Tanzania forecasts its annual power demand to increase by 71%, from 7,860 GWh in 2016 to 13,430 GWh in 2020.
This was indicated in the recently published update of the Power System Master Plan (PSMP) by the Ministry of Energy and Minerals (MEM) of Tanzania.
PSMP notes that the main factors leading to power demand growth in Tanzania are:
- GDP Growth: the past GDP growth rate of Tanzania was average 7% per year, and the future GDP growth rate will be similar, driven by gas development, establishment of transportation infrastructure, increase of Foreign Direct Investment (FDI), increasing level of education, construction of communication facilities and construction of modern households.
- Gas Infrastructure: gas intensive business will be promoted by the development of gas infrastructure such as chemical, Liquefied Natural Gas (LNG) and transportation industries. Such industries consume a lot of electric power for their production activities.
- Industrial Power Consumption: the power demand growth rates for industrial and commercial sectors are expected to reach 18% per year from 2015 to 2020 while the growth rates are 11% for industry and 13% for commercial sector afterward.
- Residential Power Consumption: the growth rate of power demand in residential sector will increase with average 11% per year from 2015 to 2040.
- Electrification Rates: since the electrification rate of Tanzania in 2015 is 41%, there is a room for increasing the electrification rate, which is assumed to reach more than 50% in 2020 and 90% in 2035. Power consumption per capita is 137 kWh in 2016; it is rather small compared to other developing countries such as Kenya, Ghana and Zambia. In the future, it will become 240 kWh per capita in 2020 and 1,050 kWh per capita in 2040.
“Currently, power supply in Tanzania cannot meet the demand. Such imbalance has to be solved as soon as possible. During the period when the shortage is gradually relieved, power demand will grow at higher rate than normal. In PSMP 2016, it is assumed that the power shortage will be relieved toward the year 2020,” PSMP indicates.
Tanzania’s power resources include hydro, natural gas, coal, uranium, wind, geothermal, biomass, solar, tidal and waves.
Currently (2016), Tanzania’s total grid installed capacity is 1,357.69 MW composed of hydro 566.79 MW (42%), natural gas 607 MW (45%) and liquid fuel 173.40 MW (13%).
To meet the growing demand for electricity, the Government is planning to increase Tanzania’s generation capacity to 10,000 MW in 2025.
To achieve this goal, the Government of Tanzania has embarked on reforming the Electricity Supply Industry (ESI) mainly by attracting private capital in the industry.