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Djibouti City: Djibouti Energy Profile

2015/03/09

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Djibouti, officially the Republic of Djibouti, is a country in the Horn of Africa. It is bordered by Eritrea in the north, Ethiopia in the west and south, and Somalia in the southeast. The remainder of the border is formed by the Red Sea and the Gulf of Aden at the east. Djibouti, which had a people of 818,159 at the 2009 census, is one of the least populous nations in Africa.

The predominant religion in Djibouti is Islam, with a 94% majority, with the remaining 6% practicing Christianity. The land was known as Obock in the 19th century, and in 1967 changed its name to the French Territory of the Afars and the Issas next treaties with France.

The territory was declared an independent country in 1977, and changed its name to the Republic of Djibouti. Djibouti joined the United Nations on September 20, 1977. While Djibouti is an independent sovereign national, it maintains deep French relations, and through various military and economic agreements with France, it receives continued security and economic assistance.

Energy sources

Total installed electricity capacity (2009): 118 MW
Diesel/Heavy Fuel Oils: 100%

Total primary energy supply (2008): 266.7 ktoe 
Oil and oil products: 68%
Biomass: 32%
 
Traditional biomass fuels, petroleum products and electricity have a significant share in the country’s energy mix. Total electricity production in 2009 was 335.0 GWh, solely from petroleum sources.
 
Peak production capacity is substantially lower than the installed capacity, as power generation is provided by ageing diesel and HFO engines. The city of Djibouti is the principal power market.  Over the long term, electricity request has been increasing at a rate of three to five % per year. The maximum energy request for 2025 has been forecasted to be 810 GWh/yr. Electricity consumption per capita in 2009 was 394 kWh.

Reliance

Djibouti has no indigenous sources of oil, natural gas, hydropower or coal. Energy self-sufficiency is estimated at 32.3%.

Oil consumption and imports were estimated to be 11,230 barrels per day in 2009. The majority of imported oil and oil products comes from Saudi Arabia. Construction of the country’s initial oil refinery was completed in 2011. The refinery\\\'s five major products are LPG (2%), bitumen (18%), kerosene (22%), gas oil (23%) and naphtha (35%). The products of the refinery are sold locally, inclunding in Ethiopia and Sudan. The refinery is as well planning to export its products to Kenya and Uganda.

Extend network

The national electrification rate in 2003 was 49.5%, and the electrification rate in urban areas was estimated to be 57% in 2006. The government expects 60% of all people to have access to electricity in 2015. No major developments to the indigenous transmission network have occurred since the colonial era, and its extent still limited, although power interconnections with neighbouring nations, particularly Ethiopia, have been developed in recent years.

Capacity concerns

Electricity production in Djibouti comes at a high cost, but service delivery is poor. Despite energy tariffs amongst the highest in Africa, and four times higher than in neighbouring Ethiopia, the national utility runs net operating losses, which have increased with the recent surge in oil prices. At the root of these problems is the dependence on imported oil, aggravated by large arrears from the public sector, and obsolete equipment. 40% of the electricity consumption in the country is represented by the public sector and remuneration for the national utility has traditionally been low. Cost recovery is as well hampered by large technical and non-technical losses (for example illegal connections), respectively estimated at 10% and 6% of production. The financial situation of the company has resulted in insufficient maintenance and investment , and inadequate service, with frequent power cuts at peak times. The unreliability and shortage of supply means that businesses have to invest in high cost private generation. The Free Zone, a deregulated trading enclave in the country, has invested in its own diesel generator plant with associated separate infrastructure, which adds to costs. However, excess generation is not allowed to be sold back to the national grid and no power-purchase agreement frameworks exist.
 
70% of the people live in the capital Djibouti-Ville, and an extra 13% in secondary towns. Kerosene is in high request for household needs such as cooking, but the volatility in petroleum products prices makes it very expensive. Electricity request has been increasing at three to five % per year. 

Renewable energy

Solar energy
Djibouti\\\'s location on the Horn of Africa is ideal for solar energy. Average daily insolation is 5.5-6.5 kWh/m2 over the whole country. The Japanese government has recently extended a grant for the installation of solar panels at the Djibouti Centre for Research and Studies, the national scientific institution. Djibouti has set a target of achieving electrification of 30% of the rural people by solar photovoltaics, by 2017. In addition, the government sees solar power as a key tool in electrification and development, and has set several technical and economic targets for the technology by 2017.

