energy profile for afghanistan (2006)

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Country Profile of Conventional and Renewable Energies:

Islamic Republic of Afghanistan

Last updated on 29/09/06

Prepared by

Maria-Evangelia Kaninia Intern from August to …, 2006

For the

Department of Economic and Social Affairs

Statistics Division Energy Statistics Section

United Nations, New York

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1 Executive summary Afghanistan scores among the last in every development index rating. With a population

of approximately 30 million (rough estimate), the energy sector is hardly able to cover the growing demand (which is currently very low). A particularity about the country is the dearth of exact data. The government and the various development agencies that are active in the country have commissioned various reports within the context of rebuilding the entire economy, but even recent ones are often contradicting each other.

Currently a large percentage of the population relies on non-commercialized resources (especially wood fuel, estimated to cover more than 75% of the final energy needs) to cover their energy needs. Inland production of coal and hydrocarbons has severely declined since its peak in the eighties. However there are prospects to develop these resources and especially the gas fields. The supply of petroleum products through importations does not suffice to cover the demand and is largely unregulated.

The electricity sector depends largely on the abundant hydro resources. The actual capacity has severely declined and will need (as is scheduled) to be fortified with new hydro and thermal plants. There are numerous options for the construction of further hydro plants. The thermal ones will be fueled with gas and will therefore be located between the gas fields and the major urban load centers.

Since an expansion of the electrical grid to cover the entire country is out of the question for the medium term (because of the terrain of the country and the distribution of load centers), small-scale renewable energy projects will be developed to power isolated communities.

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2 Introduction and Overview

2.1 Brief Country Facts

2.1.1 Geographical data

Figure 1 Map of Afghanistan, [CIA]

- Location: Southern Central Asia, north and west of Pakistan, east of Iran - Surface area: 647,500 sq km (according to [CIA]), 652,100 sq km (according to [EIU]) - Terrain / topography: land-locked; mostly mountainous; plains in north and southwest - Climate: large parts of the country are dry; limited fresh water supply; continental climate,

hot summers and cold winters

2.1.2 Population - Total population: 31,1m in July 2006 according to [CIA]; 28,5m in July 2004 according to

the State Department ([STA]); 23,8m according to [EIU], which quotes the (Asian Development Bank, Basic Statistics 2006)1; the [UNCDB] figure agrees with the latter, as well as the [IMF]; the Central Statistics Office of the country, relying on a 2002 census gives an estimate of 21,8m for 2002 ([CSO1])

- Growth rate: 2,7%

2.1.3 Political situation ([CIA], [STA], [EIU]) Afghanistan was unified as a country in the 18th century. During the 19th century, which

was marred by the two Anglo-Afghan wars, Afghanistan served as a buffer between the British and Russian empires. Through these wars were demarcated the present-day borders and was

1 Wikipedia mentions that no systematic census has been held in the country in decades.

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established a British domination over the country’s foreign affairs; independence was won from notional British control in 1919.

The most peaceful period in Afghanistan’s history lasted until 1973, to be followed by a military coup. Trying to exploit the mounting disaffection of the population for the regime that was established with the 1973 coup the People’s Democratic Party seeked Moscow’s support and initiated a second coup in 1978. The Marxist-style regime and its reform program met with strong resistance from the Afghan people, since it clashed with their traditions and religious identity. Conservative rural tribesmen, backed by Pakistan and the US, each for different reasons, rebelled.

Despite ruthless repression, the Soviet Union could not defeat the mujahideen, but disunity among the various groups prevented the successful formation of an alternative government-in-waiting. The Soviet contingents, after having suffered severe losses, were led out in 1989, while the communist regime collapsed in 1992.

In the game of power between clans and factions that ensued rose the Taliban (hard-line Islamists), which had arisen to power in the mid nineties. Many Taliban had been educated in religious institutions in Pakistan and were largely from rural southern Pashtun backgrounds. In 1994, the Taliban developed enough strength to progressively capture large parts of the country, occupying about 90% of the country by the end of 1998 and imposing a theocratic regime.

Following accusations of providing refuge to terrorist groups, a military campaign was launched in 2001 by the US and their allies against the Taliban, whose fall was a matter of months.

After an interim period, the first presidential elections were held in 2004, followed by elections for the National Assembly in 2005. Despite this progress, the country is far from having achieved the kind of stability that would attract foreign investors or allow for a rehabilitation of its infrastructure.

2.1.4 Economical situation ([EIU])2 Afghanistan is one of the poorest countries of the world as a result of its tumultuous

history and the fact that it had never developed extended infrastructure but remained relied on traditional agriculture. The foreign aid trickling into the country is not yet sufficient to reverse the situation, all the more because the situation is still hazardous.

The main challenge in agriculture, which constitutes the primary sector of the economy, occupying 80% of the population, is the restriction of poppy cultivation, which currently is estimated to account for 80% of the world production. The laundering of drug money, for example through trade in vehicles, distorts other sectors of the nascent economy.

Growth has been high since the fall of the Taliban regime, albeit from a low base and is projected to increase remain at a rate of above 10% per year for the next years.

