Uganda Energy Situation

Overview

Republic of Uganda
	Location Algeria.png
Capital	Kampala (0° 18′ 49″ N, 32° 34′ 52″ E)
Official language(s)	English
Government	Democratic Republic
President	Yoweri Museveni
Prime Minister	Amama Mbabazi
Total area	236,040 km2
Population	32,369,558 (2009 estimate)
GDP (nominal)	$17.703 billion (2010 estimate)
GDP Per capita	$514
Currency	Ugandan shilling (UGX)
Time zone	EAT (UTC+3)
Calling code	+256

Energy Situation

Overview

The energy sector is one of the key sectors in Uganda’s economy. The country has a total energy consumption of approximately 11 million TOE (tonnes of oil equivalent) (2010). This consumption is partially met by a number of energy resources including solar power, biomass and fossil fuels. Biomass is the most important source of energy for 97% of the population, providing for 90% of the total primary energy consumption, in form of firewood, charcoal or crop residues. This dependence on biomass is one of Africa’s highest. Electricity contributes only 1.1% to the national energy balance (121,000 TOE), while oil products (mainly used for vehicles and thermal power plants) account for the remaining 8.9%.

Concerning electricity generation, Uganda has an installed capacity of 595 MW, mostly consisting of hydropower. The electrification rate in Uganda is very low with 12% at national level (1991: 5.6%; 2006: 9%; 2010: 10%) but only 5% - 6% in rural areas. Uganda currently has one of the lowest per capita electricity consumption (70 kWh/year) in the world (Africa’s average: 578 kWh per capita, World average: 2,572 kWh per capita, Germany: 7,111 kWh per capita). About 72% of total electricity supplied by the main grid is consumed by 12% of the domestic population concentrated in the Kampala metropolitan area and nearby towns of Entebbe and Jinja [1]. Approximately 1% of rural households use off-grid electrification technologies (usually diesel generators or solar photovoltaic systems).

In 2004 Uganda reformed its energy sector both politically and economically to include a new legal and regulatory framework based on which the then vertically integrated monopoly, Uganda Electricity Board, was dismantled, making way for public -private partnerships. Since then, the government has provided an enabling environment for private sector investments in generation and distribution of electricity while transmission above 33kV remains a public function through the Uganda Electricity Transmission Company Ltd (UETCL). An Electricity Regulatory Authority (ERA) was established to license and regulate operations of all electricity operators, and a Rural Electrification Agency (REA) was put in place to ensure that rural electrification, which in most cases is not commercially viable, was accelerated to achieve set targets. (Source: SE4ALL)

The energy sector provides a major contribution to the treasury resources from fuel taxes, VAT on electricity, levy on transmission bulk purchases of electricity, license fees and royalties, as well as foreign exchange earnings from power exports.
As a result, significant public investment has been injected into the sector, particularly in the area of electricity supply. Following liberalisation, the power sub-sector now attracts the largest private sector investments in the country. The sector is not only a vital input into other sectors, but also a major source of employment for Ugandans. As of 2007, total financial resources required to implement strategic interventions were about US$ 1.84 billion. It is estimated that 68% of these resources will come from direct private investment while 32% will be obtained from the public sector either through Government resources or from development partners. For the same period, the expected sector revenue is approximately US$ 2.3 billion.[3]

 

Energy demand

Electricity demand has grown at an average of 10% per annum. This has mainly resulted from a significant GDP growth of over 6% during the past two decades. This increased demand for electricity has in the past years led to heavy load shedding since the supply hasn’t increased proportionally. The following table shows the energy and electricity demand of the main consuming sectors.

Sector	Energy demand (%)	Electricity demand (%)
Residential	66.20	25.70
Commercial	14.30	14.90
Industrial	12.80	59.40
Transport	6.20	0.00
Total	100	100

(Source: Ministry of Energy and Minerals Development, Annual report 2010)

 

 Energy supply

Uganda imports energy to the tune of 1,075,356 TOE and exports up to 6,589 TOE. (Source: Ministry of Energy and Minerals Development, Energy Balance of Uganda 2010)

As mentioned above, Uganda’s main source of energy is biomass (woody and non-woody). Regarding electrical power generation, hydropower accounts for about 80% of the installed capacity of 595 MW. It should be noted that actual capacity available is less by about 100 MW due to the sinking water level in Lake Victoria. There used to be daily electricity shortages of up to 130-190 MW but these have recently decreased as a result of the commissioning of the Bujagali power station. By the time of full commissioning, scheduled for August 2012, it is hoped that the problem of electricity shortage will have been solved for at least two years.
Other sources are thermal power plants and cogeneration which are mainly accountable for the increase of total grid electricity energy supply from 1,609 GWh in 2006 to 2,456 GWh in 2010. The following table shows Uganda‘s most important power stations.

