While Ethiopia has made significant strides in improving production of electric power, the distribution of the available power supply requires quick remedy as frequent power outage is causing damage on households and businesses alike.
The service sector, small businesses and mega projects are incurring loss because of the frequent power outage, which results in declining sales and forces them to spend a considerable amount of money on running generators. It also hinders their ability to operate with full capacity.
The frequent power outage occurring all over the country has become a perennial issue. The repeatedly fluctuated and interrupted electric power within the country is causing a lot of difficulties on dwellers: ranging from household level to business organizations. Citizens and both governmental institutions and the private sector have been constantly complaining that the frequent power outage is disrupting their day to day businesses.
In fact, with the construction of Gilgel Gibe III Dam, which has the capacity to generate up to 1870 Megawatt (MW), the country has managed to more than doubling its installed power capacity. There are also several ongoing projects, including the Grand Ethiopian Renaissance Dam, which would significantly improve the nation's installed power capacity. Despite the significant improvement in power production, especially in hydro-power, the power outage is still here.
While the majority of power outages last only a few hours, some can last days or even weeks, completely shutting down productions, businesses and even service delivery at hospitals. And various researches shows that the financial impacts of even a small power cut can be catastrophic.
Power is the most important ingredient both in terms of industrialization and in keeping established industries well functioning. When there is an outage, its repercussions are costly and deeply felt by almost every sector of the economy. So, in a world where virtually everything is dependent on electricity, maintaining an uninterrupted flow of electric power is essential. This is generally speaking.
Specifically speaking, electric outage forces many companies into unintended cost, which they have to offset through some other means. It can hamper a country's ability to attract investment, and hurt its economy comparative advantage. As power outage also means a disruptive and unstable flow of electric power, it can damage equipment, both electrical and non electrical. It can hamper the day to day activities of the public.
Further, the issue of power outage is not simply the issue of power interruption. It is also the issue of image and trust building. For the country that is labeled as one of the fastest economy in the world, power outage has an adverse effect on its investment activities. This is an era where every human activity is associated with the usage of electricity. Every second has value for every investor. Every electric outage has cost for every factory.
There was a study recently done which showed how electricity changes the way people live, making it not just an economic tool, but a way of life. Thus, by this rationale, power outage can bring serious socio-economic cost to a nation.
The impact of the power outage is not limited to the economy alone, though. It also has serious social ramifications and compounding the hardship families are facing in fulfilling the needs of their children.
Ethiopian Electric Utility believes the main reason for intermittent power outages is old electric power distribution lines. That is why it is undertaking a rehabilitation project in the capital and eight major urban centers which will be fully finalized this Ethiopian budget year. The project aims to make improvements on the duration of power outages and minimize the frequency of the interruptions.
EEU is also going to rehabilitate and upgrade electric power distribution lines in six regional towns and many more are coming in the near future once feasibility studies are finalized. Hence, maximum efforts need to be exerted to finalize the projects on time and resolve the age long problems of citizens and businesses so that the economy maintains its tremendous progress.