2.1.4.1 Vital statistics (see 2) - GDP (PPP): $21,5b ([CIA] estimation for 2004); of which the foreign aid accounts for a

large percentage; the estimate of the [IMF] for the same year is $27,4b; another IMF estimate (see [IMFa], section ‘Selected Economic Indicators’) excludes opium-related activities from the $5,9 figure it provides for 2004/05 (PPP not taken into consideration)

- GDP growth rate: 8% for 2004, 14% for 2005 (estimation provided by the [IMF]) - GDP (PPP) per capita: $800 ([CIA] estimation for 2004); $1158 ([IMF]) - Inflation rate (consumer prices): 16,3% ([CIA] estimation for 2005) - Main exports: opium, agricultural and artisanal products, gems, mainly to US (26%),

Pakistan (21.5%), India (19%) ([CIA] estimation for 2005)

2 [EIU] stresses the dearth of statistical data and of a standard procedure to record

economic activity. It particularly mentions that official statistics are non-existent since the fall of the communist regime in 1992.

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- Main imports: the country is not self-sufficient in any sector apart from agricultural products and has therefore to import everything else, mainly from Pakistan (23.7%), US (11.7%), India (7.9%), Germany (6.8%), Turkmenistan, Russia, Kenya, Turkey ([CIA] estimation for 2005)

2.2 Overview of the Energy Sector3 Currently, Afghanistan is trying to reconstruct its energy infrastructure, albeit starting from

a low base. It is estimated that approximately 85% ([EIA]) of the energy needs are covered through the use of traditional, non-commercial fuels such as wood (75%) or animal dung. There are resources of hydrocarbons (particularly natural gas), coal and hydropower. Currently the country has to import all petroleum products it needs, which account for 50% of the commercial energy, as well as electricity with which it supplements the inland production.

2.2.1 Sector Organisation [ADBa] explains the structure of the energy sector administration. However, this

information dates from 2003 and it refers to the transitional government that was then in place. According to this source:

Institutional responsibility for the energy sector is spread over several entities, largely owned and operated through centralized ministries, with some operational functions delegated to government enterprises. The ministries with specific responsibilities are the Ministry of Water and Power (MOWP; electricity supply), Ministry of Mines and Industries (MMI; oil exploration, gas, coal, and mining), and Ministry of Commerce (oil imports and distribution). The Government acts as owner, regulator, and policy maker.

Reforms: In December 2004, the newly elected Government created the Ministry of Energy and Water (MEW) by merging the responsibilities of the Ministry of Water and Power and some responsibilities of the Ministry of Mines and Industry. MEW is responsible for power, gas, petroleum, and water resources. In the power sector, MEW controls the operation of several state-owned enterprises, among which the Afghanistan Electricity Authority (DABM), responsible for power generation, transmission, and distribution and several “satellite” units or agencies (responsible for construction or consultancy and closely related to the DABM).

[AISA] (presentation prepared within a state agency in 2006 and therefore expected to be accurate), mentions that the management of state energy resources –with the exception of hydro resources- is shared between the following agencies, without specifying the capacities of each: o Afghan Gas Enterprise o Northern Coal Department o Afghanistan Geological Survey o Oil and Gas Exploration Unit

The clarification of the jurisdiction of the various related ministries and state agencies is among the priorities of the government. In this context, the regulatory functions have to be separated from the operative ones, “consistently to international best practice” ([RA04], page 68). Private sector participation will be encouraged through the development of appropriate legal and regulatory framework.

Within the context of an inclusive programme towards reviving the entire economy (“Securing Afghanistan’s future”, described in the Afghan government portal http://www.af/recosting/index.html), a series of studies concerning the energy sector in particular has been developed. [R04] (drawn from this source) details a series of modest investments in the energy sector that the government is progressively bound to undertake (the horizon of the report is until 2015). The investments pertain to the rehabilitation of existing infrastructure and equipment, exploration and development of hydrocarbon fields, and construction of pipelines and

3 The most important source of information concerning the energy sector in Afghanistan

is the EIA. It provides a country brief ([EIA]) and detailed time series of data ([EIAa]).

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storage facilities to make the domestically produced as well as the imported commodities accessible to the population.

2.2.2 Production, trade and consumption of commercial energy The following table is a compilation of the figures quoted from various sources.

2004 (ktoe) coal crude

oil oil

products gas hydro combustible renewable and wastes electricity indigenous production 147.04 0.15 0.0 200.06 195.07 234.08 0.0 imports 0.0 0.0 224.09 na 0.0 0.0 8.910 exports 0.0 0.0 0.0 0.0 0.0 0.0 0.0

TPES 147.0 0.1 224.0 200.0 195.0 234.0 8.9

electricity plants na 0.0 na -20.0 -195.0 0.0 65.011 TFC 147.0 0.1 224.0 200.0 0.0 234.0 73.912 Industry na na na 133.3 0.0 na na Transport 0.0 na na 0.0 0.0 0.0 0.0 Other na na na 46.7 0.0 na na Non-energy use 0.0 na na 0.0 0.0 0.0 0.0

Table 1 Energy Balance Table, draft

2.2.2.1 Solids / Coal [ADBa] mentions that “the coal reserves are estimated to be 125 million tons, with nine

proven deposits, of which four mines have been harnessed for production”. [AISA], available from an Afghan state agency, estimate the coal reserves at 130 million tons (2006). On the other hand, [EIAa] indicates a figure of only 73 million tons in the 2004 International Energy Annual. Either way the amount is not significant in international scale. The deposits are located between Herat and Badashkan in the northern part of the country (see Figure 3). [PRIa] also estimates the reserves at 73 million tons, but it mentions in addition the discovery of additional13 coal mines/deposits.