Plant/Source	Capacity (MW)
Kiira hydro power station	200
Nalubaale hydro power station	180
Bujagali hydro power station	250 (planned) 100 (current)
Jacobsen Namanve thermal power plant	50
Electro max thermal power plant	20
Kakira Sugar Works Ltd. cogeneration	20
Kinyara sugar works Ltd. cogeneration	7
Kilembe Mines Ltd. small hydro power plant	5
Bugoye small hydro power plant	13
Ishasha small hydro power plant	6.5
Mpanga small hydro power plant	18

 (Source: Ministry of Energy and Minerals Development, Annual Report 2012)

Problem Situation

Wood fuels are largely used for cooking in rural areas while charcoal provides for the cooking needs of the urban population. Due to this heavy dependence on biomass, 30% of the rural areas register a rapid depletion and overuse of forests, leading to a severe lack of biomass for daily cooking needs.

It is alarming to note that today, only 7% of Uganda’s land area is covered with forest. Most severely affected is the tropical high forest which has been reduced from about 19% to a mere 3%. Firewood scarcity is a grave constraint in Western Uganda, as well as in the rest of rural Uganda. Deforestation continues at a rate of 2.2% per year, leading to fuel wood scarcity in rural areas and an increase in price levels of charcoal and fuel wood in urban areas (about 6% per year).

Illegal cutting of trees continues to increase. About 15-20% of felled trees are used to produce charcoal, which is on demand in urban areas. Unfortunately, charcoal production is carried out under primitive conditions with an extremely low efficiency (between 8 to 12% of the original energy). At the same time, households use biomass inefficiently as the three-stone fire is still widely used for cooking. Urban and rural households are facing increasing energy costs and a lot of time is spent collecting firewood. Furthermore, the traditional use of firewood is responsible for high indoor air pollution levels, thus causing respiratory diseases that affect women and children in particular. Moreover, the two groups spend a lot of time, travelling long distances to collect fuel wood. This deprives women of valuable time to engage in income generating activities. Children also end up with no time to go to school and study [1].
95% of rural households have no access to electricity and use traditional lighting technologies. These include candles or kerosene lamps that give poor quality lighting, emit noxious fumes and present a hazard in terms of fires or burns (regarding small children especially). Furthermore, majority of social institutions (e.g. schools and health centres) in rural areas do not have access to electricity which leads to inferior health and education services in comparison to electrified institutions.

Lack of access to electricity severely constrains the economic development of rural areas of Uganda, preventing establishment of certain businesses that require electricity and forcing companies to buy diesel or petrol generators that are costly to operate and have negative environmental impacts. Furthermore, job creation is seriously constrained by lack of adequate investment for provision of rural infrastructure services, of which electricity is a key component. In addition, lack of electricity limits access to information and communication technologies (e.g. mobile phones, computers, Internet). This contributes to continued isolation of rural areas.
Household connections almost doubled to about 450,000 in 2011 (in comparison to 2005). Ironically, a substantial segment of rural businesses and households which are not connected to the main grid are willing and able to pay significant sums for electricity. Some of these have even resorted to self-provision of electricity, at a unit cost higher than it would prevail in an organized, commercial delivery system.[1]

In 2006, Uganda experienced an unprecedented electricity deficit of about 105 MW, due to prolonged drought, inadequate investment in low cost generation capacity and a relatively high load growth. This resulted in massive electricity rationing and forced the country to resort to expensive thermal generation. The government has since put in place a comprehensive plan to address energy deficits and meet the populations’ long term energy needs [2].

