New strategy for energy crisis
Dec 30, 2007
MORE new power generation facilities are being established due to a change in the strategy to tackle the energy crisis, creating hopes of reducing loadshedding. The new strategy is tackling electricity demand head-on instead of the old approach of chasing demand forecasts from behind.
By Ibrahim Kasita
MORE new power generation facilities are being established due to a change in the strategy to tackle the energy crisis, creating hopes of reducing loadshedding. The new strategy is tackling electricity demand head-on instead of the old approach of chasing demand forecasts from behind. This is through attracting local, foreign, public and private investors into the sector.
“Our instructions from the Government are that we should never chase demand. We should always have surplus generation capacity,†Daudi Migereko, the energy minister, explained.
“This will not only enable us to cater for the desired pace of economic development but also ensure that electricity ultimately reaches every part of the country as directed by the President.â€
He said senior officials in the energy sector were doing everything possible to diversify sources of power supply in order to increase supply and deliver power at affordable rates.
Already the Norwegian firm, Jacobsen Electro AS, has started work at Namanve to build a 50MW heavy-fuel oil thermal plant that is expected to deliver power in August 2008.
Uganda’s first local independent power producer, Electro-Max, will also build a 20MW heavy-duel oil thermal plant in Tororo. Initial power is expected in June next year.
“We have addressed several meetings appealing to the business community to invest in the energy sector. We hope they will respond,†Migereko said.
Several private companies have been licensed by the Electricity Regulatory Authority (ERA). These include West Nile Rural Electrification Company, Eco Power for the Ishasha hydro-site, China Shang Sheng International for the Kikagati hydro-site and Aggreko International for Lugogo and Kiira thermal plants.
Other private firms, which have been granted licences and permits for the Independent Power Producer (IPP) projects include Kakira Sugar Works for a 12MW co-generation project, Hydromaxx for a 10MW mini-hydro power project at Buseruka in Hoima and Invespro for a 50MW thermal plant.
All these are short-term projects aimed at providing electricity at lower tariffs. However, experience has shown that many would-be electricity project developers are delayed by the absence of long-term finance.
Many of them are looking for direct government support through the Rural Electrification Fund and the Private Sector Foundation.
“This could be due to the fact that most local banks do not have adequate leverage for financing long-term projects typical of the electricity sector.â€
To cater for medium-term electricity projects, construction of the long-awaited 250MW Bujagali hydro-power project is two months ahead of schedule.
The project’s lenders have agreed to release $682m to accelerate construction and ensure that initial power is commissioned by October 2010.
In addition, negotiations for a 200MW Karuma hydro-power project are in progress. Construction is expected to start in January.
The Government is ready to advance the $75m energy fund that was refunded back by Bujagali Energy Ltd to Norpak to kickstart the Karuma project, which is expected to be commissioned in 2012.
“Loadshedding has continued because our economic recovery was not matched by new investments in the sector, leading to expensive power tariffs,†the minister added.
“With the new investment initiatives, the current shortages are expected to become history soon.†The electricity supply stands at 255MW, yet the country requires about 280MW to power the economy, which is growing at 6% per annum.
However, Umeme, the power distributor, has failed to control electricity loses. About 95.29MW is lost annually, a situation that is hampering efforts to increase supply and distribution to the communities.
MORE new power generation facilities are being established due to a change in the strategy to tackle the energy crisis, creating hopes of reducing loadshedding. The new strategy is tackling electricity demand head-on instead of the old approach of chasing demand forecasts from behind. This is through attracting local, foreign, public and private investors into the sector.
“Our instructions from the Government are that we should never chase demand. We should always have surplus generation capacity,†Daudi Migereko, the energy minister, explained.
“This will not only enable us to cater for the desired pace of economic development but also ensure that electricity ultimately reaches every part of the country as directed by the President.â€
He said senior officials in the energy sector were doing everything possible to diversify sources of power supply in order to increase supply and deliver power at affordable rates.
Already the Norwegian firm, Jacobsen Electro AS, has started work at Namanve to build a 50MW heavy-fuel oil thermal plant that is expected to deliver power in August 2008.
Uganda’s first local independent power producer, Electro-Max, will also build a 20MW heavy-duel oil thermal plant in Tororo. Initial power is expected in June next year.
“We have addressed several meetings appealing to the business community to invest in the energy sector. We hope they will respond,†Migereko said.
Several private companies have been licensed by the Electricity Regulatory Authority (ERA). These include West Nile Rural Electrification Company, Eco Power for the Ishasha hydro-site, China Shang Sheng International for the Kikagati hydro-site and Aggreko International for Lugogo and Kiira thermal plants.
Other private firms, which have been granted licences and permits for the Independent Power Producer (IPP) projects include Kakira Sugar Works for a 12MW co-generation project, Hydromaxx for a 10MW mini-hydro power project at Buseruka in Hoima and Invespro for a 50MW thermal plant.
All these are short-term projects aimed at providing electricity at lower tariffs. However, experience has shown that many would-be electricity project developers are delayed by the absence of long-term finance.
Many of them are looking for direct government support through the Rural Electrification Fund and the Private Sector Foundation.
“This could be due to the fact that most local banks do not have adequate leverage for financing long-term projects typical of the electricity sector.â€
To cater for medium-term electricity projects, construction of the long-awaited 250MW Bujagali hydro-power project is two months ahead of schedule.
The project’s lenders have agreed to release $682m to accelerate construction and ensure that initial power is commissioned by October 2010.
In addition, negotiations for a 200MW Karuma hydro-power project are in progress. Construction is expected to start in January.
The Government is ready to advance the $75m energy fund that was refunded back by Bujagali Energy Ltd to Norpak to kickstart the Karuma project, which is expected to be commissioned in 2012.
“Loadshedding has continued because our economic recovery was not matched by new investments in the sector, leading to expensive power tariffs,†the minister added.
“With the new investment initiatives, the current shortages are expected to become history soon.†The electricity supply stands at 255MW, yet the country requires about 280MW to power the economy, which is growing at 6% per annum.
However, Umeme, the power distributor, has failed to control electricity loses. About 95.29MW is lost annually, a situation that is hampering efforts to increase supply and distribution to the communities.