Case Study: Tanzania

Grid Feed-In PPA

In 1994, the government of Tanzania set out to remove the generation, transmission and distribution monopoly enjoyed by TANESCO, and began allowing independent power producers to generate electricity and sell it to the grid. However there is no special feed-in tariff in place for renewable energy, which hinders the uptake of more isolated mini-grids. The Energy and Water Utilities Regulatory Authority (EWURA), established in April 2001, handles policy making and regulation of the electricity industry, and in 2005 Rural Energy Agency and Rural Energy Fund were established to promote rural electrification.


In this context, a Power Purchase Agreement was signed between TANESCO and TANWAT. TANWAT generates power for its own use with the surplus being sold to TANESCO for the Njombe minigrid.  According to the TANWAT- TANESCO PPA, the utility has the statutory mandate of maintain the quality of power.


Hybrid model

The TANWAT wood–fired power plant is a subsidiary of Tanganyika Wattle (TANWAT) Company, whose core business is the production of tannin for leather processing.  The plant generates sufficient power to run the factory and workers' quarters, and sells the surplus power at 0.09-0.12 USD per kWh to TANESCO (Tanzania's utility company) through a Power Purchase Agreement (PPA) for the Njombe minigrid.  The power plant is therefore an additional source of revenue to the main company. In the PPA TANWAT is responsible for maintaining power generation while TANESCO for transmission and distribution of power to the end consumer.

Wood-fired Power Plant

The TANWAT wood fired power plant utilizes the waste obtained from wattle tree extracts resulting from the production of tannin, and pine and eucalyptus tree waste from the timber sawmill. It consist of two water tube boilers with a wood consumption of 60-80 tonnes per day, with a rated output steam temperature of 330°C and pressure of 30 bars. The superheated steam from the boiler runs a Dresser rand condensing terry steam turbine at a speed of 5345 RPM that is connected to AVK generators from Germany with a rated output of 3125 kVA at 3.3kV. The generators operate at a frequency of 50 hertz. The plant has a fuel handling and processing facilities that includes a hydraulic feeder or logger, a drum chipper with a capacity of 70m3 loose chips per hour, chip belt conveyer and two silos, each capable of storing 17 tonnes of chips.