Concerns. Experts say should the industrial loads not materialise as envisaged, the quantity of surplus power would significantly increase and this would be a financial burden to UETCL, writes Nelson Wesonga.
Who will consume our surplus electricity?
A driver in an excavator’s cab pushes its bucket ground-engaging tool into the sides of a hill in Rubirizi District in western Uganda.
Using the tool, he scoops soil and heaps it nearby to fashion a watertight enclosure into which water from Kyambura River will be diverted to work on the spot where a hydropower plant will be constructed.
There are many such projects in different phases of construction in different parts of Uganda.
Those that will be commissioned between now and 2020 will increase Uganda’s installed electricity capacity from 936MW to about 2,000MW.
To absorb the power, the government intends to increase connections to the grid over time. Between now and 2027, it intends to connect 300,000 households through rural electrification projects. About $94 million (Shs361 billion) provided by the World Bank, the African Development Bank and KfW has been budgeted for that.
The money will be spent on constructing more distribution lines and offsetting or subsidising connection costs.
Besides rural electrification, Uganda’s main power distribution company will be required to connect even more people to the grid.
Local demand though, according to a report by Electric Power Development Company Limited and Nippon Koei Co Ltd, will be anything between 755MW to 1,094MW in 2018, between 881MW to 1,094MW in 2020 to between 1, 112MW to 1,538MW by 2023.
Other measures to increase the consumption of electricity include encouraging investors to build factories in Uganda, lowering retail tariffs so homeowners or businesspeople have not excuse not to use more electricity. The government also plans to export some surplus electricity there might be to the DR Congo and South Sudan.
A 2017 paper by the Uganda Electricity Generation Company Limited (UEGCL) says Uganda could potentially export 250MW to the neighbouring countries.
How measures impact on consumption
According to Tuzinde Mbaga, power distributor Umeme’s head of regulatory affairs, the average growth in consumption by domestic customers does not necessarily increase at the same level with the growth in their customer numbers.
For instance, between 2012 and 2017, the average growth in domestic customer numbers was 16 per cent. However, the average growth in consumption by the domestic users over the same period was eight per cent.
“In other words, the customer numbers are growing at a faster rate than what they are consuming,” Mr Mbaga said at a forum for electricity supply industry chief executive officers in Kampala. “If we are to do anything different, in terms of increasing consumption, concentration should be on industrial consumers.”
Mr Valentine Katabira, the deputy chief executive officer of the Uganda Electricity Transmission Company Limited, said much as industries would use more power, there are concerns that some might not use as much as has been projected.
“…we have had times when we were told ‘we need so many megawatts in an area’, [so] we put our best step forward to make sure they are supplied and when they come, people who had said they would start with 50MW only [take up] five,” Mr Katabira said recently.
He said should the industrial loads not materialise as envisaged, the quantity of surplus power would significantly increase and this would be a financial burden to UETCL, which would have to pay for energy which could have been dispatched by the generation plants but was not dispatched because it would not be consumed.
Money used to construct Karuma and Ayago hydropower plants was borrowed from China, loans that have to be repaid within 20 years.
Though he did not say it, whereas it is projected that the Standard Gauge Railway (SGR) will use 300MW, SGR in September 2017 announced via Twitter that the Malaba-Kampala stretch will use 50MW.
To ensure industrial concerns use more power, Mr Mbaga called for other incentives. On that, the Electricity Regulatory Authority chief executive officer, Ziria Tibalwa Waako, said there are incentives to encourage consumption of more energy.
“On tariff incentives for industrial load growth, the regulator is ahead in this area. One, we have the off peak tariff, which somewhere between five [Shs192] and six US cents [Shs231] per unit,” Ms Tibalwa said. “Second, we have the rebate policy.”
Besides low end-user tariffs, however, it is common for prospective investors to demand for tax holidays and free land before they can set up shop. As an additional measure to absorb surplus electricity, the government intends export some to South Sudan and the DR Congo.
Currently, Uganda exports some power to Rwanda, Tanzania, Kenya and in return gets inflows. However, there are concerns that once Kenya, say, gets hooked through the East African Power Pool to cheaper power, costing three US cents (Shs116) per unit from Ethiopia, it might reduce its power imports from Uganda.