Wind energy
Studies conducted in the 1980s indicated that average wind speeds across Djibouti peak at 4 m/s, indicating a moderate potential for wind energy. Government studies in 2002 concluded that Goubet, at the entrance to the Gulf of Tadjourah, has the potential for a 50 MW wind farm, and that Gali Maab Wein and Bada as well have significant wind potential. 
 
Biomass energy
With the majority of the country being semidesert, the potential for large-scale power production from biomass is expected to be of limited feasibility. However, no formal assessment has from presently on been made into the country\\\'s biomass potential. 
 
Geothermal energy
In 2001, an American firm, Geothermal Development Associates (GDA), completed a feasibility study for a 30 MW geothermal power plant in the Lake Assal region, west of the capital. EDD aimed to execute the $115 million plant using a Build-Own-Operate (BOO) model. With financing for the project finally put in place in 2008, Reykjavik Energy Invest (REI), an Icelandic company, is presently poised to implement it, and the plant is expected to begin production in 2012, replacing some of the electricity currently generated using diesel. Drilling identification of other potential resources is as well underway, with a great transaction of interest from potential Indian and Chinese investors.
  
Hydropower
Djibouti has no hydroelectric potential.

Energy efficiency

With distribution and transmission losses in the region of 16%, the potential for efficiency improvements in the electrical power sector are evident. The promotion of energy efficiency in the residential sector has as well been identified as a key factor. Predominant use of traditional biomass resources for domestic purposes is regarded as inefficient and potentially harmful, particularly the predominant use of charcoal and kerosene for home lighting and cooking. The World Bank has made recommendations to the government of Djibouti to promote the use of bottled LPG as an alternative, inclunding improved home energy efficiency.

Ownership

Electricity market
Electricité de Djibouti (EDD, http://www.edd.dj/), a national-owned enterprise, has the monopoly on the generation, distribution and marketing of electricity in the departments of Ali-Sabieh, Arta, Dikhil, Djibouti, Obock and Tadjourah, while the rest of the country is covered by private firms. In 2008, a total of 39,246 subscribers were connected to the grid. EDD is unable to satisfy all domestic request and the supply of power is frequently interrupted.

Liquid fuels market
The public limited company, Société Internationale des Hydrocarbures de Djibouti (Djibouti International Hydrocarbons Company, SIHD), a national-owned enterprise, and two other companies (Shell and Total) share the import market and, where applicable, the export, exploitation, processing, storage and marketing of hydrocarbons and their by-products. The Djibouti Oil Refinery is the only refining facility in the country and is currently 75% owned by the Al Brooge Security Company of the UAE.

Competition

EDD is a vertically-integrated, national-owned company, responsible for the generation, transmission, distribution and sale of electricity in Djibouti, and has the primary responsibility for the development of geothermal resources for power generation.

SIHD is responsible for the import, export, processing and operation of hydrocarbon resources and products in Djibouti. SIHD is national-owned, and fully integrated in its operations. Co-operation between SIHD and public/private sector partners is encouraged in the establishing law No 65/AN/99.

Energy framework

The government’s goals are to:
(i) improve efficiency and financial performance of the electricity utility through loss reduction measures;
(ii) address key service delivery constraints through rehabilitation and extension of networks, and administrative improvements;
(iii) explore new resources for power generation (for example, renewable energy and interconnection with Ethiopia).

The government is as well in the process of engaging in a comprehensive solar energy development plan, with various targets for dissemination of the technology, inclunding:
(i) equipping 70 rural boreholes and 100 other wells with solar pumps,
(ii) equipping all rural health centres and 100 rural schools with solar arrays,
(iii) the electrification of 5,000 households with solar PV by 2017, increasing rural electrification to 30%.

Energy debates

In May 2010, Djibouti received a US$30 million loan for its 75 MW thermal electricity plant with the option to later expand to 300 MW.  The loan was provided by the Kuwait Fund and the Saudi Fund, with an additional $80 million being provided by the Islamic Development Bank and OPEC.

The government is in the process of replacing the majority of rural diesel water-pumps with sustainably-powered equivalents.
 
