Tanzania 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)

57

176

314

585

475

1 233

5.6%

9.3%

Population (million)

34

59

83

108

83

108

2.8%

2.8%

  • with electricity access
  • 11%

    37%

    70%

    80%

    100%

    100%

    3.6%

    4.7%

  • with access to clean cooking
  • 2%

    6%

    46%

    76%

    100%

    100%

    12.2%

    13.7%

    CO2 emissions (Mt CO2)

    3

    12

    24

    41

    36

    74

    5.9%

    8.8%


     


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

     

    Policy Key targets and measures

     

    Performance targets

    • Reduce GHG emissions by 10-20% by 2030 compared to the business-as-usual scenario (138-153 Mt CO2-equivalent gross emissions).
    • Increase electricity generation capacity from 1 500 MW in 2015 to 4 910 MW and achieve 50% energy from renewable energy sources by 2020.

    Industrial development targets

    • Raise annual real GDP growth to 10% by 2021.
    • Build a semi-industrialised country by 2025 in which the contribution of manufacturing to the national economy reaches at least 40% of GDP.

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

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

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    With annual GDP growth of more than 9% in the AC, Tanzania’s economy could be seven-times larger in 2040 than today, but with an increase in energy demand limited to 150% driven by fuel efficiency gains.

    In the AC, diversifying the energy mix and improving energy efficiency are the keys to achieving economic growth while limiting growth in energy demand, with oil, gas and geothermal reducing the share of bioenergy in the energy mix.

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

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

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    Gas accounts for more than half of current power generation, with the remainder coming from hydropower and oil, the latter used mostly for back-up generators.

    Providing access for all and a growth in productive uses lead to a thirteen-fold increase of electricity demand by 2040 in the AC: this is met with an expansion of gas, hydropower and solar PV.

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

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

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    Oil continues to play an important role in end-use sectors, not least as a result of its use by the increasing number of buses on the road as Tanzania has a large bus fleet.

    Gas and electricity use in industry is growing strongly, especially in manufacturing industries, but in the AC, energy efficiency measures have prevented consumption from being 20% higher than current levels.

    Weo2019 Tanzania

    Despite the low access rate (37%) today, the grid represents more than half of new connections by 2030 in the AC given its existing and planned coverage.

    In the AC, around one-third of the remaining population, mainly located in sparsely populated areas far from the grid, would be best reached by stand-alone systems.

    Tanzania use of fuels and technologies for cooking by scenario, 2018-2030

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    Despite policies to promote clean cooking solutions, the number of people relying on traditional use of biomass for cooking declines from 55 million people today to 44 million in 2030 as efforts to improve access outrun by high population growth in STEPS.

    In the AC, LPG and biogas are the least-cost options for almost half of the population, with improved cookstoves the main way to extend access in rural areas.


    Tanzania gas demand and production by scenario, 2010-2040

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    Tanzania oil demand and production by scenario, 2010-2040

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    Tanzania coal demand and production by scenario, 2010-2040

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    Recent large discoveries push up gas production to almost 30 bcm by 2040 in the STEPS. Existing infrastructure helps Tanzania to increase domestic gas consumption.

    Gas demand in 2040 is twice as high in the AC, helped by efforts to promote the use of gas to displace traditional biomass and by support for gas-based industries.

    Tanzania cumulative investment needs, 2019-2040

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    Almost $80 billion of cumulative energy supply investment is needed in the STEPS, with most of it being used to widen access to gas and electricity. 

    This level of investment doubles in the AC, with higher amounts of capital allocated to electricity access and networks.


    A rapid development of offshore resources would help to ensure greater availability of gas, and a robust framework to use export revenues in an effective manner would help to ensure that the country makes the most of those revenues. 

    Maintaining investment in public transport, notably in Dar es Salaam, but also in other cities and between cities and rural areas, would help to facilitate economic growth. Government should also ensure public transport is affordable for all.