Ethiopia seeks consulting support for unique thermal power plant

08 May 2018 3 min. read

Government-owned energy distribution entity Ethiopian Electric Power has appealed to the consulting industry for support with a feasibility study for the proposed Melka Sedi Thermal Power Project. The assignment involves the preparation of a feasibility study, based on the social, technical, and economic costs of the project. 

The Melka Sedi Thermal Power Project is a proposed energy development that is expected to generate nearly 140,000 Megawatts (MW) of power to be distributed across Ethiopia. The project is named after the town in which it is situated, nearly thee hundred kilometres out from capital Addis Ababa. 

The plant is unique in its thermal energy generation in that it hopes to make use of Prosopis Juliflora as a biofuel rather than coal. Native to central and southern America, Prosopis Juliflora is a small plant of the mesquite variety, which is characterised as an “invasive weed” in a number of regions across the world. 

Melka Sedi will source the biomass from the Afar Region in the northeast of Ethiopia. In order to obtain an overview of the policy restrictions in place for using Prosopis Juliflora to generate power, Ethiopian Electric Power – the government agency in charge of the Melka Sedi project – has called for expressions of interest from the consulting industry.

Alongside providing a rough overview of the policy framework around the biomass, the selected consulting firm will also analyse the quantities available in Afar, and estimate the possible volume for regular supply to the power plant. The firm will also create a model supply chain for the biomass, including the infrastructure and equipment required, thereby proving an overview of the operational costs involved in running the plant.Ethiopia seeks consulting support for unique thermal power plantBased on this cost assessment, analysts will be required to suggest two options as the best possible locations for the Prosopis Juliflora plant, based on factors such as distance from the biomass farm and the road, water, and electrical infrastructure available on the way.

In addition to the analysis around Prosopis Juliflora, the consulting assignment also involves a comprehensive feasibility study for the project, based on wide-ranging factors. For one, based on the costs of the biomass, the firm will develop an overall 'life-cycle cost model' for the project, using a discount rate of 10%.

The firm will then delve into the risks of the project, ranging from constrained cash flow to physical factors, which it will determine using sensitivity tests for the factors involved. The risk assessment will also involve an evaluation of health risks for nearby communities, environmental risks, operational risks, and financial risks.

Lastly, the consultants will offer an overview of the overall benefits of the project, ranging from economic advantages to financial gains, as well as some amount of indirect impact that the project may have. 

As the world gravitates towards more renewable forms of energy, African countries are in a position to build renewable sources form scratch. Energy infrastructure in the region has substantially lacked funding, and a number of governments are turning to the consulting industry to help offload previously wasteful methods of energy generation, and establish new, renewable ones.