Energy Resources

Uganda is richly endowed with abundant energy resources which are fairly distributed throughout the country. These include hydro, biomass, solar, geothermal, peat and fossil fuels. The energy resource potential of the country includes an estimated 2000 MW of hydro power, 450 MW of geothermal, 460 million tonnes of biomass standing stock with a sustainable annual yield of 50 million tons, an average of 5.1 kWh/m2 per day of solar energy, and about 250 million TOE of peat. In addition, an unspecified amount of petroleum has been discovered in the western part of the country. [2] The overall renewable energy power generation potential is estimated to be 5,300 MW. (Source: SE4ALL)

Biomass

Biomass is the predominant energy type used in Uganda. It accounts for 90% of the total energy consumption in the country and grew by approximately 3.6% between 1995 and 2000. Key forms used are firewood, charcoal, and shrubs. Grass, farm residues and wood wastes are used in regions facing significant wood scarcity. Charcoal is mainly used in urban areas while firewood, agro-residues and wood wastes are widely used in rural areas. Whereas these resources are widely used for energy generation, most of the traditional biomass energy technologies which include wood and charcoal stoves, ovens and kilns used in Uganda are inefficient.

Firewood is used mainly with three-stone stoves in rural households for cooking and for food preparation by commercial vendors in urban areas. Less than 9% of all households use efficient wood stoves. Although some institutions like schools and hospitals still use firewood, their stoves are most often more advanced. Charcoal is mainly used in a metallic stove traditionally known as a ‘sigiri’. Use of improved charcoal stoves with a ceramic insulation lining is increasing. The conversion of firewood to charcoal uses mainly earth mounds and pits, which give an average conversion efficiency of about 10% - 15%. Efforts to train charcoal makers in efficient ways to make charcoal have had a limited impact and most of them still make it on an individual and traditional basis. Like most African countries, research, development and dissemination of efficient and modern biomass technologies are inadequate.

Biomass Potential and Distribution

Biomass supply comes from various sources, the most prominent of which are hardwood plantations  mainly eucalyptus and indigenous species, woodlands which consist of trees of 5m and above, with a canopy cover of over 40%,  bush lands  of small shrubs occurring in the open  and subsistence farmland.

The total standing biomass stock is approximately 460 million tonnes, with a sustainable biomass supply of 50.8 million tonnes. However, accessible sustainable wood biomass supply stands at 27.7 million tonnes. When crop residues are included, whose theoretical potential in Uganda is about 4.4 million tonnes, there is a national net surplus. The total amount of agricultural residue left after harvesting or processing of crops amounts to almost 11 million tonnes per year. Unfortunately, the only businesses that utilize these residues for energy production are sugar factories which use the sugarcane residue for cogeneration that is limited for own use and in some cases feeding into the national grid. A small amount of coffee and rice husks is also utilized in heat production, in cement and tiles manufacturing. Otherwise all residues are either used as a fertilizer and/or animal fodder.

In terms of overall wood biomass at national level, there is deficit of 85,000 tonnes, which can be covered by crop residues. At regional level, there is a deficit of about 3 million tonnes in both the Central and Eastern Regions, and a surplus of about 4 million tonnes in the Northern Region and of about 2 million in the Western Region.

Looking at districts, Kampala has the biggest deficit, of over 2.5 million tonnes. Other major towns like Mbarara and Mbale also have significant deficits of 400,000 and 600,000 tonnes respectively. 26 districts have a surplus in biomass, while 30 lack sufficient amounts. The wood biomass demand and supply scenario predicts that in the next ten years, the country will move from a surplus to a deficit and later, to an acute deficit. For information on challenges and issues affecting the exploitation of biomass in Uganda, click here.

Biomass Stoves: Best Practice Case Study

Against a background of high deforestation rates and firewood scarcity in Uganda, the Ministry of Energy and Mineral Development (MEMD), with the support of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, through the Energy Advisory Project (EAP) and its successor PREEEP, has partnered with NGOs and the private sector to promote improved stoves. These include the Rocket Lorena Stove, shielded fire rocket stoves for households. They also promote institutional rockets stoves and baking ovens for social institutions and SMEs. Rocket stoves for households have been modified to fit the socio-economic setting of the rural poor by using locally available materials that can be obtained cheaply. 