The government controls coal production through a state agency, North Coal Enterprise (NCE). This agency is being forwarded for privatisation, with the support of USAID. The respective information page provides listings of the existing mines and their condition (see [PRIa]). According to this source the output in 2004 reached 32,000 tons (the coal mining industry peaked in 1987 at 165,000 tons, more than five times the current production, and declined afterwards). However, not all coal deposits are controlled by the government. [USGS] estimates the total14 current production is 220,000 tons (report published in 2005), which would mean that

4 [USGS] 5 [R04] 6 [R04] 7 assuming 1:3 efficiency (thermal equivalent) 8 according to [WRI]; includes only wood fuel 9 [EIAa]; 960ktoe according to [R04] 10 [ADBc] 11 [EIAa] 12 The actual consumption should be 30% lower in order to adjust for system losses. 13 According to [USGS], the U.S. Geological Survey is conducting a cooperative coal

resource assessment of Afghanistan with the Afghan Ministry of Mines and Industries (MMI). It characterizes the resources as potentially “abundant”.

14 [USGS] clarifies the distinction between the mines that are controlled by the government, through the North Coal Enterprise and “small private artisanal mines, often without government sanction”.

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only 15% of the total production originates in government mines, operated by the NCE or associated agencies.

Consumption: 34% (11,000 tons) (according to [PRIa]) of the total government-controlled production in 2004 was consumed by a state-owned industrial customer (cement industry). The rest of the production is used domestically, either for residential use (both raw and briquette forms) or other state-owned enterprises. [USGS] mentions that it has also occasionally been used for electricity production in plants that under normal circumstances burn natural gas.

Figure 2 Coal production timeline (source: [EIA])15

15 The data provided by the EIA collides with [PRIa], since the latter reports exact figures

about a substantial production in 2004. EIA is however the only source that provides time series of data, showing the decline in output in every energy sector after 2002.

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Figure 3 Locations of coal resources, retrieved from [USGS]

2.2.2.2 Oil16 Much of the crude oil and natural gas resource potential, and all of the known reserves

are in northern Afghanistan, located in parts of two major petroliferous geologic provinces, the Amu Darya Basin in the western part and the Afghan-Tajik Basin in the eastern part. The area of the two basins combined encompasses approximately 515,000 square kilometers (200,000 square miles), which means that the exploration undertaken mainly by the USGS will be a long project.

[EIA] quotes Soviet estimates from the late 1970s that placed Afghanistan's proven and probable oil and condensate reserves at 95 million barrels (which amounts to less than 10-5 of the global reserves) of medium quality (102 million barrels according to [AISA]). Oil production has always been secondary in importance in comparison to natural gas. Minimal quantities (less than 300bbl/d) were produced by local militia in the early nineties. The USGS estimate the resources at 87 million barrels, while the summary table of the oil fields presented in [RE04], page 7, at 94 million bbl.

The size and quality of the deposits, however, make it questionable whether it is feasible to establish an oil refinery and use the residual heavy oil for power production ([RE04]).

According to [R04], the current production of oil is a mere 400bbl/d, less than 10% of the quantity that was consumed in 2004 according to [EIAa].

Petroleum products are imported, mainly from Pakistan and Uzbekistan, with limited volumes from Turkmenistan and Iran serving regional markets close to the respective borders.

16 The two major petroliferous geologic provinces are the Amu Darya Basin in the

western part and the Afghan-Tajik Basin in the eastern part. The current exploration underway, which takes place with the collaboration of the US geological institute focuses on these areas.

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Turkmenistan also has a petroleum product storage and distribution facility near the Afghan border, which supplies northwestern Afghanistan. However, there are restrictions in the supply system, which is unregulated. This results in the imported oil products being of poor quality.

[EIAa] provides a timeline for domestic oil products consumption (for 2004 it amounted to 4,500 bbl/d or 224,000t for the entire year). [CIA] gives an estimate of 5,000bbl/d for 2003. In comparison, a quantity of approximately 6400bbl/d is delivered to the US military contingents in Afghanistan alone (see [DLA], page 6). [R04] (page 20) reports a yearly consumption for 2004 at 960,000t or 19,000bbl/d (more than the quadruple of the [EIAa] estimate)17.

Fuel & Liquid Gas Enterprise (see [PRIb]) (state-owned) operates fuel storage facilities and over 200 petrol stations around the country. It is not clear whether it controls the monopoly. However, [R04] reports that “local private sector entrepreneurs supply petroleum products with minimum government control, monitoring or management”.

oil consumption (source: [EIA])

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Figure 4 Oil consumption timeline, source: [EIAa]

2.2.2.3 Gas Natural gas is the most important hydrocarbon resource in Afghanistan. The total

reserves are estimated at 1,750Tcf by Oil and Gas and at 3,500Tcf by Cedigaz as of January 2006 (both sources are quoted in [EIAa]). The Afghan state agency for Investment Support (see [AISA] places the estimate at 4,2Tcf (2006). The [EIA] report mentions that the northern part of the country alone (North Afghan Platform; southern extension of the rich Amu-Darya Basin) has 5Tcf of reserves (including probable reserves).

Gas fields were first developed by the Soviets in the area surrounding Sheberghan in northern Afghanistan, close to the border with Turkmenistan. The largest (about 2Tcf) gas field of Afghanistan, the Khodzha-Gugerdag field, was discovered in 1961 (see [USGSa], page 14). Other areas of the country have not been extensively explored, but are believed to be limited.

A summary of the gas fields is presented in Table 2, according to which the proved reserves are about 2Tcf. Further exploration for hydrocarbons will be progressively undertaken, mainly with the support of US agencies.

17 According to the questionnaire submitted to the UNSTATS ([Q]), the consumption

(equal to the imports) of oil products amounted to 190,000t in 2004, or 3,800bbl/d, which is rather off-mark.

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Table 2 Gas fields, summary, from [RE04] [EIAa] provides a timeline for natural gas production since 1980 (see Figure 6). According

to the report published at [EIA] the peak of gas production was reached in 1978 at 140bcf. The steep decline after the soviet pullout the subsequent Afghan civil war is due to technical problems which led to wells being shut and the lack of an export market in the former Soviet Union which absorbed till then the largest part of the production. According to [R04], current (2004) production is at 7,7bcf, which is less than 10% of the capability of the fields. [Q] provides a 4,4bcf estimate of the yearly production. In any case, it is much lower than the peak achieved in the eighties. This is due to “lack of infrastructure facilities for production and transportation of natural gas”, according to [R04].

The projects to refurbish the existing gas system are closely related to the uses the gas will be put to. For example, [RE04] mentions that the Asian Development Bank has approved a loan on $26m for the refurbishment of the existing the gas system near the city of Sheberghan. The project was to be finalized by mid 2006 so as to ensure the supply of 7bcf per year to a thermal plant built close to the field (see 2.2.2.4).

Since Afghanistan is located on the route from Central Asian and Iranian supply centers to Indian and Pakistani markets (see map available at [MD]), several pipeline projects have been discussed. However, their implementation is dependent upon the security situation in the country. Centgas (detailed in [EIAb]) is one of these projects, consisting of a pipeline linking Daulatabad (Turkmenistan) via Herat (Afghanistan) to Multan (Pakistan) with a throughput of 700 Bcf/year at a cost of $2b. A memorandum of understanding had been signed by Turkmenistan, Pakistan, Afghanistan, and Uzbekistan in 1997. The project was revived in 2003 (see [ADBb]) without any significant progress so far.

There are international gas pipelines linking Uzbekistan to Bagram and Turkmenistan to Shindand, but it is unclear whether they are operational or who controls them. However [EIAa] data suggest that no gas is currently imported.

Consumption: According to [EIA], the entire quantity of gas that is currently produced is domestically consumed. Gas is piped to Mazar-i-Sharif through the only (as of June 2004) operating pipeline or to industries located around the production sites. About 50% of the quantity produced is consumed at the fertilizer plant, which also includes a 48MW electricity generation plant (of which 16MW are intended for own use; see footnote 20). The rest is consumed locally for various uses (see Figure 5; the data from this report does not take into account the losses which are bound to incur; it is mentioned that there are severe leakages which reach –together with theft- even 30%). The consumption for residential use, 23% of the total, corresponds to an estimated 7,8% of the households of the country.

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gas consumption (bcf, 2004) (source: [R04])

pow er generation, 0.77, 10%

residential, 1.79, 23%

Other, 5.11, 67%

other industrial, 1.28, 17%

plant fertiliser, 3.83, 50%

Figure 5 Gas consumption, source:[R04] As a whole, domestic utilization of gas is low because of lack of infrastructure to transport

it from the production sites to the demand centers. Thus it is restricted to the areas in the north close to the production sites. The construction of a gas pipeline from Sheberghan to Kabul by the public sector ($300 million estimated cost) is a priority for the government (see [R04]). The government has set ambitious targets for the connection of households to the gas network (23% by 2010 and 42% by 2015, as reported in [R04]).

Sector organisation: [PRIc] (a government agency itself) mentions that “…natural gas reserves are controlled by the state-owned Afghan Gas Enterprise…” [AISA] mentions that the “commercialization” of the enterprise will begin in 2007 with the support of the Asian Development Bank. No further information concerning this enterprise has been found.

gas data ([EIAa])

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gas production (bcf) gas consumption (bcf) gas production, [R04]

Figure 6 Gas data, source: [EIAa]

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2.2.2.4 Electricity18 Supposing that the data provided by [EIAa] are reasonably accurate (see Figure 7),

Afghan citizens consume approximately 30kWh per capita per year19, which is extremely low even adjusting for the percentage of those who actually do have access to electricity. However, electricity consumption, especially by residential consumers, cannot be precisely calculated because of electricity theft (illegal connections to the network) and the dilapidated state of the distribution network that result in significant losses. ([RP04] reports that only 55% of the energy generated is billed, leading to a very low cost recovery percentage). The current supply does not meet the demand, a situation which is dealt with through frequent load shedding.

Electricity is imported from neighbouring countries to satisfy local demand at bordering areas, although the bilateral annual power purchase agreements are described in [RE04] as being slightly unreliable. [ADBc] provides some figures concerning imports of electricity for 2004 (Table 3). The sum total of the imported quantities is, however, more than 20 times the quantity reported by [EIAa]. source country destination province electricity imported in 2004 (GWh)Uzbekistan Balkh, Hairatan 76 Turkmenistan Herat 18,5 Tajikistan Kunduz and other northern provinces 12,3 Total 106,8

Table 3 Imports of electricity ([ADBc])

electricity generation and consumption ([EIAa])

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generation (b kWh)

electricity consumption (b kWh)"

Figure 7 Electricity generation and consumption ([EIAa])

Plant Capacity (installed)

Description

18 [RP04] contains a full enumeration by region of the electricity infrastructure of the

country as of 2003, including listings of power plants, transmission and major distribution stations, as well as information on the grid.

19[RA04] places the estimate for yearly per capita consumption at an even lower 12kWh.

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Kajaki Dam 2x16,5MW Located in Helmand province near Kandahar; transmission lines to Kandahar repaired in early 2002, after being damaged by air strikes in November 2001. Upgrading and expansion program is underway. [R04] reports that it is “in critical condition””

Mahipar Dam 66MW near Kabul; operational only two to three months per year; severely affected by water shortages

Naghlu Dam 100MW Operational. Provides most of the electricity used in Kabul.

Darunta Dam 11MW Operational. In Nangarhar province near Jalalabad. Sarobi Dam 22MW Supplies Kabul

Dahla Dam na Kandahar province. Operational. Kabul Thermal Plant 45MW Gas fired-plant close to Kabul; recently refurbished by

ABB Mazar-i-Sharif Power Plant20

30MW Small natural gas-fired power plant near Mazar-i-Sharif, partially operational at less than 30 MW. According to [R04], page 12, not more than 5-10MW are actually available for exportation to the grid.

Table 4 Major electricity generation plants21, source: [EIA] According to Table 4, Kabul is supplied from three hydroelectric power dams: the 100MW

Naghlu dam (the only source of power that is reliable all year long), the 66MW Mahipar dam, and the 22MW Sarobi dam, with the latter two facilities slated to be rehabilitated, possibly by 2005, under a $16.9 million contract let to Voith Siemens in early 2004 ([EIA])22. The dams are located about 50 miles from Kabul and are linked by 110kV transmission lines. (Apart from technical problems, the area surrounding the lines is also mine-affected). Prior to the early 1990s, Kabul also had two gas-fired power plants located on the outskirts of the city. ABB recently refurbished one of the plants, which has a 45-MW capacity. It is anticipated to be used to meet peaking demand for the foreseeable future. The other plant, with a 44-MW capacity, was partly destroyed in the early 1990s.

Data from [EIAa] indicate a share of about 80% for hydropower capacity and 20% for thermal capacity, out of a total of approximately 320MW. However, there is an uncertainty as to which plants are actually operating at which capacity. Characteristically, [ADBc] mentions that the three hydro plants (see Table 4) supplying Kabul have a total nominal capacity of 188MW, but their actual combined output is 80MW.

The series of data provided by the questionnaire [Q] contradict the other sources of information (including the government ones published in Annex 6, [RP04]), as becomes clear through the following graph:

20 The plant is actually part of the North Fertilizer and Power Enterprise, an industrial unit

producing urea from natural gas. When excess electricity is available, it is exported to the network surrounding Mazar-i-Sharif.

21 Other minor plants are omitted (but listed in detail in [RP04], annex 3). 22 The plants were constructed by the same company in 1956 and 1966, respectively.

Their combined output after the rehabilitation will be 77MW (see link).

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Total electricity generation capacity, by source of information (MW)

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[EIAa] [Q] (questionnaire)

Figure 8 Contradicting data regarding electricity generation capacity [Q] reports a total capacity of 577MW (80% more than the 323MW capacity reported by

the [EIAa]), of which about 4% would be thermal and the rest hydro23, and of which 35% would belong to auto-producers, with the rest belonging to the public utility. [RP04]’s estimate (page 45) of an actual capacity at 240MW is in all probability closest to the real situation.

electricity generation capacity (MW)

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Figure 9 Electricity generation capacity by type (source: [EIAa])

23 Obviously the government agency reported the total nominal capacity of the existing

plants, regardless of their condition.

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electricity generation by type ([EIA])

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Figure 10 Electricity generation by type ([EIAa]) Regardless of the exact figures for active capacity, Afghanistan will need to multiply its

generation capacity by at least five or six times to reach other developing countries standards. Sector organisation: “Da Afghanistan Brishna Moassesa” (DABM) is the state-owned

power utility responsible for generation, transmission, and distribution of electricity, created in 1966. In 1986, the Government enacted the "Afghanistan's Usage of Electricity Act", making the Ministry of Water and Power (MWP) responsible for the Power sector in Afghanistan (source: [RE04]). Since the reform in December 2004, the DABM manages about 80% of the country’s electricity production, while the ministries of mines and industry and of light industry share management of the remaining 20%.

Ministry of Water & Power has grouped the projects to restore the electricity sector in “Power Sector Master Plan”, described in detail in [MWP04]. These projects include generation, transmission and distribution, but no small-scale distributed projects.

Some available data on the current prices are indicative of the malfunctioning of the public electricity utility: Electricity that is imported is priced at $0,05-,09, depending on the importer. The electricity that is produced within the country, mainly at hydro plants supplying the major cities is significantly cheaper, at $0,02. This price does not reflect the cost of production that the state has to bear. The electricity tariffs as of January 2004 are available in Annex 5, [RP04]. Concerning the issue of tariffs, the government aims at creating a regulatory entity (page 47 in [RP04]). However, this should be ranked lower, in terms of priority, since even developed economies need decades to introduce regulatory bodies for electricity and stabilize the respective markets.

Projects: The entire sector of electricity requires extensive investment, including: construction of new generating plants (exploiting the inland resources, namely hydropower and natural gas) and rehabilitation of existing ones; import of electricity from Uzbekistan and Iran to supplement the domestic capacity; extension of the grid for outreach to a greater percentage of the population; small-scale generation for isolated communities. The total budget dedicated to the sector amounts to $2,8b for a horizon until 2010.

