TACKLING THE ENERGY CHALLENGE IN UGANDA FOR SOCIAL ECONOMIC DEVELOPMENT

Presentation P t ti by F. A. Kabagambe Kaliisa Permanent Secretary y of Energy gy and Mineral Development p Ministry

at
17th National Technology Conference, Golf Course Hotel, Kampala 15th June, 2012

OUTLINE OF PRESENTATION
1) Introduction 2) The Energy Challenge ) Measures Put in Place to Address the Energy gy 3) Challenge:
Appropriate Policy, Legal and Institutional Framework Introduction of a Strategy with a Mix of Energy Sources for Power Generation. Rural Electrification Program Power Loss Reduction Program Energy Efficiency Program Strategies for Improving Efficiency in use of Biomass Energy

4) Conclusion

1.0 INTRODUCTION
Energy is the lifeblood of our day to day activities and our economy,
Energy is needed for cooking, transport, lighting, industries, social services, etc.

Energy, Economy and the Environment (E3) have very complex relationships.
A perfect balance between three leads to sustainable development. p Unsustainable exploitation and utilization of energy is contributing to global warming and climate change.
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Energy and National income and consumption per capita

Ugandas has a low GDP that is partly driven by energy consumption reason for being above the line. The Agriculture sector that contributes to our GDP is not 4 energy intensive

Policy Simulations conducted on poverty reduction

13 Experiments were conducted p To p predict, , in advance, , how the poverty p y rate Purpose: would change as a result of various policies.

Impact is measured in terms of: Consumption: percent change from status quo in 2002/2003 Poverty: change in percent points as compared to official poverty p y rate in 2002/2003

Looking at the impact of rural electrification, increase in family size, improvement in Education, health services and transport we note the following:
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Policy Simulations
Policy

% change in consumption p

Change in poverty p y rate

Electrify communities Halve distance to community services Road within 1km of village center One more adult female who completed sec school Add child if household already has at least one

7.3 2.6 0.2 10.8 -11.2

- 9.3 -3.0 -0.3 -8.2 10.8

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Conclusion from the Simulations

Increase in household families greatly i increases poverty t l levels. l If one was to rank the policies as to how they reduce poverty levels, rural electrification would be top on the list list.

2.0 THE ENERGY CHALLENGE

Energy projects are capital intensive hence the need to secure reasonably priced capital for the projects. Lack of an energy mix strategy in power generation. Low level of access to electricity (about 16%) coupled with low Per capita electricity consumption (70 kWh) compare with other countries, Africa - 580 kWh (Average) Korea 8,500 kWh, South Africa 5,000 kWh and 8 China 2,400 kWh.

2.0 THE ENERGY CHALLENGE CONTD

High power losses in the power network that has a negative impact on the tariff. Low level of Energy Efficiency in the utilization of energy. Biomass contributes over 90% of the p primary y energy gy demand yet its production and utilisation is inefficient resulting in adverse effects on the environment and health of the users.
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3.0 MEASURES TO ADDRESS THE ENERGY CHALLENGE

3.1Challenge: Capitalization of Energy Projects How it was addressed A Putting in place an Appropriate Legal and A. Institutional Framework
i) The Energy Policy for Uganda Goal: To meet the energy needs of Ugandas population for social and
economic development in an environmentally sustainable manner

Objectives:
To establish the availability availability, potential and demand of the various energy resources in the country To increase access to modern affordable and reliable energy services as a contribution to poverty eradication To improve energy governance and administration To stimulate economic development To manage energy-related environmental impacts

ii) Renewable Energy Policy for Uganda 2007

It aims to provide a framework to increase in significant proportions the contribution of renewable energy in the energy mix mix. Main features:
Introduced the feed in tariffs. Standardized Power Purchase Agreements Agreements. Obligation of fossils fuel companies to mix products with biofuels up to 20%. Tax incentives on renewable energy technologies.
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iii) Legal Framework

The Electricity Act, 1999: The salient f t features of f th the Act A t are t to provide id the th enabling legislation for: Liberalising the electricity industry; Unbundling of the Uganda Electricity Board into three entities namely generation generation, transmission and distribution; The establishment of Electricity Regulatory Authority (the ERA) to regulate the sector;
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C. Salient features of the Act Contd

The establishment of the Rural Electrification F d (the Fund (th REF) REF), with ith th the main i objective bj ti of f enhancing rural access to electricity; and The establishment of the Electricity Dispute Tribunal (the EDT) that has jurisdiction to hear and determine electricity sector disputes which are referred to it.

