26 June 2019

Rwanda Looks to Narrow Energy Supply-Demand Gap

The Government is seeking to drive up demand for energy in the country to match generation capacity.

Currently, Rwanda generates 221MW and it targets 512MW by 2024.

However, growth in supply is projected to outstrip demand, which is currently estimated at 140MW, according to Rwanda Energy Group.

With government purchasing energy from private sector operators, a surplus would potentially result into a loss for the utility company.

Rwanda is betting on the involvement of the private sector in energy generation to meet targets of universal access by 2024.

Currently, the private sector contributes about 49 per cent of the total generated capacity and this is projected to grow to 70 per cent by 2024, according to the Ministry of Infrastructure.

Robert Nyamvumba, the Energy Division Manager at the Ministry of Infrastructure, said that the Government was working on stimulating the demand for energy by increasing transmission network, upgrading substations, and increased grid network.

He said that they had embarked on increasing grid network to rural areas, special economic zones across various cities and ensuring a steady supply.

Currently, access to electricity is estimated at 52 per cent and is expected to grow further.

"First, you need to have power to attract industries where they will have a guarantee that there will be sufficient power. Any light and heavy industry can be established here and can stimulate demand. We have established Kigali Special Economic Zone, and industrial parks to attract heavy and light industries," he said.

The World Bank says that there's need to increase demand for energy in order to match growth in supply.

Norah Kipwola, a Senior Energy Specialist at the World Bank, said that there is need to ensure that domestic demand is boosted to avoid a surplus and possible losses.

Among the avenues to drive up demand, she said, is considering price revision to make power more affordable to citizens and industries.

Currently, the rates are still significantly high largely due to the high cost of generation.

Rwanda's electrical energy per capita is 56 kilowatthours (kWh) per year per person while Mauritius and Botswana have about 1975 Kwha and 1680 Kwha annually, respectively. Singapore has as high as 7913 Kwha.

In recent years, Kipwola notes, the Government has made progress in reducing reliance on thermal energy and increasing generation of renewable and clean energy.

"Rwanda was among the top performers in the East Africa region in the quality of electricity services with regards to aspects such as frequency, extent, and impact of outages, and the cost of getting electricity services," she added.

The Bank noted that system losses have also declined as a result of measures undertaken by the utility to strengthen the grid and to reduce electricity theft.

However, World Bank fears that with a total of over 500MW of projects at various stages of development the supply could outweigh demand.

The projects include 120MW of peat power plants, 125MW of lake methane power plants.

Regional hydro projects being developed include the 80MW Rusumo project, currently under construction, and the 147MW Rusizi III project, which is at an early development stage.

The Bank advised on further cost reduction to increase demand across categories, including households.

Nyamvumba, however, said that an undesirable surplus was unlikely.

"Even if it happens (surplus), it's within a reserve margin of 15 per cent to allow growth of demand," he said.

Rwanda buys energy from local generators at not more than 10 cents per kilowatt.

Rwanda

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