As is extensively described in [RE04], alternative strategic options are under consideration. The government has isolated three main strategies (import-based, thermal-based and hydro-based) and leads an effort to produce a mixed solution to the electricity supply problem. This major source of information includes lists of recommended projects, of which the major thermal ones are described as follows, while the hydro ones are described in the RE section ( 3.1.1.3):

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o According to [RE04], the refurbishment of the gas fields (see also 2.2.2.3) will provide in the immediate future fuel for a 2x50MW combined cycle plant which is to be built close to the gas field near the city of Sheberghan. The fuel required yearly will be 7bcf, meaning that the generators shall operate at an efficiency of about 40%. The plant would be located between the city of Sheberghan and the 110 kV substation connecting Sheberghan with the Turkmenistan grid, which will be connected to the network supplying Kabul from Uzbekistan ([RV04]).

o The North West Thermal Power Plant (see [RV04]), in the outskirts of Kabul, was constructed 1984 and initially planned to be a combined cycle plant consisting of 2 gas turbines and one steam turbine with a total output of about 70 MW. The construction works was stopped in mid 1984 due to war activities and today only the two gas turbines are functional and use for peaking in the cold seasons. The plant can operate on multiple fuels and will be refurbished to give an additional output if 28,6MW to reach its initial nominal capacity.

o Major hydro-projects: See 3.1.1.3. Key donors: Most of the projects vital to the power sector are financed by the Asian

Development Bank (ADB), the International Development Association/World Bank (IDA/WB), Germany (through state agencies), and the US (through USAID). In addition, Iran has financed transmission lines to interconnect the city of Herat, and India is financing the detailed design and construction for the missing transmission link between Pul-e-Khumri and Kabul.

Each of these organisations imposes its own bureaucracy, which means that a large capital of the available funds is depleted at the stage of preliminary feasibility studies. However, the government is not in a position to support priority energy-related projects without external help.

2.2.2.4.1 Household / commercial access to electricity The percentage of population with access to electricity is remarkably low: estimated by

the World Resources Institute ([WRI]) at 2% as of 2000. The same estimate is provided by the Afghan authorities ([CSO2]). [EIA] mentions only that “less than 10%” have access to electricity, while the capital and other areas interconnected to the grid suffer of shortages. [RA04] lists the following percentages for 2003 and the respective target marks until 2015:

% 2003 2010 2015 access to national grid, countrywide 6 24 33 urban access 27 77 89

Table 5 Access to electricity, government source ([RA04]) It should be mentioned that the [RA04] report mentions specifically access to the national

grid. It is reasonable to expect that the actual percentage is slightly higher (for example, privately operated oil-fueled small-scaled generators might be in operation, undocumented). Access is virtually limited to urban areas: 30% of the 234,000 connections are in Kabul. Other provinces have less access, and rural areas are not served.

The basic axis of electricity transmission is the Northern Transmission Link which serves the capital and the major northern cities. The isolated distribution (low voltage) systems are stretched beyond their technical and economic lives because of inadequate maintenance and overloading. A map of the existing grid can be found in [MWP04], page 19, along with recommended extensions.

The ADB is promoting a project to construct or rehabilitate 206 kilometers of transmission network, and rehabilitate the associated substations and distribution systems in 11 rural towns and adjacent rural areas in the northern, eastern, and southern provinces. This project (see [ADBc]) will allow an estimated 90,000 consumers-connections to connect to the grid. A map of the considered links can be found in [ADBc]. Other similar projects are being promoted by various donor agencies, including the Hairatan to Pul-e-Khumri (funding by ADB) and Pul-e-Khumri to Kabul (funding under consideration by the US Agency for International Development ([USAID)

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and the Government of India)24. These lines are included in the list of “major recommendations” endorsed by the Power Sector Master Plan described in [R04].

Because of the mountainous terrain of the country, construction of an extended grid is not a viable option. Rural electrification is only thought achievable through small-scale projects (with emphasis on renewable electricity).

24 In parallel, international agents are trying to ensure a 150MW contract to supply Kabul

through the axis that is to be built (the current peak demand for the capital is at 140MW, according to [ADBc], excluding the load that is shed during peak load) from Uzbekistan.

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2.3 Overview of Renewable Energy

2.3.1 Overview of available RE resources The primary resource is hydropower, which has already been used for electricity

generation and will be further exploited. Options for the effective utilization of both solar and wind power in isolated rural areas

may also be profitable over the medium term.

2.3.2 Legislative and institutional structure The reform after the election of the new government in 2004 led to the creation of the

“New and Renewable Energy Research and Development Centre”, responsible for the development of renewable energy, under the Ministry of Energy and Water.

The environmental legal system in Afghanistan is still in its infancy. No overall environmental law is yet in place.

2.3.3 RE targets and commitments

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3 Analysis of Renewable Energy Sector

3.1 Analysis of Different Types of Renewable Energy

3.1.1 Hydro

3.1.1.1 Resource potential Afghanistan is well-endowed with hydropower; [RA04] quotes estimates that place

hydropower potential at 25,000MW. The Amu/Panj river alone, which constitutes part of the border between Afghanistan and Tajikistan, is estimated at 20,000 MW in installed capacity.

3.1.1.2 Achievements Hydro resources dominate the electricity sector. According to [RP04] (Annex 6), 60% of

the installed capacity (regardless of operating condition) comes from hydro plants, as well as 72% (according to [EIAa]) of the generated electricity. The major hydro plants are listed in Table 4. A map with their locations, along with detailed listing of the existing plants can be found in [MWP04].

