Primary energy legislation
The
Electricity Act of 2008 &
Electricity rules of 2019
The primary legislation
for generating, transmitting, and distributing electricity power in Tanzania is
the Electricity Act of 2008. The act further focuses on cross-country
electricity trading and rural electrification (Kihwele et al., 2012). In line
with this act, the Electricity (Development of small power projects) Rules
of 2019 and the electricity (Standardized small power projects
tariff) order of 2019 stipulate all prerequisites and undertakings to
develop and operate power projects in the country. These recent rules and
orders have put forward clear and simplified procedures for the development of
mini and off grids in the country which enhance best enabling environment for
the development of decentralized renewable energy in Tanzania.
The Energy and water utilities regulatory
authority (EWURA)
Regulating
the energy sector
Regulation of energy
sector is undertaken by the Energy and Water utilities regulatory authority
(EWURA) which was formulated under the guidance of Energy and Water
Utilities Authorities Act (Cap 414) (the EWURA Act). EWURA is specifically
dealing with tariff reviews, licensing, reviewing and approving power purchase
agreements, and monitoring performance and standards.
Seeding
transformation
National
policies to regulate the energy sector
Other key legislations
which guide energy sectors are Environmental Management Act 2004 and
National Energy Policy (NEP 2015). NEP 2015 allows multiple energy
producers to generate power from various sources such as wind and solar. This
framework aligns with the National Development Vision 2025 and National
Five Years Development plan 2016/2021 that stipulate the need for a
stronger, secure, and smart power grid. In Tanzania, particularly from the
study area most of the small energy producers, investors and village residents
are now starting to benefit from the stipulate pinpointed out from the energy
policy 2015 which promote the use and establishment of renewable energy
technologies. However, there is a problem with the lack of a clear energy
access roadmap which harmonizes the specific prioritization of investing in
renewables to cater for fast, affordable, and reliable energy to diverse levels
of economy in the country.
Energy for everyone
The
Rural Energy Agency (REA)
The state-owned company known as TANESCO has remained with a monopoly over the power supply in the country since independence. However, the government in recent years has allowed involvement of private sector in the generation, transmission, and distribution in the country. In addition, Rural Energy Agency (REA) under the Rural Act of 2005 was established to oversee and implement all rural electrification projects in the country through Rural Energy Fund. In recent years, REA has taken initiatives to extend the national main grid in rural areas coupled with small mini grids through energy fund. These initiatives are posing successful undertakings in socio economic activities especially in peri – urban and rural areas of the country.
Fill the gaps
Challenges
for mini grids
The main challenge remains in the highly scattered settlement villages whereby the costs of electricity distribution become very high thus leaving these poor population non electrified. Indeed, the highly subsidized TANESCO and REA electricity tend to pose difficulties for the development of new independent mini grids including solar power plants. The tariffs being charged by the independent mini grids are still expensive and do not compete with electricity powered TANESCO and REA and thus pose a barrier to private investment in renewable energy plants.
Table : Key energy stakeholders and institutional set-up in Tanzania
Source: (IRENA, 2017)
|
|
Name |
Role |
|
Government/Public
Institutions |
||
|
1. |
Ministry
of Energy |
Overarching role of
overseeing policies, strategies, and laws within the areas of energy. |
|
2. |
Tanzania Electric Supply Company Limited (TANESCO) |
It
is a parastatal institution within the Ministry of Energy in charge of power
generation, transmission, and distribution. It is the main power utility
company in the country and provides about 60% of the effective generating
capacity of the national grid. |
|
3. |
Energy and Water Utilities Regulatory Authority (EWURA) |
An
autonomous regulatory body that oversees the technical and economic
regulation of the energy and water sectors. Its tasks consist of regulating
power retail tariffs, awarding licenses and monitoring and enforcement
activities. |
|
4. |
Rural Energy Agency (REA) |
It
was founded in 2005 as part of the Rural Energy Act to support the Government
of Tanzania’s endeavors to accelerate access to
rural areas. Major task: to deal with rural access by co-financing rural
electrification programs |
|
5. |
Tanzania Investment Centre (TIC) |
The
primary agency of the government to co-ordinate, encourage, promote, and
facilitate investment in Tanzania.” Although not mandatory, the Centre is a
one-stop shop for new local and foreign investors because of the incentives
offered to projects it approves. |
|
6. |
Tanzania Geothermal Development Company |
A
subsidiary company of TANESCO and became operational in July 2014 with a
mandate to be at the forefront of geothermal development in Tanzania. |
|
7. |
Local government authorities (LGAs) |
They have experience of
off-grid production and distribution of energy in their own (mostly urban)
areas using decentralized energy systems and mini-grids. |
|
8. |
Academic and research institutions
|
Capacity-building for people working in the energy sector is offered at various universities and research and training institutions in Tanzania. |
|
|
Private sector institutions |
|
|
9. |
Emergency power producers and Independent Power Producers (IPPs) |
These
are private investors owning power plants of more than 10 MW and currently contributing
40% of the installed electricity capacity. |
|
10. |
Small power producers (SPPs) |
These
are private companies operating small renewables-based power projects (up to
10 MW) under an SPPA to sell power to TANESCO or directly to customers. Many
of the small power producers also operate in other business areas such as tea
and sugar. |
|
11. |
Private solar energy companies |
They are organized
under the Tanzania Renewable Energy Association but legally permitted to work
independently in solar PV installation, importing and selling solar PV
products. |
|
12. |
Private biomass energy companies |
These
are companies engaged in the fabrication and supply of improved and clean
wood fuel cook stoves. |
|
13. |
Civil society Organizations
|
They
include NGOs, faith-based organizations and renewable
energy networks. Up until now, many mini-hydropower plants have been owned, operated,
and managed by faith-based organizations. |