Tanzania is a developing country that is turning to more renewable energy sources to address some of its biggest energy concerns. Currently only 14% of the country is electrified and this drops to 2% in rural areas. About 40% of the electricity is generated through hydroelectricity which becomes unreliable during droughts, which are expected to increase in frequency and severity with climate change. The Tanzanian economy has experienced some deflation making imported fuels such as diesel more expensive. Several microgrids are powered entirely by diesel and the electricity production costs in these systems can be nearly four-times as high as in the central power grid.
Distributed generation projects present a major opportunity for Tanzania. They can cost-effectively bring electricity to rural areas, do not rely on imported fuels, and can provide local income to grow the economy. But renewable projects traditionally faced several barriers: a lack of local experience implementing projects, skepticism among private sector participants on the profitability of a project, complicated regulations, and lack of financing institutions.
To address these issues Tanzania launched the Small Power Projects (SPP) program. This program established a single body, the SPP cell, to streamline the regulatory project, host international knowledge exchanges, and establish a feed-in-tariff. These services were provided to distributed generators with a plant capacity less than 10 MW. The program has successfully assisted five biomass renewable power plants with a combined capacity of 28.3 MW and has received application for an additional 10 plants with a combined output of 60 MW. The program has also been responsive to feedback and criticism. It has implemented changes to its rules since 2009 to continue growing the adoption of renewable energy. Several lessons have been learned by the program operators which include: