Tuesday, July 14, 2015


In 1996 on my first trip to South Africa I couldn’t help but marvel at the constancy of their power supply.

Around that time power company Uganda Electricity Board (UEB) had started on their daily load shedding program, where on alternate days power was cut during the day and subsequent alternate days power was cut at night.

I asked our hosts whether they had load shedding in South Africa. They looked at me quizzically, they were not familiar with the term and what did I mean.

Almost two decades down the road the tables have been turned. South Africa thanks to state controlled power company, Eskom, is suffering the kind of loadshedding we bore in the 1990s.
It is particularly bad for South Africa because mining is a big part of their economy so the economy is feeling the pain more than we did.

Two events in recent times have also reminded me how far the power sector has come.

Last week National Social Security Fund (NSSF) received a sh4.5b cheque from power distributor Umeme. During the event NSSF boss Richard Byarugaba couldn’t hide his glee how good an investment Umeme had been for his members. Since the initial sale of shares in in 2013 a return of 83 percent in dividend payments and capital gains had been recorded, basically what this means that in a year or two, Umeme would have doubled the sh100b it had invested in the company.

"It is an amazing turn around for a company, Umeme, which barely a decade ago was being lampooned for a daily loadshedding problem that was more a problem of inadequate power generation...

The second event is the initiative to distribute 300,000 energy saving bulbs. The $1.4m (sh4.9b) project will see a million bulbs distributed countrywide.  The project is aiming for the rather ambitious goal of lowering power consumption by 85 percent.

But this is the second such program. A few years ago about 800,000 energy saving bulbs were distributed whose net effect was to cause a 30 megawatt power saving during peak hours.
So from anecdotal evidence the program works, but it also points to a philosophical shift to our power sector.

Now we are not only keen to generate more and more power, which is good offense, we are also pushing very hard to save power, which is good defence.

I have one other suggestion. Let us double power tarrifs to residential consumers or at least raise them significantly and the saved power passed on to industrialists.

Recent debates that the high cost of power was making our manufacturers uncompetitive are justified but the suggestion to force the generators to bring down their tariffs were not.

The raising of tariffs for residential consumers and shifting the savings to the manufacturers could help reduce their tarrif, making them more competitive

We have raised tariffs before. Before we broke up UEB into is component parts and liberalised the sector, tarrifs were a fraction of what they are now. Government had to raise tarrifs quite rapidly to a point where it would make sense to invest in the sector hence the increasing investment in the sector today.

An increase in tariffs would also lead to greater savings in power consumed as we become more conscientious in our power consuming habits.

A demand curve of our power consumption shows that we use power most early in the morning before we leave for work and late at night just before we go to sleep. When the manufacturers are on during the day is when we consume the least power.

"The consumption graph is a useful illustration about a lot of what is wrong with our economy – we consume more than we produce...

The progress in the power sector is yet more evidence of what happens when good sense triumphs over populist rhetoric. If some MPs like Ken Lukyamuzi had had their way would still be enjoying rock bottom tariffs on our one hour a day power supply.

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