Just transition towards defossilised energy systems for developing economies: A case study of Ethiopia

Ayobami Solomon Oyewo, A.A. Solomon, Dmitrii Bogdanov, Arman Aghahosseini, Theophilus Nii Odai Mensah, Manish Ram, Christian Breyer
2021 Renewable Energy  
8 This article explores the transition to renewable energy for all purposes in developing countries. 9 Ethiopia is chosen as a case study and is an exemplary of developing countries with comparable 10 climatic and socioeconomic conditions. The techno-economic analysis of the transition is 11 performed with the LUT Energy System Transition model, while the socio-economic aspects are 12 examined in terms of greenhouse gas emissions reduction, improved energy services and job 13 creation. Six
more » ... rios were developed, which examine various policy constraints, such as 14 greenhouse gas emission cost. The Best Policy Scenarios cost less than the Current Policy 15 Scenarios and generate more job. The results of this research show that it is least costing, least 16 greenhouse gas emitting and most job-rich to gradually transition Ethiopia's energy system into 17 one that is dominated by solar PV, complemented by wind energy and hydropower. The 18 modelling outcome reveals that it is not only technically and economically possible to defossilise 19 the Ethiopian energy system, but it is the least cost option with greatest societal welfare. This is a 20 first of its kind study for the Ethiopian energy system from a long-term perspective. 21 22 23 29 (CGRE) strategy, with the clear objective to become a middle-income country by 2025, and to 30 achieve this through economic growth that is both resilient to negative impacts of climate change 31 and results in no net greenhouse gas emissions [3]. This article explores how developing 32 countries can transition to renewable energy (RE) for all purposes. Ethiopia is chosen as a case 33 study, as the country reflects the current situation in many sub-Saharan African (SSA) countries, 34 which includes limited infrastructure, growing population, dependence on fossil fuel, high use of 35 unsustainable biomass and vulnerability to climate change. 36 J o u r n a l P r e -p r o o f 2 Ethiopia is a landlocked country located in the Horn of Africa. With an expanding population of 37 above 100 million, Ethiopia is the second most populated country in Africa, and the fastest 38 growing economy in the region [4]. However, it is also one of the poorest in the world, with per 39 capita income of 790 USD in 2018 [4] and is ranked 173rd of 189 in terms of human 40 development index [5]. Despite the vast energy resources, such as hydropower, solar, wind, 41 biomass, geothermal, natural gas and coal, Ethiopia is still unable to develop, transform and 42 utilise these resources for optimal economic development [6]. Over 50 million (55%) Ethiopians 43 are unelectrified and 98.9 million people rely on biomass for cooking in 2018 [7]. Biofuel 44 accounts for the largest share (87%) of the total primary energy supply, hydrocarbons 10% and 45 electricity 3% in 2017 as illustrated in Figure 1 [8]. 46 47 Figure 1: Ethiopian total primary energy supply in 2017. 48 Recognising energy development as a vital enabler of socioeconomic development, the Ethiopian 49 government aims at investing in RE sources to curb energy crisis and vulnerability to climate 50 change [3,6]. In doing so, Ethiopia is committed to developing solar and wind energy alongside 51 its massive hydropower, and investment in geothermal and bioenergy to complement these 52 variable energy sources [3,6]. Despite the high vulnerability to extreme weather variability, 53 especially erratic rainfall [3,9]; there are existing plans to increase the hydropower capacity from 54 3.8 GW in 2018 to 22 GW by 2030 [10]. However, climate change might pose significant 55 challenges to hydropower generation [11-13]. Beyond environmental and social impacts of 56 hydropower projects, these projects are often susceptible to substantial financial risks due to cost 57 overruns and scheduled spills [14-16]. Further, countries hosting large hydropower dams have 58 shown the ineffectiveness of a 'hydropower strategy' as an option to improving electrification 59 access, particularly in rural areas [17]. 