Twenty megawatts of solar energy is to be added to the national grid by the end of this year on completion of two solar stations in Tororo and Soroti, Electricity Regulatory Authority (ERA) has said
By Alfred Wandera & Samuel Sanya
Twenty megawatts of solar energy is to be added to the national grid by the end of this year on completion of two solar stations in Tororo and Soroti, Electricity Regulatory Authority (ERA) has said.
ERA Principal Financial Analyst, Vianney Mutyaba, on Monday told New Vision that the two solar plants – Access in Soroti and Simba Group in Tororo – each producing 10MW, will increase the country's electricity supply from the current 852MW to 872MW.
Mutyaba was speaking at ERA House after a media roundtable discussion on the impact of the current macroeconomic situation on the electricity sector.
"Electricity demand is growing day and night. Although currently we are having electricity surplus, we cannot be complacent. The economy is growing as more investors come to Uganda to set up industries. We need to continue generating more electricity," said Mutyaba.
However, Mutyaba said the new solar electricity will not have an impact on the tariff as the two manufacturers were licensed to produce the power at the weighted generation tariff of $11 cents (sh330) per megawatt, which is equivalent to the current production cost of power by the existing producers.
He added that Uganda’s electricity demand at peak is 529MW, 446MW at shoulder and 361MW off peak period.
Uganda’s installed electricity capacity mostly consists of hydropower (692 MW; 84%). By 2013, access to electricity at national level was very low at only 15%.
Statistics show that about 90% of the total primary energy consumption is generated through biomass – firewood (78.6%), charcoal (5.6%) and crop residues (4.7%).
Electricity contributes only 1.4% to the national energy balance. Uganda currently has one of the lowest per capita electricity consumption in the world with 215 kWh per capita per year (Sub-Saharan Africa's average: 552 kWh per capita, World average: 2,975 per capita).
During the media round table, Mutyaba noted that the review for a new electricity tariff for the second quarter is nearly completed. Speaking about developments to components of the tariff like the exchange rate and inflation he said: "The picture does not look good."
He said that though international oil prices have gone down to $55 (sh163,900) per barrel from $80 (sh238,400), the average monthly dollar exchange rate at the end of February has risen to sh2,894.2 from sh2,779.9 in the last quarter.
Mutyaba explained that the exchange rate affects the cost of materials used by actors in the electricity sector. An expensive dollar also makes it hard to service debt, pay taxes and return on investment targets.
"If there are local companies that can supply the electricity sector in the required quantity, quality and timelines, we welcome them wholeheartedly," he said.
Julius Wandera, the ERA publicist explained that the tariff cannot be adjusted by more than 2.5% if there were to be an increase. He said that plans by the manufacturing sector to pool resources to buy the 250MW Bujagali hydropower plant are a welcome development.
The consumer tariff of sh531 per unit for domestic consumers is one of the highest in the world; this is partly due to high interest repayments on the Bujagali hydropower plant.
20MW of solar energy to be added to national grid