Best Prospect Industries – Energy
Tanzania’s energy sector remains underdeveloped, particularly the petroleum, gas and electricity sub-sectors. Although endowed with diverse energy sources, including natural gas, hydropower, coal, wind power, and solar power, Tanzania’s energy sources are largely untapped. Tanzania has a per capita electricity consumption of 46/KWh per annum. Approximately 14 percent of the population has access to electricity; consumption is growing at the rate of 11–13 percent annually.
The main sources of energy in Tanzania include:
- Natural gas from the Songo Songo processing plant (191 megawatts);
- Hydropower from TANESCO plants in three main stations and hydro-based electricity from isolated stations (261 megawatts);
- Thermal electricity diesel turbines in Dar es Salaam (100 megawatts);
- Imported diesel for generators (consumption estimated at 1.5 million metric tons);
- Coal at Kiwira coal mines with potential 200MW capacity for energy generation (currently providing 4 megawatts)
Oil exploration in Tanzania has been intermittent for the last 40 years. Recently, however, Tanzania has seen an increase in oil exploration in southern Tanzania and in several off-shore sites as a result of the Tanzanian government signing key production and data sharing agreements.
Extensive offshore gas fields at Songo Songo and Mnazi Bay contain an estimated 44 billion cubic meters of natural gas. Songo Songo’s natural gas resources are currently being exploited by Songas under a gas-to-electricity project launched in 2004. Natural gas presently supplies about 30 percent of Tanzania’s total electricity requirements, but has potential to add significantly more. Natural gas resources at Mnazi Bay are currently underutilized, with only 12MW being produced for rural electrification in Mtwara.
The electricity sub-sector is largely dominated by a state-owned enterprise, Tanzania Electric Supply Company Limited (TANESCO), which has a vertically integrated monopoly in the generation and supply of electricity. The government has allowed Independent Power Producers (IPPs) to generate and sell power to TANESCO, and is in the process of developing a Standardized Power Purchase Agreement.
Hydroelectric energy continues to be the single most important indigenous source of commercial energy in the country. This source has a potential installed capacity of 4.7 GW, of which only about 10 percent is developed. Coal reserves are estimated at about 1.2 billion tons, of which 304 million tons are proven. Significant uranium finds have led to recent calls by Tanzanian officials for assistance in developing nuclear power, though this is still nascent.
