Uganda struggles to satisfy its energy demand

By Nelson Wesonga, the Monitor UG.
The power sector is facing arguably its sharpest criticism since the government liberalised the industry in 1999. Manufacturers and the private sector, though agreeable to the need for more power, have expressed displeasure over the recent increase of electricity tariffs by between 36 and 69 per cent due to the partial withdrawal of power subsidies.

The increase was announced at a time when the country was grappling with rising demand for power, which outstrips generation by 5.3 per cent annually.

According to the Electricity Regulatory Authority, only 350MW is supplied yet demand peaks at 445MW. Ms Nokwanda Mngeni, the chief executive officer of Eskom Uganda partly attributes the inadequate generation to the limitation on the amount of water that Eskom is allowed to release in the process of generating power.

She says much as Eskom, Uganda’s largest generator of electricity, has the capacity to generate 380MW, the amount of water it is allowed to release is not enough to run the turbines.

According to Mr Mugisha Shilingi, the director of Water Resources Management, Eskom is allowed to release 800 cubic metres of water per second because that is the sustainable amount.

As a result of limited supply, power consumer have to endure 12 hours of load shedding daily, something that affects industrial productivity and compels some businesses to run on diesel generators.
The government had envisaged that within 10 years power generation would have increased from less than 100MW to about 400MW.
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Boosting industrialisation
And, with more generation, industrialisation would be boosted and also allow electricity consumers to pay lower tariffs.
But, eleven years later, the prevailing situation has raised calls for the repossession of the generation and distribution functions of former Uganda Electricity Board assets from private players.

In November last year, city traders took to the streets to protest against load shedding, which they said had increased the cost of doing business since they had to buy expensive diesel to power generators.
There are also allegations that power distributor, Umeme, despite denials, has not invested in transformers, distribution cables, poles, and prepaid metres that would have helped to reduce commercial losses to less than 30 per cent.

Work on the 600MW Karuma Hydropower Project is expected to begin in June and should be completed in five years –at a cost of about $2.2 billion. However, independent experts say the dam cannot be completed in fewer than 10 years, which means that unless other sources of power are tapped in the short term, Ugandans will still face the same power crisis they are presently facing.

“The country will need to refocus on hydropower, geothermal and biomass generation as well as gas,” says Mr Aston Kajara, the state minister for Privatisation.

“We proposed the increment because we would not want the government to directly subsidise power consumers, Mr John Julius Wandera, the public relations officer of ERA told Saturday Monitor recently.

The government, which was previously against increases of power tariffs because they result in civil strife and disruptions to the economy, believes this is the only sustainable way to go about the matter.
Mr Wandera says the government usually delays to remit money for the subsidies, which prompts generation to switch off their generators due to accumulated areas.

With other projects like the 600MW Karuma Project yet to take off, and with oil extraction not expected until the end of 2012, power consumers should not expect any respite from load shedding and high tariffs.

Renationalising the sector
According to Mr Caleb Akandwanaho (Salim Saleh) the government should repossess the assets of the former Uganda Electricity Board (UEB), and should also invest in a 200MW heavy fuel oil (HFO) generator to eliminate private firms which only target to make profits.

However, oil extraction that is expected to begin at the later part of this year is likely to bring respite as the president recently promised Ugandans that at least one well will be dedicated to producing power.
Mr Akandwanaho chaired the Interim Review of Electricity Tariff Committee whose recommendations have not been implemented two years since it released the Report on Electricity Tariff Reduction, September 2009.