Hydropower

The electricity supply system in Uganda was first developed during the 1950s and 1960s with the construction of the Owen Falls Hydropower Station (later renamed Nalubale Power Station). The station has 10 generators with a total installed capacity of 150 MW. It was later refurbished and upgraded to 180 MW and a new one, Kiira, with a capacity of 200 MW was also constructed. With the liberalization of the economy and the disbanding of UEB, the electricity utility company, both Nalubale and Kiira hydro power stations are leased to Eskom (U) Ltd under a 20 year concession agreement. The two hydropower stations form the back bone of the electricity supply network in the country.
Private companies, Kilembe Mines Ltd, Tronder Power and Kasese Cobalt Co. Ltd have their own smaller hydropower plants Mubuku I (5.4 MW), Mobuku II (14 MW) and Mobuku III (10.5 MW). These stations were initially built to supply their own industrial activity, but due to the interruption in the copper and cobalt production activities, the companies entered into a contract with the Uganda Electricity Transmission Company in 2003 to sell power to the grid. Furthermore, there are other power stations namely Eco Power, (6.4 MW), and Africa Energy Management Systems, Mpanga (18 MW). Three other small hydro power stations namely Kuluva (120 kW) Kagando (60 kW) and Kisiizi (300 kW) supply electricity to isolated hospital grids. The German Agency for International Cooperation (GIZ) is in the process of developing small hydro power schemes in Bwindi (64 kW) and Suam (40 kW).

 

 

 

 

 

 

 

 

Uganda faces acute electricity supply shortage. The country’s total installed capacity is 595 MW, generated primarily from  Owen Falls Hydropower Station at Jinja in South Eastern Uganda (see Wikipedia "List of power stations in Uganda").  However, in 2009 only 140 MW (380 MW were installed at the time) could be used as a result of low water levels of Lake Victoria. The other cause of the persistent electricity supply problems is the gap between the growing demand for electricity and the new generation capacity. To alleviate this problem, the government has procured emergency thermal generators resulting in increased electricity tariff. A new hydro facility has been developed at Bujagali, and has been partially operational since February 2012. This installation will generate approximately 250 MW. Before Bujagali became operational, 150 MW thermal capacities had been added in order to bridge the gap until the beginning of 2012.

 

 

 

All big power generation plants belong to the Ugandan Electricity Generation Company Limited (UEGCL) but are operated and managed by ESKOM, Aggreko and other companies.(Two dams in Uganda are equipped with desilting gates and have proper plans for the management of upstream water and land use issues. However, there are no national plans for optimised operation of power plants under variable flow regimes). In the long term, four large hydro power stations will be constructed at Ayago North (300MW), Ayago South (200MW) and Kalagala (450MW) in 2012 – 2020 and Murchison falls (Uhuru – 300MW).

Hydro Potential and Distribution

Uganda has considerable hydro resource potential estimated to be over 2000 MW. The large-scale hydropower potential is along the White Nile which originates from Lake Victoria. The flow of the White Nile River is controlled by the Owen Falls Dam which was constructed in 1954. The water is released according to an “agreed curve” which is a relationship of the lake level and the flow representing the natural flow rate at Ripon Falls prior to the construction of the dam.
There are six potential hydropower sites along the White Nile. These are: Bujagali 250 MW, Kalagala 450 MW, Karuma (Kamdini) 150 MW, Ayago North 300 MW, Ayago South 250 MW and Murchison Falls 600 MW. Bujagali and Karuma sites have been significantly studied and the sites are being developed through on a Public Private Partnership (PPP) basis to generate electricity in the medium term (2007-2012).
The small and mini hydro sites are mainly located in the east and the western parts of the country which are hilly and mountainous. A total of 59 mini hydropower sites with a potential of about 210 MW have been identified through different studies. The level of studies is uneven with some sites having been studied to feasibility stage. Nevertheless, this gives a fair picture of the small and mini hydro potential in the country. Some of the sites can be developed for isolated grids and others as energy supply to the grid.

For information on challenges and issues affecting the exploitation of hydropower in Uganda, click here.

Solar Energy

The level of solar energy utilization in Uganda is still very low. The use of solar photovoltaic (PV) began in the early 1980s mainly driven by donor funded programmes for lighting and vaccine refrigeration in health centers. Later the Uganda Railways Cooperation, a government parastatal, installed 35kW at 29 locations for communications and signaling. The Uganda Post and Telecommunications Cooperation also installed 30kW at 35 remote telecommunication sites through out the country.

Some of the earlier initiatives included:

• PV systems installed by Uganda Rural Development and Training in Kagadi through a credit scheme supported by a Dutch organization Humanist Institute for Development Cooperation (HIVOS).
• Habitat for Humanity and Solar Electric Light Fund funded by the US Department of Energy installed 125 solar home systems to low income families in Kasese.
• Solar Energy Uganda Ltd in partnership with Solar Light Churches for Africa installed a number of PV systems. However, the efforts were uncoordinated and lacked after sales support.

