropped to 31.2 and 36.5 percent respectively. These economic shifts, supported by strong industrialization policy, highlight the ongoing and impending urbanization in the coming decades, which will necessitate significant investment inflow into adequate infrastructure, particularly the energy.
Cognizant to this fact, both foreign and domestic investors should use the golden opportunity which is available in the energy sector, Bekelech insisted. Ethiopia, possessing abundant renewable energy resources, has the potential to generate over 60,000 megawatts (MW) of electric power from hydroelectric, wind farm, solar and geothermal sources. As a result of Ethiopia’s rapid GDP growth over the previous decade, demand for electricity has been steadily increasing.
Ethiopia largely relies on hydropower for more than 90 percent of its installed capacity and on other renewable energy sources such as wind and geothermal for the remaining 10 percent. In order to ensure a reliable and climate resilient power supply, the Government is keen to diversify its energy mix through the exploitation of other renewable energy resources including solar, wind and geothermal.
Moreover, through its Climate Resilient Green Economy (“CRGE”) strategy and Power Expansion Plan, Ethiopia aspires to become a renewable energy powerhouse by reaching generation capacity of 17,000 MW by 2028. And also the country has a plan to increase the installed capacity to slightly above 30 GW by 2037 to respond to the increase in demand with an increased participation of the private sector via IPPs.
According to Yitemgeta Fantu, Deputy Chief Technical Officer for TMGO, the Project is committed to be a good neighbor for the local community and invest in programs that benefit them. To illustrate, the project is working on road improvements which are expected to cut down the surrounding population’s travel time and cost by 75 and 50 percent respectively.
On top of this effort, it is working admittedly to get better access to potable water and sanitation. Accordingly, to alleviate the local community’s water related problem, the company is drilling additional water well and will supply water soon for free to the households near the Project coupled with working on job creation and income generation.
As to him, the project will create a total of approximately 340 permanent jobs in operation and maintenance other than temporary job opportunities. The company is instituting minimum wage requirements, including requiring its contractors to ensure compliance. These employment opportunities will improve household incomes and reduce reliance on seasonal and inconsistent farming income.
Additionally, the Project plans to develop telecommunications infrastructure, which will be used to facilitate internet connectivity and remote communications, bringing benefits of cellular and internet access to local residents. The Project also plans to invest in off-grid electricity supply by providing solar lanterns and solar home systems to replace kerosene lamps and dry cell batteries for radios and flashlights.
TMGO secured the lava field for its geothermal well drilling activities through meetings with the local and regional community and administrations. The regional government addressed all questions and concerns from the community, which then accepted the valued amount and percentage of the community shares, he noted.
Report of the project as of April 2021 indicated that Drilling Pad expansion works are being finalized for the third and fourth geothermal wells. 3 out of 5 of the water wells are currently operational and supporting the geothermal drilling.
At the beginning of April 2021, drilling reached 1147 m measured depth (MMD) / 1134 m true vertical depth. A drill pipe snapped on 4th of April at 1257 m depth. Top of the fish was at 672 m MMD and fishing of the well was successful, and drilling continued the day after.
Drilling of the production section has gone well managing to keep the inclination generally at around 21° and the Azimuth at around 315 to 320°, until the drill string got stuck at 2112 m on the morning of 26th of April. On 27th of April the drill string was freed, and the well was cleaned and rimmed. Drilling continued on the 29th of April and reached 2179 MMD on the 30th.
Located in the Arsi Zone to the southeast of the capital, the plant is being developed by the Tulu Moye Geothermal Operations (TMGO), a holding company Paris based investment firm Meridiam SAS and Icelandic firm Reykjavik Geothermal, it was learnt.
BY HIZKEL HAILU
The Ethiopian Herald June 4/2021