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Journal of Energy
Volume 2016, Article ID 5837154, 8 pages
http://dx.doi.org/10.1155/2016/5837154
Research Article

The Economics of Renewable Energy Sources into Electricity Generation in Tanzania

1Mechanical Engineering Department, Arusha Technical College (ATC), P.O. Box 296, Arusha, Tanzania
2College of Engineering and Technology (CoET), University of Dar es Salaam (UDSM), P.O. Box 35131, Dar es Salaam, Tanzania
3Nelson Mandela African Institution of Science and Technology (NM-AIST), P.O. Box 447, Arusha, Tanzania

Received 28 April 2016; Accepted 20 June 2016

Academic Editor: Soteris Kalogirou

Copyright © 2016 Baraka Kichonge et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

The study analyzes the economics of renewable energy sources into electricity generation in Tanzania. Business as usual (BAU) scenario and renewable energy (RE) scenario which enforce a mandatory penetration of renewable energy sources shares into electricity generations were analyzed. The results show total investment cost for the BAU scenario is much lower as compared to RE scenario while operating and maintenance variable costs are higher in BAU scenario. Primary energy supply in BAU scenario is higher tied with less investment costs as compared to RE scenario. Furthermore, the share of renewable energy sources in BAU scenario is insignificant as compared to RE scenario due to mandatory penetration policy imposed. Analysis concludes that there are much higher investments costs in RE scenario accompanied with less operating and variable costs and lower primary energy supply. Sensitivity analysis carried out suggests that regardless of changes in investments cost of coal and CCGT power plants, the penetration of renewable energy technologies was still insignificant. Notwithstanding the weaknesses of renewable energy technologies in terms of the associated higher investments costs, an interesting result is that it is possible to meet future electricity demand based on domestic resources including renewables.