60 Ethiopia shows an excellent prerequisite for a nearly 100% RE supply [18]. With the fast decline 61 in RE costs and excellent resource conditions in Ethiopia, countless opportunities exist in the 62 country for low-cost energy supply [18]. Solar PV, wind energy and hydropower are anticipated 63 to experience strong growth in the country's energy mix [6,18]. However, these power sources 64 are variable in nature [19]. Nevertheless, the variability can be overcome by designing an 65 optimal system [20], with appropriate enabling technologies, if resources scarcity enforces 66 dependence on limited variable RE (VRE) resources [21-23] and that exploit resource 67 complementarity to reduce its impact and the need for enabling technologies for regions with 68 diverse resources [18,19]. So far, there is a lack of high temporal and spatial resolution energy 69 transition studies on regional and country resolution in SSA, which consider the impact of high 70 J o u r n a l P r e -p r o o f shares of RE in meeting the rising energy demand [24]. Further, a systematic understanding of 71 national energy transition is vital, especially for developing countries like Ethiopia. Thus, the 72 need for energy system modelling is essential to understand the underlying behavioural pattern 73 and dynamics of energy systems, particularly when integrating high shares of VRE resources in 74 the context of SSA [25-28]. 75 Recent studies have demonstrated the technical feasibility and economic viability of achieving a 76 fully renewable electricity system in general [26] and in particular for cases such as South Africa 77 [25], Nigeria [26], Ghana [27], West Africa [28], SSA [23] and the world [30]. The SDG 7, 78 Africa Vision 2063 [31], Ethiopia CGRE Vision 2025 [3] and the Paris Agreement can be 79 achieved by the deployment of RE technologies, in tackling the two major challenges of the 21 st 80 century: widespread energy poverty and climate change [1,3,6]. 81 For these reasons, the techno-economic analysis of the Ethiopian energy transition is performed, 82 and a socio-economic footprint is examined in terms of greenhouse gas (GHG) emissions, 83 improved energy services and job creation. The analysis for Ethiopia serves as an exemplary of 84 developing countries with similar climates and socioeconomic conditions. The energy transition 85 is modelled in 5-year intervals within the time span of 2015 to 2050, by applying linear 86 optimisation modelling to determine a cost optimal generation mix to meet the demand based on 87 projected costs and technologies. Six scenarios were developed to fully understand the transition 88 pathway options under certain policy constraints. These scenarios could cater to policy decisions 89 for defossilising the Ethiopian energy system within the time horizon of 2050. 90 91 2. Literature review: state of 100% renewable energy research in sub-Saharan Africa 92 A brief review on the state of research for 100% RE systems in SSA countries is presented in 93 Table 1. The literature review considers only peer-reviewed articles. In total, 16 articles have 94 been identified and analysed, including country, regional and global studies. However, only 95 global studies with focus on SSA countries or high regional resolution are included in this 96 review. 97 Most of the studies listed in Table 1 , have a predominant focus on the power sector, while less 98 attention is given to other energy sectors. Some of the studies reviewed focus on 100% RE 99 systems analysed in the overnight approach, which may lack sufficient insights that could cater 100 for decision making in transitioning to a fully RE system. In addition, most of the RE policies in 101 SSA are focused on the power sector, while little or no policy framing exists for other sectors to 102 enable comparable progress [32]. Furthermore, several countries in SSA aim at 100% renewable 103 electricity by 2050 including Ethiopia, Rwanda, Senegal, Kenya, Malawi, Ghana, Madagascar 104 and Burkina Faso. Cape Verde has a highly ambitious target set for 2025 [32]. A recent review 105 article on 100% RE systems, which covers 180 articles published until end of 2018, shows that 106 Africa, in particular SSA, is one of the major regions in the world that is not yet covered well by 107 100% RE research [24]. This limited research creates less support for policymakers when 108 J o u r n a l P r e -p r o o f 130 system. To compute the lowest system cost, the model seeks to optimise the sum of installed 131 capacities of each technology, operational expenditures, and costs of generation ramping. The 132 J o u r n a l P r e -p r o o f The RE technologies upper limits were estimated based on the method described in [53], 204 existing installed capacities until 2015 are taken from [48] and set as lower limit. 