3.1.1.3 Current projects / dynamics of development The underway power programme of development (described In [RA04]) places emphasis

on the power sector. Approximately half of the $2,8b earmarked for the entire electricity sector (including transmission and distribution) is needed for development of power generation capacity, which, on its turn, will largely comprise of hydroelectric plants. The sites for the development of hydropower that are mentioned are Baghdara (280MW), Kajaki II (50MW) and possibly Sarobi II (180MW) (to which [RV04] adds Kunar (366MW or 165MW according to the site selected), Gulbahar, Olambagh, Kamal Khan, Khanabad (10,8MW), Kilagai, Upper Amu, Salma, Bakhshabad). Baghdara and Sarobi II are interdependent, since they would both utilize resources of the Kabul river. The figures concerning the capacity of each plant are found in [MWP04], where detailed tables concerning the environmental implications for each can also be found (page 140).

Micro-hydro projects are also viable options to supply isolated communities. ACTED, a developmental organisation, has installed small (in the range of 7 to 20 kW) generators in several villages of the Takhar province, supplying each connected family with approximately 60W (see [MHP1]). USAID also promotes micro-hydro projects ([MHP2]).

3.1.1.4 Major constraints The major constraints for the further development of the hydro potential of the country are

financial. Funds are provided by international donors and aid agencies, and although a plan has already been laid out, the funding is not sufficient. As to environmental and other constraints, impact studies are being conducted according to [RV04].

The Baghdara reservoir, which is being considered as a site for future development of a hydro plant will affect, when built, an estimated 10,000 inhabitants who will have to relocate ([RV04], E.7.2.1). Sarobi II will have far lesser impact (same source, E.7.2.2). The sites on Kunar have a consider resettlement parameter to be considered, as well as the Gulbahar site, which could accommodate 4x30MW generators. The Kajaki II site can be exploited to provide 2x16,5MW initially and up to 100MW subsequently, without considerable impact. The Olambagh site is bound to power a 3x30MW installation, affecting local communities and agriculture. For most of the above sites, development would require detailed studies, especially in the cases of international rivers.

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3.1.1.5 Summary Owing to its hydro resources, Afghanistan could potentially reverse the current situation

and become an electricity exporter. Various sites for major plants are under consideration, subject to the main problem of financing, which is mainly dependent on external donor and agencies. Micro-hydro plants are also an option for secluded off-grid communities.

3.1.2 Solar Afghanistan has considerable solar potential. Estimates ([ADBd]) indicate that solar

radiation in Afghanistan averages about 6,5kWh per square meter per day, and the skies are sunny for about 300 days a year.

The ADB has announced a Technical Assistantship (of a budget less than $1m) to develop solar power in remote communities of rural areas (see [ADBd]). An ADB specialist considers the potential for solar energy development “huge”, not only generating electricity but also for water pumping for water supply and small scale irrigation or provision of potable and hot water. Satisfying these needs through solar energy would also alleviate the pressure on forests, on which 80% of the population relies. This project would initially involve a pilot concerning photovoltaic installations for electricity generation.

3.1.3 Geothermal According to a recent (2004) report, Afghanistan has the potential to exploit geothermal

energy. The first stage would be direct non-electrical exploitation of heat for involve a wide variety of end uses, such as chemical industry, greenhouse industry, food processing, and fish farming, which is less capital-intensive. These uses are site-specific and could promote the development of impoverished communities (providing energy for such activities as agriculture or wool processing). At the same time they would substitute heat that now has to be produced through burning of wood fuel.

The map that is included in [GEO] (page 9) shows that geothermal resources are present especially in the central mountainous plateau where impoverished communities have little access to other forms of energy.

3.1.4 Biomass & Waste

3.1.4.1 Fuelwood Wood (mainly uncommercialised) has been used extensively as an energy source,

leading to a major deforestation issue. According to [CSO3], only 2% (down from 48%, which was the original, before human overexploitation, coverage) of the land area is covered by low-density forests.

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Wood fuel production (000 cubic m) (source: [WRI])

0

200

400

600

800

1000

1200

1400

1600

2004200220001998199619941992199019881986

Figure 11 Wood fuel production ([WRI])25 According to this source, the energy content of the wood fuel consumed in 2004 was

234ktoe.

3.1.4.1.1 Biomass other than wood Currently no data is available regarding commercialized biomass use, including

agricultural residues. The major agricultural commodity in Afghanistan is opium poppy. Energy crops could be

a substitute only if they were competitive, especially since the majority of the rural population depends on opium for a living.

3.2 Summary and Conclusion Afghanistan is already planning to further develop its hydro resources, both in order to

supply the on-grid system and in order to power (through micro projects) off-grid communities. Other types of RE (mainly solar and geothermal) are available for providing energy (not

necessarily through conversion to electricity) to isolated communities, since expanding the grid is virtually unfeasible at this stage.

3.2.1 Summary and assessment of major constraints The environmental and social concerns pertaining to major hydroelectrical projects are

being dealt with in the planning undertaken by the government. Potential Achievements Current

projects Incentives / Institutions

Major constraints

Overall feasibility

Hydro Y 60% of current

installed nominal

both major and micro-

scale projects

international donor funds

financial, resettlement

issues

Y

25 At 0.3215toe per ton of fuelwood (average caloric content assumption adopted by the

WRI), and an assumed density of 0.5ton/cubic meter the quantities reported by [WRI] are equivalent to 234ktoe for 2004.

