6 August 2012

Uganda: Eskom Invests $15 Million in Power Stations

The lifespan of the ageing Nalubaale hydropower plant has been prolonged after a comprehensive upgrade and refurbishment worth $15m, the operator disclosed.

Eskom Uganda, the firm that was awarded a 20-year concession to operate and maintain Nalubaale and Kiira hydropower stations at Owen Falls Dam complex in Jinja, said power station can continue to run efficiently for another 20 years .

The Nalubaale Power plant was built in 1950s using old technology and as result of continued use for over 5 decades, the plant has deteriorated.

Normally hydropower plants are designed to generate electricity for a period of 50 years and then decommissioned.

However, over the past nine years, Eskom Uganda has invested over $15m to carry out comprehensive rehabilitation and refurbishment plan of the plant, which has extended it lifespan.

The money is above and over the capital expenditure investment and modifications minimum obligation of $6.8m, as per the license and the concession agreement respectively, underscoring the need to support the private sector.

"Plant failures/outages have been minimized by over 90%, due to the increased efficiency and plant availability has been maintained at 96% and above," Nokwanda Mngeni, the firm's managing director, explained.

"The switch yard has been refurbished, which has increased reliability of electricity supply."

Operations Manager Eskom Uganda ltd Steven Turabanabo explains to Journalists the Owen Falls dam cracks during a one day media familiarisation tour to the Power stations in Jinja. PHOTO: Mark Owor

The upgrade of Nalubaale Power Station has helped the plant to continue producing clean and cheap power to the national grid.

Nalubaale plant produces 180MW while the Kiira plant has 200MW bringing the total installed capacity of the two power plants to 380MW.

However, due to strict water release policy, the current average production is 139MW. This has raised the argument that Nalubaale plant should be shut down to allow effective use of Kiira.

But Mngeni explained: "That is possible but then it does not make sense to lose some energy from this (Nalubaale power station). The country still needs least cost energy."

In order to increase efficiency, tremendous effort has been invested in skills development and retention, through on the job training of both management and staff in decision making and focusing on results.

"The training has helped in key aspects like planning effectively, maximizing availability, reliability and capacity and task execution and compliance to contractual conditions," Mngeni said.

Eskom has implemented strict safety, health and environment policy which has reduced employee risks and fatalities at work. As at 28th February, the firm achieved 500 days without registering any injury or fatality.

"We have undertaken the national occupation safety association (NOSA) audit to ensure our operations has safety systems to address health and safety issues at work," she said.

Stephen Byaruhanga, the firm' financial director, said that they have used in-house skill to execute and commission projects with combined value of over 8.1m.

"In the last nine years we have had to re-do the technical parts of the plant, modernize the control room as new equipment were installed to help us monitor operations," he said.

He said most of the mechanical and technical tools come from abroad but their costs have escalated straining the firm's financial envelope.

"We have estimated that in the next 4-5 years quite significant investment of about $20m will be needed to keep the plant operational," Byaruhanga said.

"This is because there have been increased costs not only in operation and maintenance but also replacing old technology with new ones. The supply market is very difficult because it takes us time to order and bring the need tools."

However, the company is also facing high staff turnover. "This is a big problem for us. We invest significant time and money to train and re-tool our staff but before we start enjoying the returns they are snatched away from us," Mngeni pointed out.

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