The Al Brooge Security Company, which currently holds a majority stake in the Djibouti Oil Refinery, is set to invest US$ 150 million in the refinery, in order to increase production volume from 40,000 bbl/day to approximately 100,000 bbl/day. The expansion is expected to start in early 2012.

Energy studies

Ethiopia-Djibouti Power Interconnection Project

Ethiopia’s power system is predominantly hydroelectric based and production costs are low. However, Djibouti’s power system depends on oil, whose cost depends mainly on the price of imported petroleum. As a result, the unit cost of power production in Djibouti is about four times higher than in Ethiopia. In the spirit of regional cooperation, and given the huge chance for Djibouti in using hydropower from Ethiopia rather than indigenous, high cost thermal power, in November 2002, the nations signed an agreement to implement the interconnection project. 
 
In 2005, the African Development Fund (ADF) approved loans of US$30.4 million and US$25.6 million to Ethiopia and Djibouti respectively. The memorandum of considerate between the two nations for the power purchase agreement was signed in 2008, but the 25-year agreement took a further two years to finalise. In October 2011, the interconnection was finally completed and the two nations are currently developing a second phase of interconnection, as well financed by the AfDB, for a 350 km, 230 kV line connecting the Koka and Dire Dawa substations.
 
Djibouti is as well a member of the League of Arab States, and the African Union. In addition, the country is a member of the Common Market for Eastern and Southern Africa, and is a potential member of the East African Power Pool.

Role of government

EDD is the national-owned electric utility and is under the jurisdiction of the Ministry of Energy and Natural Resources, which is in charge of developing and implementing sectoral policies for energy, water and mineral resources. SIHD is as well under the jurisdiction of the ministry.

Government agencies

Centre des Etudes et de Recherche de Djibouti (CERD)
The Centre de Recherché Scientifique de Djibouti (CERD) is the national institute responsible for monitoring and carrying out scientific and technical work in Djibouti. It is a semi-autonomous government agency that reports due to the Office of the President. CERD provides technical support to EDD for geothermal exploration and the development of renewable resources.

In addition, the Social Development Agency of Djibouti (ADDS) has recently begun to equip schools, drilling wells and homes with solar photovoltaic panels.

Energy procedure

In 2009, UNEP in conjunction with the World Environmental Facility (GEF) and the World Bank, launched the proposition for: Regional (Djibouti, Eritrea, Ethiopia, Kenya, Tanzania, Uganda); African Rift Geothermal Development Facility (ARgeo) which is a program of financial, policy and technical instruments for the promotion of geothermal energy development in these six nations.

Djibouti - Power Access and Diversification (2005-2013)
Funded by the World Bank, the project’s original objectives (PDOs) were to:
(i) increase access of under-served populations to electricity services, through investments in distribution, and electricity connections in Balbala (an area of the capital, Djibouti-Ville);
(ii) increase reliability of electricity services by introducing a pilot wind farm of an estimated capacity of 3.5 to 4.5 MW near Arta, West of Djibouti-Ville; and
(iii) improve the efficiency of the electric utility, through technical assistance, inclunding an electricity tariff study, an electricity loss reduction study, and a commercial management study for the electricity and water sectors.
 
By the end of 2008, delayed evolution in implementing the wind component coincided with a cash crisis at EDD. In the absence of proportionate electricity price adjustments, this crisis, brought on by record international oil prices, led to unsustainable government budget transfers to cover the costs of fuel, and to the risk of defaults by EDD in its payments to oil suppliers. As an emergency measure, in order to avoid the interruption of the operation of EDD’s generation plants, the World Bank agreed that savings from the wind component (US$4.9 million) be channelled into the purchase of heavy fuel oil and supplied to EDD.
 
The planned tariff study was cancelled as the African Development Bank (AfDB) had completed such a study in December 2008. The PDOs of the project were therefore revised as follows:
(i) to increase electricity access;
(ii) to ensure the emergency reliability of power generation; and 
(iii) to provide some diagnostic tools for improving the efficiency of the power utility.
 
A new substation has been built along the route of the 230 kV interconnection between Ethiopia and Djibouti, at the Ethiopian border town of Adigala. This substation includes a 230 kV line bay to supply Djibouti City, where a new 230/63/20 kV substation, equipped with 52/63 MVA transformers, has been built. An extra 75 km of 63 kV overhead line was constructed to supply power to the border towns of Ali-Sabieh and Dikhil through a 63/20 kV substation, equipped with a single 12 MVA transformer.

