Heavy Fuel Electricity Could Return In 2014 As Demand Hits 12%

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Ugandans may be forced to learn to cope without electricity in 2014 David Tumusiime

Ugandans may be forced to learn to cope without electricity in 2014 Login to license this image from 1$.

In short
Last week ERA announced an adjustment in electricity tariffs but also revealed that government expects to spend at least Shs59.6bn in 2014 on heavy fuel oil plants located in both in Tororo and Namanve. The plants have an installed capacity of 100MW but generate electricity at a much higher price than hydro-electric plants – Bujagali, Kira and Nalubaale.

The Electricity Regulatory Authority (ERA) has said the demand for electricity in Uganda is growing at a rate at 12percent up from 10percent in 2012. The peak demand – time Ugandans use most electricity - for electricity rose from 470MW at the end of January 2013 to 503MW by end of December 2013. This is growth of 7percent in 2013 alone. With the growing demand that means by end of 2014, demand will have outstripped the current supply, estimated to be 516MW from the hydro-power plants. Benon Mutambi, is the Chief Executive Officer, ERA: 

//Cue in: The estimated demand…
Cue out: …our national objectives//

Mutambi said this while addressing a media briefing on the performance of the electricity subsector in the first half of the financial year 2013/14, on Tuesday evening. Last week ERA announced an adjustment in electricity tariffs but also revealed that government expects to spend at least Shs59.6bn in 2014 on heavy fuel oil plants located in both in Tororo and Namanve. The plants have an installed capacity of 100MW but generate electricity at a much higher price than hydro-electric plants – Bujagali, Kira and Nalubaale. Mutambi was however quick to note that the thermal plants were not turned on in the whole of 2013. Adding that the thermal plants run by Electromaxx and Jacobsen can only be turned on as a last resort, insisting that hydro electricity currently being generated is enough to meet the current demand. 

//Cue in: Much as we still… 
Cue out: …from these two heavy fuel oil plants//

In 2005, electricity generation in Uganda fell by over 50percent and that is when the heavy diesel plants were hurriedly introduced in the market, at a high cost. The government subsidized this electricity and between 2006 and 2012, government had paid a total US$600m in subsidies to keep the electricity tariff lower. Mutambi notes that when the 250MW Bujagali Plant came online in October 2012, it “provided the much needed relief from expensive sources of generation and eliminated load-shedding.” 

As demand grows at 12percent that means in 2014 alone, Uganda will need an average of 60MW of renewable energy being added onto the grid. The next hydro power projects – and other renewable projects – are expected to come on board in the next three years to avert a potential energy crisis like the one experienced in 2005. Mutambi, revealed that the first 150MW coming on board in the three years, is part of a project – The Global Energy Transfer for Feed-in-Tariffs (GETFiT) to incentivize investors who want generate electricity from mini-hydro dams of between 20MW and 4MW.  The writing is however on the wall that if Uganda doesn’t increase generation capacity, then an energy crisis is on the horizon. Even Mutambi admits that;

//Cue in: If there was nothing to be done…
Cue out: …to bridge that likely gap// 

Additional large hydro power projects, like the Karuma 600MW Hydro Power Dam and the Isimba 183MW Hydro Power Project are expected at least in 2017 and 2018, respectively.   

 

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