Ethiopia Energy Outlook

Analysis from Africa Energy Outlook 2019

Africa Energy Outlook 2019 is the IEA’s most comprehensive and detailed work to date on energy across the African continent, with a particular emphasis on sub-Saharan Africa. It includes detailed energy profiles of 11 countries that represent three-quarters of the region’s gross domestic product and energy demand.



  Stated Policies Africa Case CAAGR 2018-40
  2000 2018 2030 2040 2030 2040 STEPS AC
 GDP ($2018 billion, PPP)  47  220  493  870  610  1445 6.5% 8.9%
 Population (million)  67  108  143  173  143  173 2.2% 2.2%
• with electricity access 5% 45% 100% 100% 100% 100% 3.7% 3.7%
• with access to clean cooking 1% 7% 34% 56% 100% 100% 9.7% 12.6%
 CO2 emissions (Mt CO2)  3  14  29  46  32  52 5.5% 6.2%

Note: STEPS = Stated Policies Scenario and AC = Africa Case

 

Policy Key targets and measures
Performance targets
  • Increase generating capacity by 25 000 MW by 2030: 22 000 MW of hydro; 1 000 MW of geothermal; and 2 000 MW of wind by 2030.
  • National Electrification Program (2017): 100% electrification in 2025, with 35% off-grid and 65% grid, while extending the grid to reach 96% grid connections by 2030.
Industrial development targets
  • Achieve an annual average real GDP growth rate of 11% within a stable macroeconomic environment and become a lower middle-income country by 2025.
  • Focus on ensuring rapid, sustainable growth by enhancing the productivity of the agriculture and manufacturing sectors, and stimulating competition in the economy.

Ethiopia primary energy demand and GDP in the Africa Case, 2010-2040

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Ethiopia primary energy demand and GDP in the Stated Policies Scenario, 2010-2040

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Ethiopia could supply a much larger economy than today in the AC, using only twice the energy, were it to diversify its energy mix and implement efficiency standards.

In the AC, this diversification comes about as a result of a substantial expansion of geothermal energy along with increased use of oil within industry and for cooking.


Ethiopia electricity generation by technology in the Africa Case, 2010-2040

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Ethiopia electricity generation by technology in the Stated Policies Scenario, 2010-2040

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Ethiopia is currently heavily reliant on hydropower; plans to increase capacity to 13.5 GW by 2040 would make Ethiopia the second-largest hydro producer in Africa.

Providing electricity access to all and electrifying productive uses will lead to a fivefold increase in generation in the STEPS, and an even bigger increase in the AC; solar PV and geothermal account for almost 45% of the power mix by 2040 in the AC.

Electricity final energy consumption in Ethiopia by scenario, 2018-2040

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Fossil fuel final energy consumption in Ethiopia, 2018-2040 by scenario

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Increased affluence in the STEPS results in a more than fourfold increase of the private vehicle stock with the number of cars reaching 700 000 by 2040. This results in a 300% increase in related oil consumption.

To meet the needs of its growing population, Ethiopia remains a large producer of cement causing energy demand to increase significantly in both scenarios.

Weo2019 Ethiopia

Ethiopia currently has an electricity access rate of 45%, 11% of its population already have access through decentralised solutions. Strong government commitment to reach full access before 2030 in the STEPS.

In both scenarios, around 80% of new connections are cost effectively delivered by grid densification and extension as a large part of the population lives close to the grid.

Ethiopia fuels and technologies used for cooking by scenario, 2018-2030

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In the STEPS, a push on improved and advanced biomass cookstoves alongside more access through LPG and electricity increases the population with access by 40 million by 2030, with 60% of this increase taking place in rural areas.

In the AC, increased efforts using the same solutions bring access to clean cooking by 2030 to the remaining 95 million people that rely on the traditional use of biomass.


Ethiopia gas demand and production by scenario, 2010-2040

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Ethiopia oil demand and production by scenario, 2010-2040

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Ethiopia coal demand and production by scenario, 2010-2040

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Growing fossil fuel consumption is met almost entirely by imports in both scenarios.

A high degree of dependency on imported fuels in both scenarios and a range of infrastructure development challenges underline the case for the development of hydropower and other renewables. 

Ethiopia cumulative investment needs by scenario, 2019-2040

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Cumulative energy investment of $100 billion is needed in the STEPS, with electricity access and networks taking the majority.

The AC needs around 80% more capital, including a doubling of investments in renewables and electricity networks compared with the STEPS.


Ethiopia will remain heavily dependent on fossil fuel imports. In both scenarios, imports of oil and coal increase; a significant increase in gas consumption (and imports) would help the country to make the most of its industrial potential.

The need for energy imports could be reduced by a determined push to develop the country’s formidable hydro resources and accelerate electrification, as well as by development of its more limited natural gas reserves.

Continuing progress on access means that fully achieving SDG 7 is well within Ethiopia’s reach. Most of the additional connections to 2025 can be made through extending the current grid.