GENERAL ECONOMIC REVIEW | PRIVATE SECTOR DEVELOPMENT AND CROSS-CUTTING ISSUES|
SPECIAL DEVELOPMENT ISSUE | DEVELOPMENTS IN DIFFERENT SECTORS OF THE ECONOMY

Agriculture
Natural Resources and Tourism
Mining
Manufacturing and Internal Trade
Construction and Land Development
Transport and Communications
Energy
Water
Education and Training
Health
Community Development
Acronomys and Abbreviations

ENERGY

Types of Energy

282.          Energy is an important sector in enhancing economic growth, improving social services and fighting against poverty. The type and amount of energy used in any country have a bearing on its level of development. In general, Tanzanians depend largely on biomass energy. The energy consumption  from charcoal and firewood account for 90 percent of total energy consumption in the country. Petroleum and electricity energy accounts 9 percent. Other energy sources like coal, solar and wind accounts for 1.0 percent of total energy consumed. This pattern of energy consumption signifies that Tanzania has not yet developed other alternative sources of energy.

283.          Commercial energy such as petroleum, electricity and coal is estimated to account for only 10 percent of energy demand in the country. The main sectors using commercial energy are: transport, which consumes 40 percent, manufacturing 24 percent, household 21 percent, agriculture 11 percent, and other sectors 4 percent of the total energy. The low consumption of commercial energy indicate that many economic activities still use traditional equipment and technology which do not require energy, thus, resulting into low economic growth.

284.          Tanzania has abundant resources of sources of energy, electricity, natural gas, biomas, coal and renewable energy. Many sources of energy have not been developed despite that many economic activities require this important resource. However, efforts and various strategies have been taken in developing natural gas, coal, hydropower,  geothermal and exploration of petroleum.

Electricity

285.          The growth of electricity sub-sector increased by 0.1 percent from 2.9 percent in 2001 to 3.0 percent in 2002. Contribution of the sector to the Gross Domestic Product (GDP) continued to be 1.5 percent due to low growth of the electricity sub- sector. During 2002, generation of electric power increased from gigawatt hour (GWh) 2,741.4 in 2001 to GWh 2,791.3. Electricity sales increased from GWh 1,985 in 2001 to GWh 2,327 in 2002.Electricity sale s to households increased from GWh 1,084 in 2001 to GWh 1,120 in 2002. The increase  was due to deliberate efforts by the new management of TANESCO (Net Group Solutions) of collecting the outstanding debts from various debtors.  Also, the increase  was due to increased number of new customers who were connected to electricity. New connections increased from 23,122 in 2001 to 47,147 in 2002 making a total number of customers to be 501,967. Electricity sales for industrial and commercial use decreased from GWh 836 in 2001 to GWh 823 in 2002. Electricity sales to Zanzibar increased from GWh 127 in 2001 to GWh 133 in 2002. This increase was due to rehabilitating of divested industries and deliberate move undertaken by the new TANESCO management of  collecting outstanding debt, cost reduction and improved customer services. Power transmission loss decreased to GWh  714 in 2002 from GWh 727 in 2001.

286.          Installed capacity for generating hydro and thermal electricity for national grid decreased to 644.7 MW in 2002 from 659.6 MW in 2001. The analysis of installed capacity is as follows: Kidatu 204 MW, Kihansi 180 MW, Mtera 80 Mw, Pangani Falls 17.5 MW, New Pangani 66.0 MW, Hale 21 MW, Nyumba ya Mungu 8 MW, thermal 42.1 MW,  others 26.1 MW and IPTL 100 MW.

Coal

287.          Tanzania is estimated to have coal reserves of 1,200 million tones located in the Western and South – Western part of the country. Although this resource is available in large quantities, its exploitation and utilization is very low, due to lack of capital. Nevertheless, the small quantity of coal that is mined is used for electricity generation, which is sold to the Tanzania Electricity Supply Company. Generation of electricity from using coal at Kiwira Coal Mines, declined from 27,536 MWh in 2002 to 26,104 MWh in 2001. During 2002, production of coal declined to 106,250 tones compared to 114,319 in 2001.

Natural Gas

288.          In 2002, investors of Songo Songo gas which are AES, Pan African, TDFL, TANESCO, TPDC and Songas Limited reached an agreement with the contractor (Lasern and Toubro Contractor), tolay pipes for the transportation of gas from Songo Songo to Dar es Salaam.

Petrol

289 . In 2002, the average price of petroleum in the world market was $ 28 per barrel compared to $ 27 per barrel in 2001. On average, retail price for fuel at various fuel filling stations stations in the city of Dar es salaam was shs. 576 for petrol, shs. 546 for diesel and shs. 426 for kerosene per litre. Fuel prices increased due to devaluation of Tanzania shilling against United States Dollar and increase of fuel prices in the world market. During 2002, petrol consumption in the country was estimated to be 1.06 million metric tons compared to 1.1 million metric tons in 2001.

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