The Government of Rwanda is set to save at least an estimated Rwf 20 to 24 billion annually after switching off diesel power plants.
In an interview on October 8, infrastructure minister Jimmy Gasore said the country decommissioned all its diesel power plants in June this year as it welcomed its newly launched hydroelectricity and methane gas power plants.
The new power plants in question are Rusumo Hydro Project and Shema Power Lake Kivu Ltd. The Rusumo Hydro Project is a joint scheme shared by Rwanda, Burundi, and Tanzania. Upon full operation, it is expected to generate 80MW, with each country getting 26.6MW. Shema Power Lake Kivu Ltd is a methane gas power generation plant that aims at generating 56MW.
According to the 2022 Auditor General's report, diesel power plants were the most expensive electricity generation mechanisms, producing power at a cost of Rwf 375.5 per Kilowatt hour (kWh), as opposed to hydro-electricity which costs about Rwf 136.9 per kWh.
The report looked at three diesel power plants in Rwanda, showing that they consumed a total of Rwf 38.8 billion to generate 103,416,460 kWh during 2022.
This means that the cost to obtain power from such power plants constituted 31 per cent of the total production costs incurred by the country, yet they only provided 14 per cent of the total energy mix.
"This ultimately resulted into production of expensive power," the report noted.
For context, if the 103,416,460 kWh were rather produced by a hydro power plant, they would have cost Rwf 14.1 billion. Here, the country would have saved more than Rwf 24.6 billion.
If they were produced by a methane gas power plant, they would have cost Rwf 17.9 billion. This means the government would have saved more than Rwf 20 billion per year.
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The diesel thermal power plants operations have been very expensive, and are said to have played a role in increasing the retail electricity tariffs.
In an earlier interview, the Managing Director of the Energy Development Corporation Limited (EDCL), Felix Gakuba, told The New Times that diesel-run power plants were expensive to run due to fuel consumption, and noted that once the Rusumo Hydro Project starts to work, such plants would be stopped.
With such developments in place, the government hopes to lower electricity prices "soon". Gasore encouraged people to use electric vehicles, because "there is enough electricity" in the country because we are "not importing it from Saudi Arabia or Russia," as we do with petroleum products.
Some of Rwanda's diesel power plants were located in Jabana, Gasabo District in Kigali, and Gikondo, Kicukiro District.
