The Impact of Energy Use on Poor Urban Livelihoods in ... - DfID

• Electricity
A Study <strong>of</strong> the <strong>Impact</strong> <strong>of</strong> <strong>Energy</strong> on Poor Urban Livelihoods in Arusha, Tanzania
Tanzania has a national supply <strong>of</strong> 860 megawats with 65-70% generated by HEP
dams and the rest by diesel and coal fired turbines (i.e. thermally produced). It is not
possible for the country to have a stable fuel mix as fuel swapping between cheaper
HEP (6c per unit) and more expensive diesel (15c per unit) generated electricity is
sometimes necessary when the rains are poor. 50 It needs to be noted that 70% <strong>of</strong>
foreign exchange goes towards developing electricity. 51 Although there are marked
differences across the country in the cost <strong>of</strong> producing electricity there is only one
domestic tariff, irrespective <strong>of</strong> location.
TANESCO, a 100% government owned parastatal is responsible for the national
electricity supply. Not only is it currently charging the highest tariffs in Eastern Africa
52 but it also has ‘technical shortcomings involving massive load shedding, low
financial returns and management problems spanning cumbersome organisation
structures, overstaffing and poor operation and maintenance ‘.Kigoda (2003) <strong>The</strong>
government is in the process <strong>of</strong> restructuring and divesting TANESCO which has
been plagued with a litany <strong>of</strong> problems. Katyega et al. (2001) cite 2002 review <strong>of</strong>
energy sector policies and the restructuring <strong>of</strong> TANESCO and has recently entered a
contract management deal with a private sector company in South Africa which has
already resulted in changes to top management.
Approximately one tenth <strong>of</strong> households in Tanzania report a connection to the
National Grid but this is largely in urban areas. Dar-es-Salaam, Kilimanjaro and
Arusha are the regions with the highest number <strong>of</strong> households connected to the Grid.
Only 2% <strong>of</strong> rural households report a connection 53 . Affordability is a key constraint to
electricity use in urban areas as was borne out by this study.
• Renewable <strong>Energy</strong>
In energy planning the focus has been to talk a lot about renewable energy but when
it comes to implementation there has been minimal allocation <strong>of</strong> funding 54 . Although
a number <strong>of</strong> renewable energy sources are being researched. <strong>The</strong>se include microhydro,
natural gas, geothermal, solar and coal. (Kironde:1998)
<strong>The</strong> major problem with solar energy is the high tariffs on imported solar energy
equipment, especially batteries, which make initial installation costs high 55 . Also it is
limited to non-productive end uses since a solar home system essentially provides
enough energy for 3 lights, TV and radio. Its major advantage is its reliability and
negligible running costs.
C.6.3 Urban energy
<strong>Energy</strong> supply is critical in urban areas for supporting economic activities and social
infrastructure for providing lighting and power for domestic, commercial and public
use. Urban areas suffer from constant power interruptions as a result <strong>of</strong> inadequate
supply due to technical problems 56 Hosier (1993) notes that Tanzanian cities have
50
If the rainfall is good, HEP is run; if there is not enough water, then thermal has to be run
and the government is making an effort to replace diesel turbines with open cycle gas
turbines in an attempt to reduce the costs <strong>of</strong> electricity generation.
51
Key Informant Interview, Assistant Commissioner, Ministry <strong>of</strong> <strong>Energy</strong> and Minerals
52
CHAPOSA, 2002
53
HBS 2000/01
54
Key Informant Interviews, Ministry <strong>of</strong> <strong>Energy</strong> and Minerals
55
TSh400,000 – 500,000 per 100 watts. <strong>The</strong>re is a tax exemption on solar panels but this is
more difficult with batteries since these could be for household use or for use in vehicles.
56
Ageing machinery, lack <strong>of</strong> fuel or spare parts, low water levels especially during the dry
season
Development Planning Unit, UCL London
Dr. Sheilah Meikle and Patrice North