In 1996 I made my first trip to South Africa. We got there in the dead of the night, but you wouldn’t know it. The highway from the airport was so well lit you could drive without your headlamps on.
At the time Uganda was beginning major loadshedding. We would
have power on in 12 hour alternating intervals – power would be on in the day
today, off at night, tomorrow off in the day and on at night.
I asked our South African hosts whether they ever had
loadshedding and they went, “What is that?”
Today they are the ones suffering massive power outages and
we go crazy when it goes off for 30 minutes. They failed those years ago to
plan for the growth of their economy and the subsequent jump in demand that
would swallow their surplus supply.
As it is now we have a installed generation capacity of
about 1,252 MW against a peak demand of 750 MW. This surplus will bumped up
even further when Karuma’s 600 MW comes on line later this year.
"While we may be forgiven for taking a break from trying to
build new power dams given the bloodiness of the fights that it took to build
Isimba and Karuma dams, industry experts estimate that by 2027 if we don’t
start building new power generation units now, we will be back to the
loadshedding years of yesterday and who knows it may be South Africa’s time to ask
again, “What is that?”...
Also given that on average it takes about seven years to
commission a power project in this country, we are behind schedule to beat the
2027 deadline.
Government keeps moaning that it has got bad deals in the
generation and distribution concessions it signed with private providers, but
everybody who was around knows we were in a desperate situation at the time
with little to no bargaining power. To do nothing now means in a few years we
will be signing other “bad” deals because a crisis will be upon us.
For starters there has to be more integrated planning. The
left hand needs to know what the right hand is doing. Recently it was reported
that a 40MW hydro power dam at Achwa is ready for commissioning there are no
transmission lines in place to evacuate the power. As a result government is
paying a few billions a month to the owners for power we are not consuming
because the promoters of project cannot be blamed for government
inefficiencies.
It seems the logical thing to do, when you start building a
dam you have to ensure there is demand down the line, that you have the
distribution network to feed this demand and you have the infrastructure to get
the power from the dam to the distributor. To that all the players up and down
the line have to be in the know of what is happening. In Uganda clearly not.
It was the same complaint with Karuma where the dam
construction was ahead of the process of getting transmission lines to them. Is
it possible that the multi-year development of the billion dollar 600 MW Karuma
dam was kept secret from Uganda Electricity Transmission Company Ltd (UETCL)?
It was heartening to see that Uganda Electricity Generation
company Ltd (UEGCL) showed a healthy profit last year – all of sh92b. This has
been helped by the takeover of Isimba dam which suggests we are developing in
house capacity to develop our own power projects.
This is important, because in our desire to lower power
costs for industrialists, who generates our power is a big determinant.
"A recent industry showed that while government power plants – Kiira and Nalubale produce about half the power we consume they account for less than 20 percent of the tariff that we pay. Common sense would dictate that government should be looking to shifting development of power plants more and more towards UEGCL as a way to shift the tariff further down...
Private investors should be encouraged but within a broader
strategy of pushing tariffs down, that recognizes this fact.
It comes as surprise then that the other day Electricity
Regulatory Authority (ERA) put out an announcement that China International
Water & Electric Corp, the contractors of Isimba are undertaking a
feasibility of building a 392MW dam at Oriang in northern Uganda.
To begin with there is too much conflict of interest in the
proposed contractor carrying out a feasibility study on the dam they want to
build. What if the site has a capacity of 700MW but the contractor can only
finance a 392 MW dam, will he tell the truth and forgo the project? Highly
unlikely.
At the bare minimum feasibility studies like these should be
done by government before the put out bids for development of these projects.
This should be UEGCL’s work. UEGCL is not only to collect
fees from independent producers, but eventually to develop projects just like
KENGEN in Kenya does, all within an industry strategic plan.
The energy ministry as the overseer of the sector needs to
pull up its socks. Just because we now have private players in the sector, does
not mean the ministry should abrogate its responsibility as the overall planner
of the sector.