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The Impact of the Reforms

Reforms have improved the sector performance and attracted additional investments which include:
Generation infrastructure such as Bujagali Hydropower, Hydropower about US$ 860 M Over US$ 200 M from Construction of Renewable energy projects such as Nyagak 3.5 MW Mpanga 18 MW, Bugoye 13MW, Buseruka 9 MW, Ishasha 6.5 MW Cogeneration 25Mw etc Generation concession Eskom invested over US $ 10 M Distribution Umeme Ltd has invested about US $120 M Additional investments by the Rural electrification concessions. 14

B. The Energy Investment Fund

To facilitate the smooth implementation of the strategic plan, an Energy Fund was established to enable government to speed up investments in hydro power projects and the associated infrastructure. Money from the treasury is put into the fund annually.
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3.2 Challenge: Lack of an Energy Mix Strategy to Ensure Energy Security

How it was addressed: Strategic Plan prepared which had various energy sources in the Generation Mix. Background Information In 2006, Government prepared a plan to meet the shortfall in power supply in the Short term, Medium term and long-term. The broad objective was to provide adequate and reliable power supply to the country. country In 2006, the power supply deficit was 90-210 MW necessitating a 24 hr load shedding rotating Rota. The acute electricity supply shortage did negatively impact on GDP which dropped from an average 6.5% over the last 10 years to 5% in 2005/2006.

Strategic Plan for Increasing Generation Capacity

a) ) The Th shortshort h t-term t measures (2006/2007):(2006/2007): (2006/2007) Procurement of Thermal Generation Capacity. Energy loss reduction: This involved an aggressive energy loss reduction in the power system. Energy Efficiency/Demand Side Management.
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b) Medium-term Plans (2006/07 2010/11)

Development of the Bujagali Hydroelectric Project (250MW). Development of f the Karuma Hydroelectric Project (600MW). Use of indigenous petroleum resources for thermal generation Renewable Energy Generation Projects. Use of Solar Photo Voltaics (PV) and Solar Water Heaters. Heaters Use of Biogas, improved efficiency stoves to cater for rural energy requirements and production of electricity from municipal waste for sale of power into the grid will be enhanced.

c) Long-term Measures (2012 2025): The development of large hydro power sites, namely Isimba (140 MW) Ayago (600MW) in 2012 namely, 2020 and Uhuru (300MW) Interconnection of the regional power grid; Use of new (like geothermal) and renewable sources of energy as well as biomass, like peat. Use of fossil fuels locally produced to generate thermal power

3.2 Progress Made on the Implementation of the Plan

A. Short Term Measures

g y and other Thermal Power 1. Emergency Projects A total of 170 MW was procured.
50 MW Aggreko at Kira in Jinja which was decommissioned last year. 50 MW high speed diesel plant at Mutundwe which was decommissioned this year after Bujagali Hydropower plant started d operation. i Jacobsen As installed a 50 MW Heavy Fuel Oil (HFO) plant on a Build Own Operate and Transfer (BOOT) basis at Namanve in the Industrial Park. In future this plant will use locally produced heavy fuel oil. 20MW with HFO at Tororo by Electromaxx 20

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A. Short Term Measures contd 2. Improving p g efficiency y of electricity y consumption p through adoption of the Compact Fluorescent Lamp (CFLs) Replacement of 800,000 incandescent Lamps with CFLs reduced the peak demand by 30 MW. 3. Reducing power system losses 3 losses. A loss reduction program was implemented which has been reduced the losses from 36% to 27%
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C. Progress on Medium-term Measures

Status of the Bujagali Project Bujagali plant of 250 MW is being developed by Bujagali energy Limited (BEL) as a private developer. Bujagali is now delivering 150 MW after commissioning 3 units, a measure that has done away with load-shedding. The fourth unit will be commissioned in June and the last one in July 2012 when the plant will be f fully The uninterrupted power supply is expected to enhance economic activities and has reduced on the use of expensive standby diesel and petrol 22 generators.

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Aerial View of the Bujagali Project

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Installation of Unit 5

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D. Other Projects being Developed - Medium Term

Construction of Karuma (600 MW) power plant as a public Project will commence later this year after completing the procurement process of an EPC contractor. This plant is expected to be commissioned in 2017. Feasibility studies for Isimba (140 MW) will be completed later this year year. This will be developed by the private sector. It is also expected to be commissioned around 2017.
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Ayago Hydropower Project (600):

The prefeasibility studies were completed in 2011 with the support of the Japanese government government. Full feasibility studies started in April 2012 to be completed next year. Project to be developed as a Public Private Partnership.