205 Absolute numbers of the upper and lower limits of all technologies are provided in the 206 Supplementary Material (Tables S6-S7). The transmission and distribution grid losses 207 were considered according to Sadovskaia et al. [54]. 208 209 development is susceptible to schedule spills and cost overruns [14-16]. However, advocates of 645 hydropower are predictably over-optimistic about schedule, cost and often exaggerate on 646 multiple public benefits of large dam development, disregarding the true risk of the project on 647 fragile economies of developing countries [15-16]. A statistical test of six hydropower 648 hypotheses was analysed by Sovacool and Walter [76]. These hypotheses test how hydropower is 649 related to internal conflicts, poverty, economic growth rates, rates of public debt, corruption and 650 GHG emissions [76]. The results of the analyses show that hydropower does not increase 651 internal conflict experience and reduces GHG emissions per capita. However, all other 652 hypotheses confirm that hydropower to some extent increases poverty, decreases GDP per capita, 653 increases public debt and increases corruption [76]. It is noteworthy that hydropower sits at a 654 critical junction in countries or regions where capacity is yet to be built [76]. 655 656 The BPSs results show that solar PV will emerge as the dominating technology of the Ethiopian 657 future energy system. Based on the forgoing discussion, solar energy is less vulnerable than 658 hydropower to climate change risks [13], which is an important fact for Ethiopia. Emodi et al. 659 [13] conclude that climate change will have serious implications on energy systems, which will 660 lead to changes in energy demand and supply. Solar PV systems are more resilient to climate 661 change when compared to other RE sources. Thus, solar PV is anticipated to play a vital role in 662 mitigating GHG emissions and adapt the energy system to future climatic conditions [13]. 663 Additionally, solar PV systems are least at risk to cost overruns [77]. According to Sovacool et 664 al. [77], decentralised, modular and scalable systems such as solar PV and wind would see fewer 665 cost escalations. The IEA [78] also concludes that more modular systems run lower risks of 666 technical systems failures. Developing countries like Ethiopia should prefer agile energy 667 alternatives to mega hydropower projects that can be built over short time horizons. This will 668 finally improve resilience and other metrics of energy security [70]. 669 670 Solar PV generation in 2050 is around 66% of total generation in BPSs, relatively composed of 671 22% PV prosumer and 44% utility-scale PV in BPS-1, whereas in BPS-2 utility-scale PV 672 supplies the entire solar PV generation. Decentralised power systems at the consumer end, 673 notably rooftop PV is growing at an accelerated pace and is expected to shape the future power 674 system [79]. Solar PV prosumers may be one of the very important enablers of the energy 675 transition [79]. Solar PV prosumers with batteries may not require as much electricity from the 676 central grid. Results indicate that Ethiopian PV prosumers with batteries can reduce their 677 consumption from the grid by 38 TWh (19%), while increasing the energy system resilience. The 678 continuous decline in the cost of solar PV will prompt further cuts in LCOE for PV prosumers, 679 which will stimulate the PV prosumer sector in the nearest future. Solar PV electricity generation 680 is key to achieving a deep defossilisation of the Ethiopian energy system and is comparable for 681 other Sun Belt countries [23, 25-28, 30,44]. 682 683 5.2 No technical showstoppers to the transition 684 685 Security of energy supply is persistently expressed as a concern in power systems dominated by 686 VRE. This study demonstrates how a renewable-led generation can overcome the challenge of 687 J o u r n a l P r e -p r o o f 962 963 Ayobami Solomon Oyewo would like to thank LUT Foundation for the valuable scholarship and 964 all authors would like to thank LUT University for general support. The authors thank Siavash 965 Khalili Maybodi for access to the literature database used in section 2 of this study. 966 967 Supplementary Materials: The following are available online at: 968 969
doi:10.1016/j.renene.2021.05.029 fatcat:pga5g63o45ddjkggu66wexrtri