Heavy fuel oil or solar? Costs and emissions in context

Where Xidig members may contribute

Learning openings, not confirmed contracts or tenders:

• Energy modelling: comparing the cost of each option for a specific town, using local fuel and tariff data.
• Environmental assessment: air quality and emissions reviews for any thermal plant.
• Explaining trade-offs: clear Somali-language material for public consultations.

Possible services, research, supplier or collaboration roles

• A town-level cost comparison of solar with storage against the current diesel supply.
• A plain-language brief on the ministry's 2025 generation plan.
• Research: tracking fuel import costs for power generation.

Who may find this useful

• Energy economists and engineers.
• Environmental specialists.
• Policymakers and journalists.
• Diaspora investors weighing energy projects.

Comparing the options

Scale.

• Installed capacity today: Somalia's climate plan (NDC 3.0, 2025) gives total installed capacity of 345 MW, of which 42 MW, or 12%, is renewable.
• The proposal's size: the four HFO plants, at 400 MW, would be larger than that total.

What the energy ministry plans.

• Priority: the Ministry of Energy and Water Resources' Generation and Transmission Plan (June 2025) says Somalia "should prioritize the large-scale deployment of renewable energy technologies—particularly solar PV and wind".
• Candidates: the plan's least-cost modelling (Chapter 4) included 10 MW and 20 MW HFO engine plants among its candidate technologies, alongside diesel, gas, coal, nuclear, solar and wind.
• Additions: in the reference scenario the model selects one 10 MW HFO unit, in South West, installed from 2030 to 2041 (Annex 3.1, Table A3-2). Its large thermal additions are gas turbines, mostly fuelled by liquefied natural gas, which the plan finds "the most cost-effective among thermal options".
• Oil-fired plants: the plan says they "should be reserved strictly for emergency or backup purposes, rather than for regular dispatch", because of their high emissions and cost.
• Long-term aim: in the plan's reference scenario, renewables (including hydro) reach "nearly 60%" of generation by 2050.
• Fit with the proposals: the government's list does not explain how its four proposed HFO plants (EN-03) fit with this plan.

Cost of power (levelised cost, over a plant's life).

• Solar worldwide: new utility solar averaged US$0.043 per kWh worldwide in 2024 (IRENA, 2025).
• Solar in Africa: a summary of IRENA's 2025 data puts Africa at US$0.052 per kWh, with installed costs of US$837 per kW.
• Solar with storage: in regions with strong sun, firm (round-the-clock) solar-plus-storage cost about US$0.054–0.082 per kWh in 2025 (IRENA, 2026, via Energy-Storage.News).
• HFO: Xidig found no authoritative cost figure for a large permanent HFO engine plant. The closest World Bank figure is for emergency rental units running on diesel or HFO, whose tariffs were typically US$0.30–0.40 per kWh in the study's reference years (mostly 2012–2014; published 2016); that is not the cost of a permanent plant. The fuel-only cost below is a floor.
• Somalia (2017 data): consumers paid US$0.25–1.30 per kWh, a weighted average of about US$0.61 (excluding Somaliland), for almost entirely diesel-generated power (World Bank).

Fuel price risk.

• Fuel use: Bergen's B33:45L data sheet (one of its current engines) gives about 46–47% efficiency on diesel oil. By Xidig's calculation that is about 180 grams of fuel per kWh; HFO, with a lower energy content, would need about 190 grams.
• Current prices: HFO (IFO 380) cost about US$708 per tonne at Fujairah on 28 September 2026. That makes the fuel alone at least US$0.13 per kWh, before shipping to Somalia (Xidig's arithmetic).
• The 2026 spike: in mid-March 2026 the average price of high-sulphur fuel oil across the top 20 bunkering hubs was US$794 per tonne, "close to double the pre-war average" (Lloyd's List, via Kuehne+Nagel).
• Who pays: changes in oil prices usually pass through to power costs, unless tariffs are fixed or subsidised.

Capital cost.

• The proposal: EN-03's printed cost works out to about US$1,125 per kW (Xidig's arithmetic).
• Comparisons: Kenya's 87 MW Thika HFO plant was estimated at US$153 million, about US$1,760 per kW (2016). A US government benchmark for engine plants was US$2,018 per kW (2021 dollars).
• Solar: in Africa it cost US$837 per kW installed in 2025.
• Caution: these figures are from different years and scopes, so they are rough comparisons. Per-kW figures are also not like-for-like: solar produces power only in daylight, so a kW of solar generates much less energy per year than a kW of engine capacity running around the clock.

Emissions.

Life-cycle emissions per kWh, median of published studies (IPCC).

• Annual total: running 400 MW for 8,000 hours a year would produce about 3.2 billion kWh. That means roughly 2–2.7 million tonnes of CO2-equivalent a year: the lower figure from the engine's efficiency, the higher from the IPCC median for oil-fired power, which includes less efficient plants (Xidig's arithmetic).
• Somalia's climate plan: separately, the NDC aims to cut energy-sector emissions by 3.24 million tonnes (50%) below business-as-usual, as part of its 2035 target, which is largely conditional on international support.
• Local air quality: HFO plants also emit sulphur dioxide and nitrogen oxides. International (IFC) guidelines set limits for them.

Regional experience.

• Djibouti: HFO and diesel supplied about 20% of its power but accounted for "about half of the total cost of generation". By 2020, imports from Ethiopia covered about 80% of supply (World Bank, 2020).
• Kenya: its government is "weaning off the more expensive heavy fuel oil (HFO) plants" (US Commerce Department, 2024). Thermal power fell to 8.1% of the electricity Kenya Power bought in the first half of 2026, from 10% a year earlier (Business Daily).

What each option offers.

• HFO: power at any hour, on sites near ports, with known technology. The costs are fuel imports, exposure to oil prices and higher emissions.
• Solar with batteries: low running costs and no fuel imports. The costs are land, battery replacement, and output that depends on weather and storage size.

Somalia's own plan pairs a large build-out of solar and storage with substantial gas-fired capacity.

Dependencies and implementation constraints

• For HFO: fuel import and storage at ports, foreign exchange, and emission controls.
• For solar: land, batteries and grid connection.
• For both: licences under the Electricity Act and agreements with existing town providers.

Risks and unknowns

• Oil prices: future prices after the 2026 spike.
• Fit with the national plan: whether EN-03 fits the ministry's generation plan.
• Demand: real demand for 400 MW of new capacity.
• Estimates: the cost comparisons use different years and scopes.

Questions members should verify before acting

1. Is EN-03 still part of the government's generation plans?
2. Who would buy the power, and at what price?
3. How would fuel be supplied and paid for?
4. What would solar with storage cost at the same site?

What is confirmed, and what isn't

Confirmed

• The government's proposals and their costs.
• The ministry's 2025 plan: its renewables priority, its candidate technologies and its reference-scenario results (Chapter 4 and Annex 3.1).
• IRENA solar costs, IPCC emission medians, and NDC capacity figures.

Our interpretation

• Fuel price risk is the main difference in running costs.
• The arithmetic on fuel cost, emissions and cost per kW, which is labelled as ours in the text.

Not yet verified

• An authoritative cost per kWh for large HFO plants.
• The current status of EN-03.

Relevant next steps

• Read the ministry's 2025 Generation and Transmission Plan.
• Follow the National Electricity Authority for new generation licences.