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E. Renewable Development
Status of Development Mini hydro Power Plants
Project Mpanga p g Mini Hydro y ( (18 MW) ) Ishasha Mini Hydro (6.5MW) Bugoye Mini Hydro (13 MW) Mobuku I (5 MW) and Mobuku III (9 MW) Mini Hydros, Buseruka (10 MW), Maziba (1 MW) N agak I (3.5 Nyagak (3 5 MW) Kikagati (16 MW) Status Operational p Operational Operational Operational

Commissioning expected early, 2012. Under rehabilitation. st Commissioning e expected pected in 1s Q arter 2012 Quarter, 2012. Feasibility studies completed construction soon to commence. Nyagak III (4MW), Olewa I (0.6MW) Feasibility studies completed. and Olewa II (0.6 MW)

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E. Renewable Energy Development Contd

Detailed feasibility studies for a number of sites totalling 60 MW were completed and are due for implementation once negotiations with UETCL and Government are complete. These include: Mitano (2.9 MW), Lubilia (5.4 MW), Nyagak III (3 MW); Siti (22 MW), Waki (5.4 MW), Ndugutu g (0.5 MW), ( ), Nyamwamba y (14 MW), ( ), Nengo Bridge (7.5 MW) and Esia (0.11 MW). In addition, an EPC contractor is being procured to undertake the rehabilitation Maziba (1 MW).
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E. Renewable Energy Development Contd

In addition, feasibility studies for other sites (O Over 70 MW) such h as Nshungyezi N h i (22 MW) MW), Ntono (2.5 MW), Kakaka (7.2 MW), Muyembe (10 MW), Kyambura (8.3 MW) and Musizi (20 MW) are in their final stages. Additional Additi l power will ill b be f from C Cogeneration ti of f th the sugar factories that have a potential to add an additional 75 MW to the national grid.
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F. Transmission Projects Medium Term A number of transmission lines have been earmarked to evacuate power from the generation plants and transmit it to different parts of the country . These include: Nkenda Mputa Hoima (132KV, 254km); Karuma Kawanda (400KV, 264 km); Karuma Olwiyo (132KV, 60km); Karuma Lira (132 KV, 80km); Karuma-Gulu (132KV, 70km); Isimba interconnection (132KV, 40km); Kawanda Masaka (220KV, 142km). 30

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F. Transmission Projects Contd:

Kampala Entebbe (132KV); Mi Mirama Kabale K b l (132 KV) KV); Hoima - Kafu (132 KV); Lira Gulu Nebbi (132 KV); Opuyo Moroto (132KV, 200km); p y Lira upgrade pg ( (132KV, , 260km); ); Tororo Opuyo Mbarara Nkenda (132KV, 160km) and Lira-Kitgum (132KV, 125km).
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3.3 Challenge: Low level of access to Electricity

How it is Addressed: Rural Electrification Programme put in Place
The country rural electrification program aims to achieve coverage of at least 10% in the rural areas after ten years. The program is targeting district headquarters, production d ti areas to t support t Agricultural A i lt l modernization, socially desirable areas like schools, health centres, water supply facilities and trading centres which provide services to the rural 32 population.

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Status of Rural Electrification Program

i) Low Voltage Line (LV): 3,100km have been
constructed, ii) Medium M di V Voltage lt Li Lines (MV) (MV): 3,100km 3 100k h have b been constructed, iii) As a result, 1,280 rural communities (villages, trading centers, social centers and public institutions) have access to power. iv) At least 38,350 connections have been made with a potential of 120,000 connections anticipated.

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C. Photo Voltaic Target Market Access model (PVTMA)

The Ministry is also promoting the utilization of solar energy through the Photo Voltaic Target Market Access model (PVTMA). This promotes consumer credit and provides consumer subsidies under the Energy for Rural Transformation Program g Phase Two. To-date 2,540 connections and 12,000 off grid solution PV systems are expected before the end of the year. Target is to promote 20,000 solar systems 34

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3.4 Challenge: High System Losses

How it is addressed: Power System Loss Reduction Program Total p power system y losses in the in the distribution network have reduced from 36% in 2008 to about 27% by end of 2011. The commercial losses (power thefts) pose the biggest challenge. Umeme and Government have come up with a strategy to reduce the losses to about 17% by 2016. The measures c udes includes:
Tacking issue of power theft Introduction of Pre-Payment Meters Use of Low Volt Aerial Bundle Cables (ABC) Introducing Automated Meter Reading (AMR) for large customers Eliminating unmetered customers

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3.5 Challenge: Low level of Energy Efficiency