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electricity capacity

under consideration

Solar Y N micro-projects for

isolated communities

international donor funds

financial Y

Wind na na na na na na Biomass Waste na na na na na na

Geothermal Y N na na na

4 References / Sources - [WRI] http://wri.org/, World Resources Information, Earthtrends, accessed on 25/09/06 - [GEO] Geothermal Energy in Afghanistan: Prospects and Potential, February 2004,

available online at www.cic.nyu.edu/archive/pdf/Geothermal.pdf - [AISA] Energy Resources Presentation by the Ministry of Mines and Industries, May

2006, available online at http://www.aisa.org.af/documents/MaryLouiseVitell.ppt - [WRI] World Resources Institute, Earthtrends, http://earthtrends.wri.org/, accessed on

03/10/06 - [Q] Questionnaire submitted to UNSTATS, 21/11/2005, period: 1999-2004 - [R04] Securing Afghanistan’s Future: Accomplishments and the Strategic Path Forward,

Oil and Gas Technical Annex, January 2004, accessed online on 28/09/06 at http://www.af/recosting/, link

- [MWP04] Power Sector Master Plan, Final Report, October 2004, Ministry of Water and Power, available at http://www.ands.gov.af/ands/, link

- [RA04] Securing Afghanistan’s Future: Accomplishments and the Strategic Path Forward, March 2004, accessed online on 29/09/06 at http://www.af/recosting/, link

- [RE04] Power Sector Master Plan AFG/03170, Appendix D, Thermal Resources, Thermal Power, Appendix E, Environmental and Social aspects, Ministry of Water & Power, Afghanistan, October 2004, accessed online on 29/09/06 at http://www.ands.gov.af/, link

- [RV04] Power Sector Master Plan, Appendix E, Environmental and Social Aspects, available online at http://www.ands.gov.af/, link

- [RP04] Power Sector Technical Annex, January 2004, accessed online on 02/10/06 at http://www.ands.gov.af/, link

- Central Statistics Office of Afghanistan, http://www.cso.gov.af/ o [CSO1] Population, 2002, /Census/Census/102Population.pdf o [CSO2] Energy use, Afghanistan Statistical Yearbook 2003,

/dataSets/documents/environment/203Environ.pdf o [CSO3] Deforestation and biodiversity, same as above, /202Environ.pdf

- [CIA] https://www.cia.gov/cia/publications/factbook/geos/af.html, CIA World Factbook, accessed on 25/08/06

- [EIU] http://www.eiu.com, Economist Intelligence Unit, Country Profile, updated on 10/08/06

- [UNCDB] http://unstats.un.org/unsd/cdb, UN Common Database - [DLA] Defense Logistics Agency, Fuel Line, Vol. 1, 2006,

http://www.desc.dla.mil/DCM/Files/Vol 1, 2006.pdf - [STA] http://www.state.gov/r/pa/ei/bgn/5380.htm, State Department, Background,

updated in May 2006, accessed on 25/09/06 - [MD] http://www.monde-diplomatique.fr/IMG/artoff9650.jpg, map, November 2002

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- [MHP1] ACTED Afghanistan Micro-Hydro Power, accessible online at http://www.acted.org/article/articleview/1495/1/23/

- [MHP2] USAID/OTI Afghanistan Hot Topics, April 2004, link - [USGS] Assessing the Coal Resources of Afghanistan, USGS and USAID, Fact Sheet

2005–3073, June 2005, available online at www.earthscape.org/r1/ES16746/USGS_Afghanistan.pdf

- [USGSa] USGS, “Petroleum Geology and Resources of the Amu-Darya Basin, Turkmenistan, Uzbekistan, Afghanistan, and Iran”, by Gregory F. Ulmishek, USGS Bulletin 2201–H, available online at http://pubs.usgs.gov/bul/2201/H/pdf/B2201H_508.pdf

- [PRI] State-owned enterprise information center, accessible at http://privatization.mof.gov.af/EN/, accessed on 26/09/06

o [PRIa] North Coal Enterprise, link o [PRIb] Fuel & Liquid Gas Enterprise, link o [PRIc] North Fertilizer and Power Enterprise, link

- [IMF] World Economic Outlook Database, September 2006 Edition, accessible online at http://www.imf.org/external/pubs/ft/weo/2006/02/data/index.htm

o [IMFa] press release relevant to a Poverty Reduction arrangement under the PRGF scheme, Press Release No. 06/144, June 26, 2006, accessible at http://www.imf.org/external/np/sec/pr/2006/pr06144.htm

- [EIA] Energy Information Administration, Afghanistan Fact Sheet , updated in June 2004, available online at http://www.eia.doe.gov/emeu/cabs/afghan.html

o [EIAa] http://www.eia.doe.gov/emeu/international/energy.html, data page, accessed on 26/09/06

o [EIAb] http://www.eia.doe.gov/emeu/cabs/caspgase.html, Caspian Sea Region report, July 2002

- ADB Asian Development Bank, http://www.adb.org/ o [ADBa] document TAR:AFG 36289, TECHNICAL ASSISTANCE TO

AFGHANISTAN FOR THE ENERGY SECTOR REVIEW AND GAS DEVELOPMENT, March 2003, available at /Documents/TARs/AFG/tar_afg_6289.pdf

o [ADBb] “Turkmenistan-Afghanistan-Pakistan Natural Gas Pipeline Project “, /Documents/Articles/AFG/afg_2003001.asp, June 2003

o [ADBc] RRP: AFG 37078, Power Transmission and Distribution Project proposal, March 2005, available at /Documents/RRPs/AFG/rrp-afg-37078.pdf

o [ADBd] “TA to Develop Solar Power in Remote Communities of Rural Afghanistan”, 18/01/05, link