The epileptic electricity power supply has become a fundamental issue affecting the economic development of Ethiopia. Geothermal energy, which results from the radioactive decay of minerals within the Earth’s core and solar energy absorbed at the surface, have been discovered and are being utilized by several countries. Ethiopia is still far behind in tapping the abundance of geothermal energy resources. In 2008, when the price of potash-a type of salt and key component of manufactured fertilizers-began to skyrocket around the world, Nejib Abba Biya, an Ethiopian-born Canadian entrepreneur, explored the possibilities of opening a mine to harvest this product in his native country. Nejib is now an architect of a deal between Reykjavik Geothermal, a U.S.-Icelandic private developer, and the Government of Ethiopia to build and operate the largest geothermal facility in Africa. The 1,000-megawatt facility will be built by Reykjavik Geothermal in partnership with Rift Valley Geothermal. He is a graduate of the Rothmans School of Business at the University of Toronto. He has over 30 years of business experience in diverse industries including technology, mining and energy to mention a few. He has run several multi national corporations. Nejib Abba Biya is a businessman who founded Allana Potash, Avion Gold and Rift Geothermal, the genesis of Corbetti and Tullu Moye Geothermal Corporation. Capital’s Reporter Tesfaye Getnet sat down with Nejib Abba Biya to explore more about Ethiopia’s geothermal potential. Excerpts;
Capital: Describe your organization’s activities in the geothermal industry?
Nejib Abba Biya: Geothermal Operations Plc signed a Power Purchase Agreement with Ethiopian Electric Power and an Implementation Agreement with the Government of Ethiopia in December 2017. This is to develop and privately finance 520MW of electricity generation, split in to four phases over the next eight years. Phase 1, which is our current focus, is for 50MW. Phase 2 is 100MW, phase 3 for 100MW and phase 4 for 270MW. The overall foreign direct investment will be around $2.5 Billion, with Phase 1 being USD270M and those Megawatts of power due to come online in 2022. The TMGO Team is fully established with offices in Addis Ababa and also Iteya, which is close to the project site. We’re busy undertaking all the civils and infrastructure construction works to support the start of geothermal exploration drilling in September of this year. This includes new / upgrading of 15km roads, drilling for fresh water supplies, two geothermal well pads, a 10,000m3 water reservoir, a construction camp & laydown yard and a 16km water pipeline. We’re in advanced stages of discussions with KenGen, who have drilled 100’s of geothermal wells in Kenya, to sign our geothermal drilling contract with them next week.
Capital: Where can we find geothermal energy?
Nejib: Geothermal energy can be found all over the world but is usually harnessed near edges of tectonic plates. The United States of America has the largest production of geothermal energy in the world with a total of 3093 MW. A total of 25 countries exploit their geothermal resources. For example generation totals in the USA are 3093 MW,Indonesia – 1925 MW, Philippines – 1864 MW, Turkey – 1100 MW and New Zealand generates 1077MW.
Almost all countries that have good access to geothermal potential are using the power that geothermal energy can provide as it has many benefits over other renewable energy projects. Currently, Ethiopia only has 7.3 MW of geothermal power however, they are sitting on the potential of 10,000 MW of power. This is why projects such as Tulu Moye and Corbetti are so important.
Geothermal resource is usually found along major tectonic boundaries where most volcanoes are located. When magma comes to the Earth’s surface, it heats ground water trapped in porous rock or water running along fractured rock surfaces and faults. High enthalpy geothermal resources in Ethiopia are located within the Ethiopian Rift System (ERS). Tectonic and magmatic features show that the ERS to be a zone of particularly active continental crust thinning and opening. Due to a high volume of partial melts in an upwelling asthenosphere, the generation of primary and secondary magma is conducive to the occurrence of high enthalpy geothermal fluid circulation systems at economically accessible depth.
Ethiopia started long-term geothermal exploration in 1969. Over the years, an inventory has been built up of the possible resource areas within the Ethiopian sector of the East African Rift system, as reflected in surface hydrothermal manifestations. The inventory work in the highland regions of the country is not complete but the rift system has been well covered. Of the about 120 localities within the rift system that are believed to have independent heating and circulation systems, about two dozen are judged to have potential for high enthalpy resources, for electricity generation. A much larger number are capable of being developed for non-electricity generation applications such as horticulture, animal breeding, aquaculture, agro-industry, health and recreation, mineral water bottling, mineral extraction, space cooling and heating, etc. (UNDP, 1973).
The early stages of geothermal explorations have identified over sixteen areas to have geothermal resources suitable for electricity generation with a total potential of 5000 MW. Currently the number of prospects suitable for power generation has reached 22 areas and the potential is estimated to be over 10,000 MW.
