By Ibrahim Kasita
SEEN from the space, Uganda at night is dark. Only urban towns and few rural areas access electricity. Only 10 out of 100 households access electricity.
The majority in rural areas rely on wood, charcoal or animal waste for cooking and heating causing a major barrier to fight poverty.
Whenever demand for electricity outstrips supply, the lights go out –for over three hours. The prolonged drown that lasted for five years –caused by the climate change –reduced Lake Victoria levels.
Government had no option but rely on thermal expensive thermal generators to bridge power shortfall which slowed down the impressive donor-driven economic growth spurt in 1990s.
But this was at a cost. Areas surrounding the thermal plants experienced deafening noise and exhaust fumes that posed health hazards to the community.
Above all cost per unit of electricity soured to over sh400 up from the previous sh181. This made electricity more expensive and further reduced the number of people accessing electricity since they could not afford to pay.
Need for clean energy
Uganda is among the first 12 countries to benefit from the United Nations “Sustainable Energy for All” aimed at facilitating clean energy access to rural areas.
It involve universal access to modern energy services, doubling the share or renewable energy in the global mix and doubling the global rate of improvement in energy efficiency.
Indeed, switching to clean energy isn’t just the best choice, it is option. For the last seven years, 60% of electricity supplied is from diesel powered generators.
The increases in international fuel prices have made electricity expensive. Many people use fuel wood and biomass leading to depletion of forests and environmental degradation.
“Renewable energy not only provides clean sources of energy but also provide energy security,” Dr Benon Mutambi, the head Electricity Regulatory Authority (ERA), agrees.
According to the Renewable Energy Policy of 2007, Uganda has considerable unexploited renewable energy resources for energy production and provision of energy services.
They include biomass, geothermal, large scale hydro, mini/small/micro/Pico hydro, wind and solar energy with total electrical capacity to generate 5, 300MW. But only 13% has been exploited.
Energy derived from the sun, small water sources (mini hydros), the earth heat (geothermal) has the potential to meet the electricity needs to transform the quality of life and improve the economic prospects.
It is estimated that both solar and small hydro peppered around the country can generate total of 400 MW to supplement bigger projects on the River Nile.
Small hydropower projects are faster to construct as they take utmost two years to commission bring economic benefits to many rural areas as most projects are located away from large urban areas contributing to increased rural electrification.
They also produce little or no waste products such as carbon dioxide or other chemical pollutants.
Despite the long term economic sense for renewable energy, there is little interest in investing in clean energy because of the high upfront costs involved.
It is not the best time to be looking for $48b investment needs ever year. But that is what we need to find –now –if we are to move towards a fully renewable energy supply for everyone.
The beauty is Uganda has the right conditions. The year 2011 also saw the passing of a renewable energy feed-in-tariffs for small power projects with capacity not more than 20MW.
The tariffs are an internationally recognized regulatory mechanism used to promote and increase the amount of electricity generated from renewable sources by providing a fixed tariff based on the levelised cost of production at a given time.
Also in place is the standard power purchase agreement that makes energy businesses more predictable and profitable.
Carbon credits income
Renewable energy projects can earn extra money because their technologies will result in reductions of greenhouse gas emissions targeting carbon dioxide emissions.
For instance the multi-dollar Bujagali hydropower project has been approved as a Clean Development Mechanism (CDM) and sustainable development project.
As a CDM it could earn about $17 million per year from selling certified emission reduction (CER) credits to developed countries, as part of their emission reduction targets, under the Kyoto Protocol of the UN framework Convention for climate change.
The CDM is a project-based mechanism which encourages sustainable energy consumption and development by providing incentives for investment.
The CDM delivers development dividends by providing credits and offering incentives for the diversifying and increasing reliability of energy supply, reducing dependence on fossil fuels and increasing rural electrification.
While it is hard to predict with certainty how the CDM will evolve, it is clear that Uganda can begin to take preparatory steps to benefit from financing mechanisms and increased emphasis on renewable energy.
Policy makers and financial institutional need to develop financial instruments that encourage investments in renewable energy and there is educate project developers on packaging their projects in a manner that will qualify them for carbon credit financing.
Politicians need to clearly support renewable energy and energy efficiency and create supportive legislation to build investor confidence.
Ugandans should install any effective energy-efficiency measures they can afford –in their own homes, businesses or communities –assuming these make environmental and economic sense.
Increased access to energy will end poverty as it is vital for Uganda’s continued economic development.