Ethiopia has been approved for I-REC(E) issuance
The I-REC Standard has recently approved Ethiopia for I-REC(E) issuance. Ethiopia’s approval came after submitting a country report detailing their current and future levels of electrification and signing a non-objection letter with the Ministry of Water and Electricity (MoWE).
The Issuer in Ethiopia is Energy Peace Partners (EPP). Currently, there are no existing energy certificate systems in Ethiopia. Beyond the issuance of normal I-REC(E) certificates EPP will also allow for the issuance of Peace Renewable Energy Credits (P-RECs), designed to stimulate renewable energy market development in fragile and energy-poor regions. P-RECs would monetize renewable energy generated from qualified projects in Ethiopia, where renewable energy investment is limited, to help renewable energy developers implement new projects or extend existing projects. This would support market development and expand renewable energy purchase options in a country and region with limited infrastructure while extending the benefits of renewable energy to some of the most vulnerable communities. The I-REC Standard recognizes P-RECs as I-REC(E) with a ‘peace’ label that indicates high-impact social co-benefits.
Ethiopia is in the Horn of Africa and is a landlocked country split by the Great Rift Valley. Ethiopia has often served as an anchor state in the region, is host to the African Union, and is the second most populous country with a population of 115 million in Africa. Yet, despite recent rapid economic growth, the country remains one of the poorest in the region.
The Ethiopian Electric Power Corporation (EEP) is responsible for generation and transmission, currently owning most of the existing power plants and transmission structures in Ethiopia. However, the Ethiopian Electric Utility (EEU) is responsible for the distribution infrastructure in the country, by purchasing electricity from the EEP to distribute to consumers for sale. The Ethiopian Petroleum and Energy Authority (PEA) is responsible for regulating the power and petroleum sector. All three agencies report to the Ministry of Water and Electricity (MoWE), which is responsible for developing water and electricity resources in the country. The Ministry also manages the Rural Electrification Fund.
Ethiopia’s power sector has been slow to develop, with one of the lowest per capita annual energy consumption rates at 95 kWh of electricity in 2020. Despite low connectivity rates, Ethiopia’s power system is relatively large compared to regional neighbors, mostly thanks to the abundance of hydropower sources for electricity production. Hydropower makes up approximately 95% of Ethiopia’s current installed generation capacity–with the remaining 8% and 2% from wind and thermal sources.
The country currently has approximately 4,500 MW of installed generation capacity. Under recent government policy, the state utility Ethiopian Electric Power (EEP), estimates total installed generation capacity to increase to 10,358 MW by 2022 (Ethiopia -Energy (trade.gov)). The International Trade Administration estimates that Ethiopia has the potential to generate over 60GW of electric power from renewable sources. The estimated potential for exploitation of hydropower is 45GW, wind is 10GW, geothermal is 5GW, and solar irradiation ranges from 4.5 kWh/m2/day to 7.5 kWh/m2/day.
The Government of Ethiopia has a robust set of policies in support of renewable energy, especially in the off-grid space, and plays a key role in the promotion and control of any private sector initiative, including renewable energy infrastructures. Mercy Corps and its local subsidiary, Humanitarian Energy (HumEn), are partners of EPP on this initiative and are engaged with the Ministry of Energy and the regulator for its projects. As such, the I-REC Standard Foundation looks forward to commencing with EPP on the issuance of I-REC(E) and P-RECs in Ethiopia.