In 1998-2003, the Government with funding from UNDP and GEF implemented the Uganda Photovoltaic Pilot Project for Rural Electrification which was aimed at removing barriers to the wide spread use of solar PV. The project created awareness, built the capacity of the private and arranged financing for vendors and end-users among other things. As a result, the solar PV industry has become vibrant. Although no comprehensive study has been under taken, it is estimated that over 20,000 systems are installed in the country.
In 2001, the Government put in place a Rural Electrification Strategy and Plan (RESP) which will among other things increase the use of solar PV in rural areas. The RESP has a target of 80,000 PV systems by 2012. As part of the rural electrification program, Energy for Rural Transformation (ERT), supported by the World Bank, the Private Sector Foundation is implementing sales based performance subsidy scheme and providing business development support to private PV dealers which is expected to increase PV sales. Under the same programme, the Ministries of Health, Education, and Water and the Uganda Communication Commission have procured PV systems to meet their sectors' electricity needs. The Ministry of Health procured 568 PV systems for health centers under ERT phase 1 and the Ministry of Education 458 solar systems for 129 post-primary institutions in 10 districts.
The number of solar thermal systems installed for hot water is very low, estimated to be less than 500 countrywide. There has been no major Government initiative for promoting solar water heaters in the country although in 2007, the government planned a pilot project with support from REEEP expected to install 45,000 solar water heaters by 2012.
According to the Alternative Resources Assessment and Utilisation Study, the total potential for solar water heaters is estimated at 161,000 m2 of collector. A substantial growth in the economy may lead to a much higher demand than assumed if only 10% of urban households demand hot water.

Solar Potential and Distribution

The average solar insolation is 5.1kWh/m2/day. Existing solar data clearly indicates that the solar energy resource in Uganda is high throughout the year. The data indicate a yearly variation (max month / min month) of only about maximum 20% (from 4.5 to 5.5W/m2), which is due to the location near the equator. The insolation is highest in the dryer area in the north-east and very low in the mountaineous areas in the east and south-west.

For information on challenges and issues affecting the exploitation of solar energy in Uganda, click here.

Photovoltaic (PV): Best Practice Case Study

Against the background of low electrification rates, particularly in rural areas, the Uganda Ministry of Energy and Mineral Development with financial support from UNDP and GEF implemented the Uganda Photovoltaic Pilot Project for Rural Electrification (1998-2003). The main objective of the project was to provide basic electrical services through solar PV to rural areas unlikely to have access to grid-based electricity in the foreseeable future. More information on the project can be found here.

Wind Energy

Due to its geographical location, Uganda does not seem to benefit from good wind resources with most areas having wind speeds less than 3.0 m/s. The wind data collection from the national meteorological stations was never done with the intention of monitoring wind speeds for energy utilization. It was primarily for weather forecast and aviation. The standard height for the location of measuring equipment is two metres above the ground and the sensors are often placed close to obstacles. No substantive investigation in the area of wind energy has been carried out in Uganda to characterize the wind distribution. It is possible that some sites could have enough wind speeds to generate substantial amount of electricity.

Wind Potential and Distribution

Based on wind data collected at 11 sites in three years (1989-1992) by the Department of Meteorology, Ministry of Water, Lands and Environment, the wind speeds in most areas of Uganda are moderate with average speed not exceeding 2 m/s.
In some areas with complex terrain, the wind may speed up due to slopes of hills, escarpments and tunneling effects. In the mountain areas in the south-western part towards the border with Rwanda (Kabale, Kisoro, Ntungamo) and in the area around Mt. Elgon the average wind speed goes up to about 4 m/s.
Measurement carried out under the Alternative Energy Resource Assessment and Utilisation Study at two sites for five months (June-Sept 2003) indicated that the average wind speed at Kabale and Mukono at 20m was 3.7m/s.
The study concluded that the wind energy resource in Uganda is insufficient for large scale electricity generation. However, the wind resource may be suitable for special applications, such as water pumping in remote areas and for small scale electricity generation in mountainous areas.

For information on challenges and issues affecting the exploitation of wind energy in Uganda, click here.

Geothermal 

The exploration for geothermal resources in Uganda is still at the reconnaissance and exploration stage. Reconnaissance surveys on Ugandan hot springs started in 1921 by the geological survey of Uganda and the first results were published by Wayland (1935). In 1973, as a result of the oil crisis, an attempt was made to initiate a geothermal project with United Nations support, but this did not materialise due to the political turmoil in the country.

