Godwin Muhwezi-Bonge
11 December 2007
The company will develop micro-hydro power dams on small rivers around the country
UGANDA's deprived energy sector is on the verge of taking off after another company expressed interest in generating power from renewable sources such as small rivers, agricultural waste, wind, and solar.
Okhela Renewable Energy Corporation, a South African energy company with experience in producing energy from natural resources, is negotiating with the government for a power purchase agreement.
"The long term power purchase agreements of say 20-30 years will make it possible to bring a significant change in the market," Mr Jacob Mabena, the chief executive officer of Okhela Renewable Energy Corporation, told Business Power.
In the first phase of the project the company plans to invest 3.5 million euros (Shs6 billion) to produce 10MW of electricity from domestic wastes before exploring other alternatives such as solar and wind energy.
The company will also develop micro-hydro power dams that produce about 5 MW of electricity on small rivers around the country.
Uganda has suffered energy deficits following the reduction of water levels in Lake Victoria that has seen the government open up the sector to allow more players.
It is estimated that the current demand for electricity is 360MW. However, the country can only produce 120MW from Kiira and Nalubale Power Stations and 100 MW from thermal power generators. Two more 50 MW thermal power plants will soon be installed in Mutundwe and Namanve.
"We believe it is important to open up the energy sector to more players and to have a clear and supportive regulatory environment," Mr Mabena said.
The government, in 1999, enacted the Electricity Act, which removed the monopoly in power generation, transmission and distribution, and established the Electricity Regulatory Authority with subsequent creation of Uganda Electricity Generation Company Uganda Electricity Transmission Company and Uganda Electricity Distribution Company (UEDCL).
Umeme Ltd, a private power consortium, was granted the distribution concession in March 2005 taking over from (UEDCL). The power tariffs have since risen, hitting the peak in October 2006. Commercial, medium consumers currently pay Shs261.5 and Shs282.8 respectively. Domestic consumers have to pay 298.2 shillings, an increment of 37 per cent.
Jacobsen, Electomaxx, Wanereco, and Aggreko are some of the energy power houses in Uganda.
However, the energy produced is still not enough to satisfy the ever-increasing demand for electricity.
It is projected that the demand for electricity in the next 20-years will be at 11,000 MW as the economy continues to grow at a rate of 6.2 per cent.
Currently, it is estimated that only 5 per cent of Uganda's population has access to electricity. And it is this gap that Okhela seeks to address.
"We want to work with the government to produce affordable, modern and clean energy for Ugandan citizens. We want to go all around the country and not just focus on the urban centres," Mr Mabena said.
According to the Ministry Energy, the government's long-term is to develop the other Victoria Nile hydropower sites, effect grid connection with as well as developing the renewable energy resources including small hydros, biomass, peat and geothermal.
OREC South Africa together with their technical partners, Venture SA, and the Stellenbosch are working on developing fourth generation large wind turbines mainly for the African market, which will also be deployed in Uganda.
"Karamoja region has with adequate wind speeds for production of wind energy," Mr Mabena said. "Uganda has enormous natural resources which can be harnessed to produce clean sources of energy, and significantly contribute to Uganda's energy security."
Although the country has abundant natural resources that could be used for clean energy production, the country currently relies on the expensive and environmental unfriendly thermal power generation.
Biomass resources in the form of the immense forests, agricultural wastes, municipal and animal waste, are some of the sources that the company will utilise to produce energy.
The combined contribution of renewable energy sources to the country's energy consumed is estimated at 1 per cent.
"We are serious about working in partnership with the Ugandan Authorities to increase access to energy for both the short and long term," Mr Mabena said.
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