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Energy Sector


The Energy Sector Overview

The energy balance is dominated by biomass-based fuels particularly fuel-wood (charcoal and firewood), which are the main source of energy to both urban and rural areas. Biomass-based fuel accounts for more than 90% of primary energy supply. Commercial energy sources i.e., petroleum and electricity, account for about 8% and 1.2%, respectively, of the primary energy used. Coal, solar and wind account for less than 1% of energy used.

Other abundant, but so far not fully tapped, indigenous energy sources which could be harnessed to meet the growing energy requirements include; hydropower, coal, natural gas, uranium, solar, wind, and geothermal energy. Hydropower potential is estimated at 4.7 GW, coal reserves are estimated at about 1,200 million tonnes, of which 304 million tonnes are proven. Natural gas is estimated at 45 billion cubic metres of proven reserves.

Tanzania continues to rely on imported petroleum products. Electricity generation is mainly hydro-based, while thermal plants provide electricity for peak loads. Development of natural gas for electricity is ongoing. The dissemination of renewable energy technologies have been limited to the promotion of improved stoves, improved charcoal production techniques, solar, biogas and windmills and to a lesser extent photovoltaics. Initiatives to increase utilisation of coal for electricity generation are being explored.

The National Energy Policy of 2003

The National Energy Policy objectives are to ensure availability of reliable and affordable energy supplies and their use in a rational and sustainable manner in order to support national development goals. The national energy policy, therefore, aims to establish an efficient energy production, procurement, transportation, distribution and end-use systems in an environmentally sound and sustainable manner.

Investment in Rural Energy

85% of the total energy is consumed in the rural areas where the majority of Tanzanians live. Biomass, particularly wood-fuel, constitutes 90% of rural energy consumption, which has significant impact on the process of environmental degradation. Access to electricity in rural Tanzania is only about 1%.

The National Energy Policy of 2003 recognizes that improved energy supply in the rural areas through public and private sector participation, will contribute significantly to the improvement of the welfare of the rural population and to the attainment of sustainable economic growth. For these reasons, the Rural Energy Agency (REA) was established and entrusted with the role of promoting, stimulating and facilitating improved access to modern energy services in rural areas where more than 85% of Tanzanians live, through empowering both public and private sector initiatives in rural energy. (See Rural Energy Act, 2005).

Addressing energy requirements in rural areas is in line with the provisions contained in the Tanzania Development Vision 2025.

Regulatory Regime

In accordance with the concepts of the market economy and in order to promote effective competition, economic efficiency, consumer interests and financial viability of suppliers the Energy and Water Utilities Regulatory Authority (EWURA) was established. (See Energy and Water Utilities Regulatory Authority Act, 2001).

Among the main functions of EWURA are the following: issuing, renewing and canceling licenses; establishing standards for goods and services; and regulating rates and charges.

Mission & Vision

Mission: The Mission for the energy sector is to create conditions for the provision of safe, reliable, efficient, cost-effective and environmentally appropriate energy services to all sectors on a sustainable basis.

Vision: The Vision of the energy sector is to effectively contribute to the growth of the national economy and thereby improve the standard of living for the entire nation in a sustainable and environmentally sound manner.

By fulfilling its mission and vision, the energy sector will contribute to social economic development, and in the long-term perspective, poverty eradication.

Mandate Documents