Geothermal energy resources in Uganda are estimated at 450 MW. Exploration for geothermal energy has been in progress since 1993. So far three potential areas all situated in western Uganda, in the western branch of the East African Rift Valley have been identified for detailed exploration. The three potential areas are Katwe-Kikorongo, Buranga and Kibiro. Based on recent assessments, they have all been ranked as potential targets for geothermal development. The current study results indicate that the temperature level varies between 150 C° and 200 C° which is sufficient for electricity generation and for direct use in industry and agriculture. The rest of the geothermal areas of Uganda are at a preliminary level of investigation and results will soon be available that will be a basis for their prioritisation for detailed surface exploration. Further information on the current status can be found in this publication here.

Fossil Fuels

As of 2007, consumption of petroleum in Uganda stands at 800,000 m³ per annum growing at about 6% per annum since 1997. The petroleum import bill stands at US$ 250 million per year. This constitutes about 8% of total national imports and represents slightly above 20% of total export earnings.

Uganda imports all its petroleum products requirements from overseas since there is no local production yet. About 90% of Uganda’s petroleum imports are routed through Kenya with only 10% coming through Tanzania.

For more information on the fossil fuels resources in Uganda, click here.

Electricity Transmission and Distribution

Transmission

The Uganda Electricity Transmission Company Ltd. (UETCL) is the bulk supplier and single buyer of power for the national grid in Uganda. It is the purchaser of all independently generated power in the Country and it also imports electricity from neighbouring countries. UETCL is also responsible for publishing standardized tariffs for renewable energy generation of up to 20 MW capacity based on the avoided cost principle.The length of domestic transmission and distribution lines is14312 km.

Distribution

The biggest company empowered to trade and supply electricity at 33kV and below is Umeme Ltd, leased the assets of the formerly government owned distribution company (Uganda Electricity Distribution Company Ltd). There are some mini-grid distribution systems and one off-grid generation and distribution company (West Nile Rural Electrification Company Ltd).

Policy Framework

Energy Policy and Poverty Reduction Strategy

The goal of the policy is to meet the energy needs of the Ugandan population for social and economic development in an environmentally sustainable manner.

The energy policy seeks to meet the following broad objectives:

1. To establish the availability, potential and demand of the various energy resources in the country

To meet this objective the Government shall:

• Prepare a database on all the available energy resources and energy consumption patterns in order to have a long term perspective of the options for demand/supply matching; and package information on potential projects for investment.
• Build the necessary local capacity to acquire the required data and assess and evaluate the resources.

2. To increase access to modern affordable and reliable energy services as a contribution to poverty eradication

 To achieve this objective the Government shall:

• Attract private capital and management in the energy sector; promote competition between energy service providers; promote the development of markets in energy technologies and services.

• Put in place a conducive environment to accelerate rural energy supply and access by:

1. Applying subsidies exclusively on capital investment;
2. Applying light-handed regulation to facilitate investment in rural energy projects
3. Having differentiated tariffs for different areas or projects to reflect investment and supply costs;
4. Exploring schemes to assist consumers to purchase appliances, thereby increasing the speed at which the load of new consumers matures; and
5. Formulation of guidelines on organising rural communities to enable them access better provision of energy services

• Intensify provision of consumer information, education and technical advice in the use and conservation of energy.

• Work with financial institutions to establish sustainable financing mechanisms for energy programmes.

3. To improve energy governance and administration in order for the energy sector to operate efficiently and play its role in the socio-economic development of the country.

To achieve the above objective government shall:

• Clarify the roles and functions of the various institutions involved in the energy sector increasing the role of the private sector and other NGO’s and communities;
• Create a transparent legal and regulatory framework for the sector;
• build capacity at the national and local levels for better formulation and implementation of energy policies and programmes;
• Build the capacity of regulatory agencies to provide even handed and predictable regulation;
• Develop incentives to retain local human resource for the energy sector; and
• Involve all stakeholders in the formulation of new policies in the energy sector

4. To stimulate economic development by ensuring that energy plays a central role in the economic development of the country and in the region.

To achieve the above objective government will adopt the following strategies:

• Encourage competition within the energy markets to achieve efficiency.
• Attract investments in energy services provision by providing appropriate incentives.
• Ensure energy supply security and reliability.
• Promote energy trade within the region.

5. To manage energy-related environmental impacts

Government will ensure that environmental considerations are given priority by energy suppliers and users to protect the environment and put in place a monitoring mechanism to evaluate compliance with established environmental protection guidelines.

