In November 2013 the Ethiopian parliament approved the new energy law proclamation 810/2013 9 (the Energy Proclamation) to liberate the energy sector by introducing the Ethiopian Energy Authority (EEA). The EEA is responsible for private energy investments in the country and sets prices for the private and state power distributors. Moreover, The EEA also issues licences, determines tariffs, sets performance standards and is responsible for negotiation of tariffs for fully off‐grid independent power projects. A Feed-In-Tariff Proclamation (2011), which is still draft form, is intended to apply to energy projects which are up to an installed capacity of 10 MW.
As of 2014, Ethiopia had 2,000 MW of installed power generating capacity, out of which 1,980 MW (99%) is generated from hydropower plants. Ethiopia’s national development plan, the Growth Transformation Plan (GTP: 2011-2015), promotes the Green Development Strategy with the aim of meeting the demand for energy in the country by providing sufficient and reliable power supply. The key aim is to diversify Ethiopia’s current energy mix by expanding into wind, geothermal and solar energy sources.
Although hydropower, with a total endowment estimate of up to 45,000 MW per annum, is the obvious source for Ethiopia to tap into, the country is leaning towards renewable energy projects which involve a shorter development period than hydropower. In May 2015, 102 x 1.5MW turbines went online in and around Adama and Nazareth making Adama II Wind Farm, with an installed generating capacity of 153MW, the largest wind farm in Sub-Saharan Africa. Ethiopia is set to replace itself at the top of that list when the Aysha Wind Farm Project turbines go online, which are expected to generate an additional 300MW of wind energy.
In July 2015. the Ethiopian Electric Power and the Corbetti Geothermal Company signed a Power Purchase Agreement for the 500 MW of clean geothermal power from the Corbetti geothermal source. Negotiations are currently on going for an additional 500 MW in the Tulu Moye and Abaya areas. The planned 1,000 MW Corbetti geothermal project with an estimated investment volume of US$4 billion will be built and developed in two phases over the 8 to 10 years. Upon completion, it would be Africa’s largest geothermal project.