8 February 2013

Uganda: Micro Dams to the Rescue

Smaller dams being seen as an alternative but high cost per MW is a major impediment

On Jan. 25 President Yoweri Museveni launched a new $30m power dam on River Wambabya in Buseruka subcounty in Hoima District, which will provide power to over 1,000 households and small businesses in Hoima and Masindi Districts.

A few days to the launch, Simon D'ujanga, the state minister for energy, had launched plans to construct ten new mini-hydro-power plants projected to generate about 15MW and light up over 35, 000 homes. These projects will be supported by a grant from the Netherlands.

These dams, according to D'ujanga, are intended to support production especially of small and medium factories like timber processing, packaging plants, agro processing, printing firms, and larger factories. They are also seen as an impetus teco higher levels of employment for the local population more especially the youth, better health services and education. They also reduce pressure on the national grid and support economic activity in rural areas on top of improving the standard of living for those rural communities.

A few projects similar to the one in Buseruka have been launched in the last two years while others are in the pipeline. They include; the 26 MW Muzizi power station, which will be completed in 2018, the 5MW Nyagak II power station expected to launch in 2015, the 4.3MW Nyagak III (2018), the 16MW Kikagati power station (2016) among others. However, work on these projects has stalled.

D'ujanga told The Independent that the reason some of these projects have stalled is lack of funds and "not any other big issue."

The 2007 Renewable Energy Policy for Uganda indicated that the country has the potential to generate 450MW from geothermal in the southern shores of Lake Albert, 1,650MW from biomass, 200MW from mini-hydro dams, 2, 000MW from large hydro dams and 200MW from solar.

Wind energy also has potential especially along lake shores, hills and the northern flatter parts of Uganda that experience high wind speeds that can operate wind turbines.

However, Godfrey Werikhe, the manager for project development and management at the Rural Electrification Agency, says Uganda's strength currently is in hydro-generated power as compared to other sources of energy.

"Most Ugandans use other sources say solar for just lighting," he said, adding that in the future when demand goes up and people opt for energy-consuming objects in their day-to-day activities, then tangible efforts would be best put on other sources of energy.

Uganda currently has a supply capacity of 850MW against a demand of 500MW, hence a surplus of 350MW, according to D'Ujanga. He said government is in five years time targeting a generation capacity of 2,000MW because demand is growing at a fast rate. Currently, hydropower accounts for 80% of the installed electricity generation capacity (850MW).

"So we are running a very aggressive programme on several rivers across the country to achieve this," he said, adding that smaller dams are easier to accomplish since they require less capital and time.

However, Dickens Kamugisha, the chief executive officer of Africa Institute for Energy Governance (AFIEGO), says costly plants were making hydropower too expensive for ordinary Ugandans.

"There is a need to make hydropower affordable to the majority of Ugandans," he said adding that only then will the sector be taken as an engine for socio-economic transformation.

He suggested that the government should install solar power facilities in public offices to provide lighting so that hydro-power is saved for the heavy industries.

He disagreed with D'Ujanga's view that Uganda has "surplus power."

"Power is very expensive and its demand is low that is why we have the surplus," he said, adding surplus may even not be there considering the rampant load-shedding in most parts of the country.

Indeed, the cost of power plants is prohibitive in Uganda. For example, the 18MW Mpanga power plant was constructed at a cost of $1.5m per MW, Bujagali cost $4m per MW while Buseruka cost $1.5m per MW. This cost is higher compared to that in other countries, according to Werikhe.

To bridge the funding gap, the government is partnering with the private sector on these projects; partly because the government wants to save resources to fund other needy sectors. An agreement is then reached on a period for the company to recoup their investment over an agreed period say 30 years; then the government takes over ownership of the power facilities.

Currently, the government almost relies entirely on the recently launched $900m Bujagali plant-with a generation capacity of 250MW, the 200MW Kiira Power Station and the 180MW Nalubaale Power Stations to generate power.

The other larger power projects, whose construction should have been underway by now, are yet to kick off. These include; the 600MW Karuma dam, which was expected to be ready in 2017 and the 600 MW Isimba power dam, which was due to be commissioned in 2015 among others.

For Karuma whose construction "was supposed to start yesterday," according to D'ujanga, the procurement process has been hit with confusion with the Inspector General of Government halting the process because of complaints from some of the bidders.

Indeed, Werikhe admitted that the tendering process is a key challenge in the energy sector.

Apart from hydro power, the government is looking at other alternative sources of energy say thermal, geo-thermal, solar, wind arguing that hydro alone may not be sustainable in the long term. Kabale Energy Ltd, a local company, is doing a feasibility study in Kabale for a 30 MW plant using peat, which is formed from partially decayed vegetation that forms in wetlands.

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