To meet the above objective, Government shall:

• Promote the use of alternative sources of energy and technologies which are environmentally friendly;
• Sensitise energy suppliers and users about the environmental issues associated with energy;
• Work towards the establishment and acceptance of broad targets for the reduction of energy-related emissions that are harmful to the environment and energy users;
• Promote efficient utilisation of energy resources; and strengthen the environment-monitoring unit in the energy sector

Energy is an integral part of the Ugandan Government’s Poverty Eradication Action Plan (PEAP) which includes frequent references to thelink between energy and poverty alleviation. The Ugandan Government has set the target of providing 10% of rural population with access to electricity until 2012. This target has been specified in the Rural Electrification Strategy and Plan as well as in the PEAP. It is planned to be achieved by grid extension (including through private sector involvement), mini-grids and stand-alone electrification systems. Furthermore, the government has stated its commitment to increase the use of renewable energy from 4% today to 61% in 2017 as outlined in the Renewable Energy Policy (March 2007).

In April 2010, the Government of Uganda launched the National Development Plan (NDP), which covers a number of energy issues. One of the objectives of this plan are increased access and consumption of electricity for growth, employment and socio-economic transformation. Limitations of the forestry sector and their impacts on the country's development are elaborated as well as challenges of the power sector. In consequence, the NDP highlights the following strategies to overcome the barriers of the energy sector towards achievement its goals: Increase power generation capacity to reach 780-820 MW, mainly through large and small hydro; increase rural electrification from 6 % to 10 % by, among others, subsidization of mini-grids; promotion of energy efficiency, reduction of power losses from 40 % to 16 %; revision of existing policies in the energy sector and promotion of renewable energies, esp. biomass and solar. 

In addition to the technical and financial assistance from Germany Uganda’s energy sector is supported by the World Bank, Norway, ADB and to a lesser extent by Japan, Denmark and the European Community.

The World Bank has provided loans for three major projects in the area of energy supply: the Energy for Rural Transformation (ERT) for USD 84 million (up to 2012); the Uganda Power Sector Development Project for USD 300 million (up to 2011) and the Private Power Generation Project (Bujagali) for USD 115 million (up to 2017). The main objective of the Private Power Generation project is to provide least-cost power generation capacity that will eliminate power shortages at the time of its commissioning. The Power Sector Development Operation Project is to reduce short-term power shortages and financial imbalances, and facilitate orderly longer-term expansion of electricity service. This also comprises a set of investments and policy measures designed to reduce the supply-demand gap until the Bujagali hydropower plant comes into service in 2011 as well as financial support for the Government to absorb a part of the higher oil prices.

Institutional Set Up and Actors in the Energy Sector

Public Institutions

There are three main governmental institutions dealing with renewable energies for power generation:

• The Ministry of Energy and Mineral Development (MEMD) is the lead agency in the energy sector. The Ministry is responsible for policy formulation, promotion, coordination, monitoring and evaluation. MEMD is also responsible for initiating legislation in the energy sector. Ugandas National Energy Policy is so far centralized, i.e. there are no energy officers at sub-national/district level. Part of the MEMD is the Energy Department (ED), which is structured according to sectors. ED comprises four divisions “Energy Efficiency”, “Innovative and Renewable Energies”, “Electricity” and “Provision with Oil Products”.
• Rural Electrification Agency (REA) functions as the secretariat to the Rural Electrification Board, which realizes MEMD`s rural electrification plans as stipulated in the Indicative Rural Electrification Master Plan. REA controls public funds as for the subsidization of rural electrification projects.
• Electricity Regulatory Authority (ERA), which was established by the Electricity Act of 1999, is in charge to issue licences for the generation, transmission, distribution or sales of electricity. ERA has also the mandate to establish a tariff structure and investigate tariff charges and approve the rates of charges. A copy of the latest tarriffs can be found here.

Projects Implementing NGOs

Energy is generally a side topic for most Ugandan NGOs. However, there are several NGOs with certain experiences in the field of the introduction of improved stoves.

Commercial Service Provider

In the field of photovoltaic systems about 25 providers work in Uganda. The Solar companies in general have difficulties to develop markets in rural areas and focus their interest on urban areas.

In the field of stoves there are numerous workshops and craftsmen producing stoves especially for the urban market. Part of these workshops and craftsmen were trained by the EnDev-Uganda programme.

