From the use of solar panels to small and large hydropower plants, the energy sector is steadily growing, the government has said.
Irene Muloni, the minister for Energy and Mineral Development, said electricity generation capacity has generally improved as well as power consumption. Citing figures from the Electricity Regulatory Authority (ERA), Muloni said power production has grown to 947MW from 300MW in 2002.
Speaking during the 7th annual joint energy and mineral sector review, which was held recently, Muloni noted that the power generation capacity is expected to hit 1,994.5 MW by 2020 when the construction of more energy plants is completed.
“Government is focused on its priority of increasing access to clean, reliable and affordable energy to its population. We expect Uganda to be able to consume the power,” Muloni said.
She added: “Uganda’s electricity consumption, which is an important indicator of economic activities, has also registered growth in the past two years as demand for energy expands.”
James Banaabe, the acting director at the Energy Resources department, in the ministry, revealed that the recent increase in electricity generation and the continued strengthening of the transmission and distribution network have improved power supply in the country.
“Access to electricity has also grown from the baseline statistic of 17 per cent in FY 2014/15 to the current parameter of 22 per cent in FY 2016/17. This is attributed to the improvement of the whole production system,” he said.
However, power tariffs remain a source of concern. According to Banaabe, several tariff adjustments and associated revisions to the tariff-setting formula, have considerably improved the sector’s financial viability.
The end-user tariffs are set by the Electricity Regulatory Authority (ERA) based on revenue requirements of the generation, transmission, and distribution companies and the terms of various contracts with the private generation and distribution companies.
The basic principle is that the sector is expected to be financially viable and that each generation, transmission, and distribution company meet the performance targets specified in their respective licenses.
High tariffs are partly the reasons for low access to electricity, and government has promised to make power prices affordable in addition to facilitating free connections in priority areas.
Muloni said government is working with various stakeholders to ensure that the power tariffs are friendly and affordable, especially for industrial consumers.
“Regarding increased connections for rural communities, government has put in place the connections policy which is awaiting approval by cabinet,” she said.
According to Muloni, the connections policy is a strategy document that looks at increasing the access rate through increased connections in rural areas.
Electricity demand grows at an estimated annual average of nine per cent since 2005 with peak domestic demand averaging 508MW, according to Uganda Electricity Transmission Company Limited (UETCL).
Muloni said to meet the needs of the growing economy, providing reliable, affordable, secure and sustainable energy requires exploring a range of options, including maximizing domestic production, diversifying the energy mix and the source of supply.
“We are endowed with abundant renewable energy resources, which are fairly distributed throughout the country. However, much of the potentials for renewables have so far not been exploited,” she said.
Muloni also explained that government is promoting the adoption of other renewable energy technologies like biogas, solar photovoltaic PV technology for lighting health centers and schools. Wind energy technology, which is currently under study in the Karamoja region, and geothermal energy could be exploited.
Although government is working hard to produce more power, industrialists and other power consumers believe the quality and reliability is the biggest challenge.
Gideon Badagawa, the executive director, Private Sector Foundation Uganda (PSFU), said the private sector does not mind about the price of the tariff; rather, the quality and reliability.
He noted that the challenge with unreliable power is that manufacturers lose a lot during the production processes.
“Take for instance Roofings Ltd or Nice Plastics: when they start their smelting or designing their products and power goes off, you kill the whole process and lose all that on the production line,” he said.
Badagawa added: “We have told government several times that industrialists are ready to pay more rather than having unstable power.”