Capital: What are some of the exciting new directions in geothermal energy?
Nejib: Overall, what makes TMGO & Corbetti projects so exciting is that they will allow Ethiopia to utilize an untapped resource. One that it has been looking to do so for many decades now. The government’s Energy policy is an integral part of its overall development policy. It aims to facilitate the development of energy resources for economical supply to consumers. It seeks to achieve the accelerated development of indigenous energy resources and the promotion of private investment in the production and supply of energy. Electricity supply, as an element of the development infrastructure is being advanced in two fronts: the first is the building up of the grid based supply system to reach all administrative and market towns, and the second one is the rural electrification based on independent, privately owned supply systems in areas where the grid has not reached.
Geothermal energy is a clean, renewable, environment-friendly and indigenous resource that can improve the energy-generation mix renewable sources of energy which are essential alternatives to currently widely utilized fossil fuels. Since geothermal energy is a base load with high efficiency (Around 98%, unlike other renewable energy sources like hydro, wind, solar which can operate at 20-40% efficiency and availability) and not affected by drought unlike hydro. On this efficiency point it basically means that a 100MW Geothermal Power Plant generates you around 98MW of electricity 24 hours per day, 7 days a week, 365 Days a year on average, whereas other for hydro, a 100MW plant would generate you around 30MW on average all year round.
The Government has emphasized renewable energy especially for geothermal energy and established the Ethiopian Electric Authority (EEA). The Government has taken also positive steps in establishing Geothermal law, which has been ratified recently, the geothermal regulations and the directives are on progress to establish the regulatory framework.
Capital: What benefits does geothermal energy offer when compared to other energy resources?
Nejib: It’s back to the point above about being baseload with high efficiency and availability when compared to hydro and other renewables. Only geothermal, nuclear or thermal [diesel, heavy fuel oil, coal] power generation gives you this. Out of those three, geothermal is far cheaper per KWH. Also, having this baseload geothermal will improve EEP in two ways. One is that it will provide very good grid stability thereby reducing the number of power cuts and outages. Secondly is that they can manage the hydropower resources and water levels in dams / reservoirs much better so that they are available for peak electricity demand times during the day.
Capital: What are some of the problems associated with geothermal power?
Nejib: There are only really two main problems that come with geothermal power and neither of these are environmental and neither are a reason not to keep developing more geothermal energy. The first main problem with geothermal project is the high investment costs of the geothermal system. To produce the geothermal energy, high initial costs occur for large or small projects.
The second problem with geothermal project is the high risks in the design and exploration phases. Until the geothermal resource has a proof on concept it cannot be guaranteed that the resource will be there. This is a smaller problem in hindsight for two reasons. TMGO have undertaken extensive geological studies in the area so there is a good degree of certainty of success. Also, further down the Rift Valley, Kenya have successfully been developing their geothermal electricity generation capacity and now produce over 600MW, around half of their total installed capacity to compliment their strong hydropower producing capacity.
Capital: Does geothermal represent an opportunity to retool a whole sector for a changing economy?
Nejib: Geothermal will fully compliment Ethiopia’s hydropower capacity and generation. It will be essential to support Ethiopia’s industrialization aspirations and plans. You need good baseload to power 24 hour industrial production. It’s unlikely you can do that from hydropower alone, or even a mix of hydro and other renewables, as can be seen from the current power rationing. Developing these geothermal projects will fully support Ethiopia’s continued strong economic growth and will allow continued use and better management of water resources associated with hydropower also. Counties such as Iceland, New Zealand and Kenya are great examples of where this has been achieved.
Capital: The Tulu Moye project was expected to start its’ first phase six months ago. Why has not it started yet?
Nejib: We have started, just not the geothermal drilling yet but we’re close with that. We’re working with the GoE and EEP to conclude the final points necessary for the contracts to be ratified. We continue to invest huge sums of money while this is going on as our investors very much have a long-term view and trust and belief in Ethiopia’s strategies and continued economic growth and success.
Capital: Adequate policies allow tackling major challenges connected to geothermal development. To what extent are policies a key prerequisite for geothermal development in Ethiopia?
Nejib: They have been essential to govern the sector and promote foreign direct investment for the high risk and expensive front-end development costs. In this regard, Ethiopia has made huge strides to set up the necessary legislative regulatory framework to facilitate this thought, amongst others, the Geothermal Proclamation and Public Private Partnership Proclamations. Establishing the Ethiopian Energy Authority as regulator for the sector has had huge benefits also and they play a key role in promoting the development of geothermal energy to give Ethiopia energy security and certainty.