How it is Addressed: Energy Efficiency Program in Place
A. Awareness Campaigns A Energy Efficiency Week an annual event. Main activities:
Media campaigns to create awareness in the Public. An exhibition of Energy Efficient and Renewable Energy technologies has been held in different places: Mbale (2011), Mbarara (2010), Kampala (2009), Jinja (2008), Kampala (2007), Kampala (2006), Kampala (2005). Road shows promoting Energy Efficient and Renewable Energy technologies

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B. Energy Auditing
Energy audits are carried out at the different levels aimed at identifying areas of improving efficient utilization of energy & cost reduction: A number of firms have been audited:-Hima Cement Southern Range Cement, Nyanza Ltd, Nile Breweries, Uganda Breweries Ltd, Steel Rolling Mills Ltd, Crown Beverages Ltd, Britania Ltd, Mukwano, etc. Energy Audit at Southern g Nyanza y Ltd Range

Case Study : Hima Cement Energy Efficiency Implemented Energy Audit conducted in Hima cement. The Audit made recommendations. recommendations Investment Cost in Energy Efficiency improvements was, U Shs. 1,160 million. After investment, the annual gy savings g was Energy i) 1,278,000 kWh ii) 636,000 litres of furnace Oil Annual Savings, Ug Shs. = 565 million Payback Period= 2yrs

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D. Energy Audit in Public Institutions

The latest energy audits were conducted in 6 public universities, 105 public school & collages, 24 referral hospitals, 10 National Water & Sewerage Corporation water pumping facilities, KCCA street Lighting and 20 public building. Energy efficiency investments have been made in the institutions with an anticipation of saving 10 GWh of electricity annually.

Installing solar heater to replace electric heater in a referral hospital

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E. Energy Efficiency Legislation

The Ministry is working on an Energy Efficiency and Conservation Law whose objective is to encourage the use, development, promotion, and commercialization of sustainable and efficient energy technologies. In addition, the ministry working together with UNBS are developing energy efficiency standards for selected appliances namely air conditioners conditioners, fridges fridges, motors, energy savers and fluorescent tubes. The main objective of introducing energy efficiency standards is to eliminate inefficient appliance on Ugandan market. 40

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3.6 Challenge: Predominant role of Biomass in the Primary energy supply

How it is Addressed: Strategies for promoting Efficiency in the use of Biomass Energy put in place: The ministry is promoting the use of efficient technologies such as improved charcoal and household cook stoves and Improved Institutional cook stoves. These use less than 50% wood fuel in comparison to the traditional cook stoves. In addition, there is training of artisans in construction of improved cook stoves. Plantation of trees to provide for wood fuel. Wood lots has been encouraged for all families.

a) Improved Household Stove

Improved Rocket Lorena Stove is more efficient saving 50-60% of the fuel used by an open fire Hardly produces smoke in the kitchen during operation Easy to operate Environmentally friendly

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b) Energy Efficient Charcoal Stoves Promoted

Energy efficient stoves can save more than 50% of wood consumption needed for cooking. They are built from local materials. materials Cost is about Shs 15,000 20,000 for an average size and is recoverable in a very short time.

Traditional Metal Jiko

This is the original stove mostly used in urban areas. It is cheap but wastes a lot of energy

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c) Promotion of Efficient Institutional

Stoves
Institutional stoves can

save more than 50% of wood consumption needed for cooking. They are free from smoke which is responsible for respiratory diseases arising from indoor pollution.

Institutional Stove constructed in one of the Prisons

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d) Use of Biogas as an Alternative Sources of Energy

Biogas is another key energy resource that is being promoted as an alternative to wood fuel. A study carried out in 2008 established that there was a big potential of over 200,000 digesters across the country. Biogas can be obtained from any other digestible material such as cow dung, pig dung, chicken droppings, pp g , g goat droppings, pp g , human waste etc. There is a programme to disseminate biogas in the country coordinated by Heifer International with the Ministry support.

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4.0 CONCLUSION
The key energy challenge in Uganda is centered around lack of a mix of energy sources in power generation, low level of access to modern energy, inadequate infrastructure for generation, transmission and distribution and low level of energy efficiency. To address this, Government has prioritized Energy Development as a high level issue for the country and as a result considerable investment is being channeled towards development of energy infrastructure. Governments plan to provide adequate and reliable power supply is in progress with the commissioning of Bujagali hydropower project underway and development of large hydro and several renewable energy projects under development. With the development of the sector and increased access to modern energy services, the country is bound to 47 experience increased social economic development.

Thank You for Your Attention !!!

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