Ethiopia’s GERD Dam is 97.6% complete

From the newsletter
Africa's largest hydropower project is nearing completion, according to Ethiopia’s Ministry of Water and Energy. Construction has reached 97.6%, and the government is now seeking more funds from financial institutions and the public to ensure its completion. The project has been primarily funded by Ethiopian taxes.

• The dam, commonly known as the Grand Renaissance Dam (GERD), has a production capacity of 5 GW, revised from an initial 6 GW, and is located in the northwestern Benishangul-Gumuz region on the Blue Nile River.

• On February 20, 2022, the dam generated electricity for the inaugural time, supplying 375 MW to the grid. A second turbine also rated at 375 MW, was commissioned in August 2022. The third and fourth turbines, each with a capacity of 400 MW, were commissioned in August 2024.

More details

• Africa's installed hydropower capacity is approximately 45 GW, contributing about 17% of the continent's electricity generation.  There is significant untapped potential, estimated at over 300 GW.

• However, the continent's uptake of hydropower has been slow, with only 13.3 GW of capacity installed in the last decade – roughly 1 GW annually. This is low compared to other renewables like solar, which have grown to over 2 GW of annual installations from less than 300 MW cumulative installations in 2011.

• Over the last few years, we have seen a resurgence of interest in hydropower dams. In the Democratic Republic of Congo, there is a plan to construct the Grand Inga Dam, with a planned capacity of 40 GW, which would make it the largest hydropower plant in the world. Tanzania is nearing completion of its Julius Nyerere Hydropower Plant with a 2,115 MW capacity. Mozambique plans to build the Mphanda Nkuwa Dam with a 1,500 MW capacity, and Kenya has plans for the Grand Falls Dam with a 1,000 MW capacity.

• Hydropower, the once-forgotten giant, is slowly coming back. Projections by the International Hydropower Association estimate that hydropower capacity in Africa could exceed 100 GW by 2030.

• But hydropower faces stiff competition from wind and solar technologies, which have seen their prices more than halved over the past decade. While hydropower technology is more mature, less has been done to bring its costs down. Currently, the levelized cost of energy (LCOE) – the cost of generating electricity over the lifetime of a power plant – for wind and solar is often comparable to or even lower than that of hydropower.

• Renewable energy's intermittency provides an opportunity for hydropower. It can be used to hybridize energy plants, ensuring balance and stability in electricity generation. There is also the option of building pumped hydropower storage, although this is more complex, especially considering the potential for displacing communities.

• However, hydropower projects have longer lead times. Larger projects take over 10 years on average to construct due to the complexities of land acquisition, permitting issues, and the numerous environmental impact assessments required for project approval. On the other hand, solar projects have less impact on the environment and can sometimes be integrated within communities.

Our take

• Hydropower holds great potential, especially in this era of renewable energy expansion. Its consistent output makes it a reliable source of baseload electricity. This means that without batteries or other forms of energy storage to compensate for the intermittency of solar and wind power, these renewable sources cannot effectively function unless hydropower is available to stabilize the grid. Therefore, hydropower use might continue to grow to support the increasing integration of solar and wind power in the future.

• One major challenge, however, is the cost of hydropower and the duration of construction, which often leads to increased project costs. Governments can address this risk by streamlining the permitting and licensing process, ensuring projects adhere to planned timelines to avoid incurring unnecessary expenses and deterring investors.

• Simultaneously, increased private sector involvement through public-private partnerships can be an effective avenue for governments to secure funding for such projects.