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Tanzania’s Renewable Power Market To Grow At 16.8% CAGR From 2021 To 2035, Says Data

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Installed capacity for renewables in Tanzania increased from 69 megawatts (MW) in 2010 to 127 MW in 2021, at a compound annual growth rate (CAGR) of 5.7%, according to recent data. The report notes that the cumulative renewable capacity is expected to rise to 1,115 MW by 2035, growing at an impressive CAGR of 16.8% from 2021 to 2035, driven by Feed-in Tariffs (FiTs) and the rural electrification program.

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According to the latest report, ‘Tanzania Power Market Size, Trends, Regulations, Competitive Landscape, and Forecast, 2022-2035’, the Tanzanian government has placed emphasis on developing renewable power, especially in areas where there is no connectivity to the grid. As a result, renewable power generation is expected to increase from 268-gigawatt hours (GWh) in 2021 to 3,040 GWh in 2035, growing at a CAGR of 18.9%.

To meet rapidly increasing energy demand, Tanzania is currently implementing the National Rural Electrification Program which aims to increase the population’s electricity access from 36% in 2014 to 50% by 2025 and to at least 75% by 2033.

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Attaurrahman Ojindaram Saibasan, the Power Analyst says, “The program aims to ensure electrification of rural areas through renewable technologies such as solar photovoltaics (PV) and onshore wind. The Rural Energy Board (REB), the Rural Energy Agency (REA), and the Rural Energy Fund (REF) were established to promote, stimulate, and facilitate access to modern energy services in rural areas of Tanzania.”

Biopower (55.3%) held the dominant share within renewable power, followed by small hydro (21.9%) and solar PV (20.9%). Tanzania depends significantly on thermal and hydropower for meeting its electricity supply needs. In 2021, hydropower met around 28.4% of the country’s total annual electricity generation. The unpredictability of annual rainfall, however, has created considerable risk in depending on hydropower to meet increased generation demand. Investments in pumped storage could provide a solution. The country is looking at developing onshore wind and solar PV technologies.

Saibasan adds: “Tanzania’s electricity consumption has grown at an average of 4.8% between 2010 and 2021. This rate is expected to rise in the future due to a higher rate of industrialization, as well as greater residential demand as the government increases electricity access rates and boosts rural electrification. The government should bolster renewable power capacity to reduce its reliance on electricity and imports.”

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