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

<strong>The</strong> impact <strong>of</strong> energy use on poor urban livelihoods in Arusha, Tanzania,
Tanzania, despite having considerable oil and natural gas reserves in both coastal
and <strong>of</strong>fshore basins, currently has no national production <strong>of</strong> petroleum. Tanzania has
the Songo Songo natural gasfield, (recoverable reserve <strong>of</strong> 14 billion m 3 and total
reserves <strong>of</strong> approximately 28 billion m 3 ); the benefits <strong>of</strong> the current development
work are not likely to be felt by domestic consumers until well into the future.
<strong>The</strong> government took an initiative to stimulate the use <strong>of</strong> LPG by reducing tax by 50%
in July, 2003. No statistics are available to indicate whether this has resulted in
greater use <strong>of</strong> LPG. <strong>The</strong> findings from this study provide no evidence that suggests
there has been an increased take-up <strong>of</strong> LPG since 2003.
Kerosene is imported by private oil companies, and sold at petrol stations. <strong>The</strong>
established kerosene distribution network facilitates its use in low-income urban and
rural households. It may be more appropriate to subsidise kerosene than electricity
since the benefits are less likely to be enjoyed by wealthier families. (Hosier and
Kipondya:93)
Tanzania has a national supply <strong>of</strong> 860 megawats <strong>of</strong> electricity 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. 36
TANESCO, the 100% government owned parastatal that is responsible for the
national electricity supply has technical shortcomings, poor financial returns and
management problems. <strong>The</strong> government is in the process <strong>of</strong> restructuring 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. Arusha is one <strong>of</strong> the regions with the
highest number <strong>of</strong> households connected to the Grid. Affordability is a key constraint
to electricity use in urban areas as was borne out by this study.
<strong>The</strong>re has been considerable talk about renewable energy but there has been
minimal allocation <strong>of</strong> funding 37 .
3.7.3 Urban energy
Tanzanian cities have weak energy infrastructure and urban areas suffer from
frequent power interruptions as a result <strong>of</strong> inadequate supply due to technical
problems 38 Hosier (1993) notes three main reasons for the heavy reliance on
traditional fuels for urban energy needs:
� low income levels;
� limited energy infrastructure; and
� erratic supplies <strong>of</strong> modern fuels.
36
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.
37
Key Informant Interviews – Ministry <strong>of</strong> <strong>Energy</strong> and Minerals
38
Ageing machinery, lack <strong>of</strong> fuel or spare parts, low water levels especially during the dry season
15 Development Planning Unit, UCL London
Dr. Sheilah Meikle and Patrice North