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Ethiopia is known as the “Water Tower” of East Africa, and in keeping with this reputation, has embarked on an ambitious program to meet the vast majority of its energy needs by using this abundant resource, water. No less ambitious is a relatively recent strategy by the government to generate energy using another available resource, wind. Projected to produce 890 Mega Watt of energy for the country by the end of the Growth and Transformation Plan (GTP), it is expected to be part of the estimated 8,000 MW of power expected to be added to the national electrical grid.
Capital’s Elias Gebreselassie recently sat down with Pierre Pesnel, representative for Vergnet Wind Turbines, the company constructing the 120 MW Ashegoda wind farm, to discuss the potential of wind energy and the wind projects the company is currently working on.
Capital: Tell us about Vergnet Wind Turbines and what it does in Ethiopia?
Pierre Pesnel: I represent Vergnet Wind Turbines, a 21 year old French company manufacturing wind turbines in France and exporting it all over the world. It has installed about 1,000 turbines so far, and was awarded a contract in Ethiopia three years ago to build a 120 Mega Watt Wind Farm in Mekelle, 783 kms north of Addis Ababa. This week, together with Laurent Vergnet, General Manager of the company, we met with our client the Ethiopian Electric Power Corporation (EEPCo) to hand over the first phase of the wind farm, consisting of wind turbines producing seven MW of electricity. The Engineering, Procurement and Construction (EPC) contract we signed with EEPCO included the construction of a huge sub-station to connect the wind farm to the grid on high voltage lines. We handed over the sub-station in April 2012, and the first set of turbines has been producing power since then. After a period of procedural testing and approval, we handed over this part of the project to the client.
Capital: It is a well known fact that wind energy is one of the most abundant potential energy sources in the world, but it is still not being taken seriously as a real form of alternative energy. What would you say are the challenges facing the wind energy sector and its potential to be competitive?
Pesnel: That’s a big question, because you’re talking about a civilization’s ability to adapt. It is really dependent on the will of all people and all governments to implement and change the way we are living and producing energy. Wind energy started being really efficient and competitive around 20 years ago, so it’s still a very young industry and needs the support of the government in terms of adapting the laws and regulations of a given country for efficient implementation and awareness of the issues involved. Everything, in terms of laws and regulations, has been designed to address the needs of fossil fuel energy or hydroelectricity, but not wind or solar energy. The mentality is changing slowly, especially in Europe and the United States, because the technology was developed there, and it’s also spreading slowly to countries in the south. The pace has really picked up in the last 20 years and the technology has made rapid advances.
Ethiopia has great plans for implementing wind energy and the government is committed; feasibility studies are conducted and projects are awarded through contracting. Our project, the Adama Wind Farms, which is being handled by Chinese companies, is a good step in the right direction but the bottleneck, in many cases, is in adapting the political and legislative framework of the country to attract foreign investors and foreign companies; that is the major obstacle in various countries. Ethiopia is moving ahead, with international cooperation, to allow for instance, private investors to come and build wind plants and to sell the electricity to the national electric company. This allows the Country to purchase the electricity, which makes for lighter spending over the years, without costly investment…. but we could talk about this for hours. It’s complicated, but it is moving ahead in the right direction.
Capital: One of the problems Ethiopia is facing with its use of Hydro Power as a primary source of energy is that of seasonal variability, and problems like drought… In this respect, can wind energy be seen as a sustainable or reliable form of energy for Ethiopia, during this period of rapid development?
Pesnel: I am not a specialist in hydro-power, so I don’t know what they do to predict the weather, but it’s basically linked with the rain, I think. When it comes to wind and wind farms, before you start building, you do exhaustive and detailed studies on the wind patterns on site, to know how much wind you’re going to get over the years, months and weeks, and you can have very precise forecasts. It’s possible to anticipate how much energy the wind farm will add to the grid, and it’s possible for the national electric company to know, during periods with relatively calm winds, how to complement the energy supply with other sources. Working very closely with weather stations and weather companies, you can forecast exactly how much energy you are going to be able to produce. In the case of Ethiopia, it’s really good because most of the energy is going to come from hydro power sources. It creates what we can call a ‘seasonal complement’, between wind and water. In almost all countries of the world, when you have rain, you don’t have wind and vice versa. Because of this fact, you can have year-round energy from renewable and sustainable sources. There is a saying which explains this phenomenon; “When the dam is low, the wind will blow.” Therefore, all these resources will provide electricity to the grid.
Capital: What kind of technology are you using to construct the wind turbines? Can you tell me about the recent design changes made to the wind turbines?
