New Bill Appears to Ease Geothermal Investment

A new bill that eases registration and licensing processes for geothermal development companies has been submitted to the Council of Ministers for approval.

Drafted by the Ethiopian Energy Authority last year, the draft regulation categorises the resource into two sections depending on the capacity of energy. Grade one is a geothermal resource that is able to generate electric power, while Grade two is used for agricultural, industrial, medical and recreational purposes.

The bill has also identifies three types of licenses for geothermal developers. Reconnaissance is the first stage in licensing that is granted for two years and is non-renewable. The exploration license allows developers a five-year exploration window that can be renewed for two year-long terms. Wellfield development licenses are the final license issued and allow for 25 years worth of production concession  options that can be extended.

Ethiopian Electric Power, the Ministry of Water, Irrigation, & Energy, regional energy bureaus, environmental bureaus and revenues bureaus, foreign companies and donors have been involved in drafting the bill.

The regulation follows a 2016 proclamation that moved the sector from the then Ministry of Mines to the Ethiopian Energy Authority. The Authority has since formed a new directorate, the Geothermal Resource Development License & Administration Directorate, with sole responsibility to oversee the sector.

The overall process of developing the geothermal resource is unique, according to Tesfaye Kassa, director for the Geothermal Resource Development Licensing & Administration at the Authority.

"Unlike other explorations, geothermal is capital intensive but runs with a minimal cost as a sustainable source of energy," said Tesfaye

Even though Ethiopia began exploring geothermal power generation in 1969, only 10 companies have been licensed so far. The country has a potential of generating 10,000MW of electric power from geothermal sources, according to estimates from field studies.