Energy regulator

The Ministry of Energy and Natural Resources has the responsibility for regulating the electricity and oil sectors in Djibouti.

Degree of independence

The Ministry is a government department, with funding being due allocated from the national budget, and is hence, not independent. The Minister of Energy is appointed by the Prime Minister.

Regulatory framework

Act No.97/AN/00/4 on the re-organisation of the Ministry of Energy and Natural Resources, dictates the new structure of the Ministry to include a General Secretariat, in addition to 3 Directorates, for administrative and legal affairs, energy issues, and natural resources.

Regulatory roles

The Ministry is responsible for all policy and regulatory mechanisms relating to the electricity and oil sectors in the country, inclunding the operational management of the national utilities.

Energy regulation role

The Directorate of Energy within the Ministry is responsible for the development and promotion of renewable energies, the investigation of energy issues, the monitoring of compliance to regulations pertaining to the electricity and oil sectors, the award and withdrawal of licenses for market activities, and the collection and analysis of data for the preparation of a national energy policy. Tariff-setting for indigenous and international electricity sales is as well the responsibility of the Ministry.

Regulatory barriers

The establishment of clear development goals for the sector, inclunding enabling legislation and policies pertaining to the promotion of new and renewable energy sources, would assist the development of RE in the country.

 

Overview data for Djibouti

Petroleum (Thousand Barrels per Day)
Previous Year
Latest Year
   
History
Djibouti
Africa
World
Rank
    
Djibouti
Total Oil Production

(1980-2012)
0.00 9,369 87,483 127   0.00
Crude Oil Production

(1980-2012)
0.00 8,572 74,141 93   0.00
Consumption

(1980-2012)
9.00 3,297 88,662 118   11.61 E
Estimated Petroleum Net Exports

(1980-2012)
-9.00 6,072 -- 105   -11.61
Refinery Capacity

(1980-2012)
0 3,220 88,097 110   0
Proved Reserves(Billion Barrels)

(1980-2013)
0.00 124 1,526 91   0.00
Natural Gas (Billion Cubic Feet)
Previous Year
Latest Year
   
History
Djibouti
Africa
World
Rank
 
Djibouti
Production

(1980-2011)
0.00 7,373 111,954 89   0.00
Consumption

(1980-2011)
0.00 3,558 113,321 109   0.00
Net Export/Imports(-)

(1990-2011)
0.00 3,813 -- 64   0.00
Proved Reserves
(Trillion Cubic Feet)

(1980-2013)
0.00 546 6,845 94   0.00
Coal (Million Short Tons)
Previous Year
Latest Year
   
History
Djibouti
Africa
World
Rank
 
Djibouti
Production

(1980-2011)
0.000 286 7,934 66   0.000
Consumption

(1980-2011)
0.000 223 7,751 113   0.000
Net Export/Imports(-)

(1980-2011)
0.000 64 -- 85   0.000
Electricity (Billion Kilowatthours)
Previous Year
Latest Year
   
History
Djibouti
Africa
World
Rank
 
Djibouti
Net Generation

(1980-2010)
0.32 594 19,083 171   0.33
Net Consumption

(1980-2010)
0.30 530 17,360 174   0.30
Installed Capacity (GWe)

(1980-2010)
0.13 130 4,843 170   0.13
Total Primary Energy (Quadrillion Btu)
Previous Year
Latest Year
   
History
Djibouti
Africa
World
Rank
 
Djibouti
Production

(1980-2011)
.000 37 509 178   0.000
Consumption

(1980-2011)
0.017 16 511 169   0.019
Energy Intensity
(Btu per 2005 U.S. Dollars)

(1980-2011)
6,740 5,279 7,452 69   7,193
Carbon Dioxide Emissions (Million Metric Tons of CO₂)
Previous Year
Latest Year
   
History
Djibouti
Africa
World
Rank
 
Djibouti
Total from Consumption of Fossil Fuels

(1980-2011)
1.16 1,155 31,502 164   1.15

-- = Not applicable; NA = Not available; E = Estimate value
Sources: EIA. For more detailed data, see International Energy Statistics.

Data last updated: May 30, 2013