Pesnel: You have to understand that specific wind turbines are designed for specific wind regimes; in low wind areas you have bigger turbines with bigger rotor diameters, and where the wind is stronger, you tend to have smaller turbines, because the effect of the wind, in terms of wear and tear of the structure is greater. The original plan for Ashegoda was to use 120 identical wind turbines, because the site was close to the city of Mekelle, and we believed we could use the same kinds of turbines. During the planning of the project, we discovered that, due to the location of the airport at Mekelle (Alula Aba Nega International), part of the turbines of the wind farm could not be installed where it was originally intended, and had to be moved something like 10 kilometers north of the original site. Unfortunately, the original wind turbines could not be adapted to the new site so we proposed to change the turbines to more suitable ones, and EEPCO agreed to. The first part of the project was completed using 1 MW producing Vergnet turbines, and during phase two and phase three of the project turbines which produce 1.67 MW and made from steel obtained from a French company, Alstom, is being used.
Capital: In terms of participation in the project, do you have a strategy to involve and encourage local companies so that in the future they can efficiently operate and/or produce parts of a wind turbine?
Pesnel: This project is a construction project, so there was no technology transfer agreement. So, after the end of this project, Ethiopia will not manufacture these kinds of wind turbines. But, one very important part of the project will be the training of people from EEPCO, following the period of operation and maintenance on the wind farm that we’re going to perform for five years after the completion of the project. The Corporation’s personnel will be with us every step of the way and learn how to operate the turbines and do maintenance, so they will be self-sufficient and autonomous in all those areas. What has been manufactured and done on site are some meteorological masts, for measuring the wind. So I think that since it was Mekelle University and some subcontractors that were making the towers, they are now able to construct towers for doing feasibility studies around the country. There were also some internship programs with Mekelle University where some students were able to work on the project, learning how to manage projects, civil work, and supervision and so on. Currently we have a total of 300 people working on site, including 10 expatriates.
Capital: How much do you expect it will cost once it’s finished?
Pesnel: The total initial cost of the project was 200 million Euros and EEPCO hasn’t incurred any additional cost so far. The project has been financed by private and public funds, both from French sources. The French Development Agency (AFD) has provided what’s called a concessional loan to EEPCO at fair credit rates, and the other part of the project has been financed by BNP, which is a French bank and a consortium of other banks.
Capital: Ashegoda wind farm has been the talk of the town for more than four years, and recently, a Chinese company handed over the 51 MW Adama I wind farm, and was awarded the contract for the 151 MW Adama II wind farm. What would you say were the challenges you faced in trying to hand over the project on time?
Pesnel: There are many reasons; the first is about the time required to manufacture and supply of the materials. Industrial history is about supply and demand, so all the turbines we supply to this project are manufactured especially for this project. We never had any stock or inventory of materials. That is why it takes longer. Today, the market’s demand is low and many suppliers have large stocks of turbines, therefore, they can deliver what is required rather quickly. That was not the case three years ago and it was not the case ten years ago. The second thing is, in China everything is done on a larger scale, so when they decide to open a factory for turbines they don’t open a factory for 10 turbines, they open a factory for 10,000 turbines, and they are able to produce quickly. The working conditions on site also differ; the Chinese tend to send a lot of their own people here and probably use fewer local workers. They might send thousands of Chinese laborers to work day and night, so you can’t compare the way we operate with theirs. Also, distance matters; we’re in Mekelle and the route to Djibouti from Mekelle and back to Djibouti is more complicated than the route from Djibouti to Adama, which is close to Addis Ababa. Although the main issue is supply, like I told you the wind turbine industry is pretty depressed. Many Chinese companies were also government companies at the beginning, which transferred to private ownership later on, with a clear statement from the Chinese government that they should go outside their country and find new markets and bring currencies to their country, so their situation is very different from ours. The Ashegoda wind farm will be completed next year and we will have delays here and there because of the various technical issues we faced and we will face, but Ashegoda was the first one in Ethiopia, so everything EEPCO has learned during this wind farm project they can use for the next wind farm thereby saving time for both of us. The first phase has taken longer than expected but phase two and phase three will be much quicker because the first phase was a learning experience for everybody, and the delay will not exceed 25% or at maximum 30% of what was originally scheduled.
Capital: What was the originally scheduled date of completion?
Pesnel: The original schedule was 36 months. We had a lot of problems due to weather, transportation of components, roads and bridges that were destroyed, preventing components from reaching the site, availability of the sites, and industrial issues with Vergnet. The wind turbine market is completely different in 2012 than it was in 2008; it’s still an emerging industry.
Capital: Do you have the month for the completion date for the project?
Pesnel: I can’t give you the precise date now. We’re still trying to find a solution with EEPCO to speed up the process so we can complete the job. I can say for sure that it’s slated to be completed by mid-2013, and we’re working towards that.