Non governmental service providers for rural areas in the field of energy

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Key Problems Hampering Access to Modern Energy Services in Rural Areas

Obstacles for Grid Based Rural Electrification

The Government of Uganda has limited resources for extending the grid to rural areas.  At the moment, the Government’s focus is on solving the power supply crisis that is crippling the national economy. Based on an improved power generation it will concentrate its efforts to extend the grid to major urban and periurban areas.

Tariff rates for customers differ according to the category of client. They reflect the cost of electricity supply to that category. Implementation of this principle eliminates cross-subsidization of any category of customers by other categories. As a result, the tariff for domestic consumers is relatively high with 0,17 € per kWh (426 U. Shs). This tariff is often higher than the tariff for industrial consumers because domestic consumers who take supply at the low voltage impose higher investment and operational costs on the system than industrial consumers who are supplied at the high voltage or medium voltage.

For Umeme ltd. it is generally profitable to extend the grid. However, poor households cannot afford the connection fee and the electricity costs. In addition, collection costs are high in areas with dispersed population and low numbers of clients. Prepaid meters are not common in Uganda.

Beside Uneme, private companies invest only in exceptional cases in minigrids. Normally, costs of providing access are too high due to remoteness of the sites, dispersed populations and difficulty of the terrain. Local communities don’t dispose of sufficient proper financial resources to make infrastructure investments in their community.

Obstacles for Off Grid Energy Technologies and Services

There is strong political motivation to improve access to electricity of rural populations, particularly those remote from the grid. However, in the case of SHS both the affordability and the availability were seen as major problems for the dissemination of the solar systems in rural areas. In the case of hydropower, the investment costs are generally not affordable for rural communities and investors. In addition, there is a lack of management skills to operate MHPPs.

Generally, the availability of micro-finance schemes for energy technologies in rural areas is limited. Large parts of the country have almost no access to institutional micro-finance services and must rely largely on moneylenders, suppliers, family and friends for short term seasonal loans. There are no secure liquid savings options available to these households, which would enable them to build assets over time. Existing micro-finance institutions often have a narrow credit product line, limited experience in rural markets and a lack of access to best practice information and technical tools. In addition marketing and maintenance structure for energy technology devices in rural areas are weak. Almost all retailers are established in the big cities with no outlets in rural communities. Thus, clients have to travel to cities to purchase energy devices and for repair orders, which is difficult for most rural families. Establish rural outlets are considered not to be profitable due to the high costs for transportation and mobilization, the dispersed nature of the populations and the low income and low demand of the local population.

Links to Further Reading

• Centre for Research in Energy and Energy Conservation (n.d.). Northern Uganda Energy Situation.
• Ministry of Energy and Mineral Development 2002, The Energy Policy for Uganda, Kampala, September 2002
• Ministry of Energy and Mineral Development 2001, Rural Electrification Strategy and Plan.
• Kamfor Company Ltd 2006, Report on the Renewable Energy Resource Information Development and Capacity Building Assessment In Uganda, Ministry of Energy and Mineral Development, Kampala, January 2007.
• Ministry of Water, Lands and Environment 2002, The National Forest Plan, October 2002
• Kennedy & Donkin Power Limited 1996, The UEB Hydropower Development Master Plan – Part 1, Volume 2 Main Report, Kampala November 1997.
• Kennedy & Donkin Power Limited 1996, The UEB Hydropower Development Master Plan – part 1, Volume 7, Hydrology and Hydropower Potential of Non-Nile Rivers, July 1996  .
• Sweco International 2001, Evaluation of Hydropower Potential Sites in Uganda with Capacity in Range of 0.5 – 50 MW, Kampala, March 2001.
• Electrowatt-Ekono Oy – Norplan AS, COWI A/S 2003. The Uganda Alternative Energy Resources Assessment and Utilisation Study, Kampala, June 2003.
• Electrowatt-Ekono Oy, NORPLAN A.S and COWI A/S (2004): The Uganda Alternative Energy Resources Assessment and Utilization Study AERDP Main Report Phase 1, Kampala, February 2004
• Ministry of Energy and Mineral Development 2006, Plan for Meeting Uganda’s Electricity Supply Needs In The Short, Medium And Long Term, Kampala June 2006.
• United Nations Development Programme (1998), Uganda Photovoltaic Pilot Project for Rural Electrification, Project Document, Kampala 1998.
• B. Banks and G. Kihuguru (2006), Uganda Photovoltaic Pilot Project for Rural Electrification UGA/97/G32 Ex-Post Evaluation Report, UNDP, Kampala, May 2006.
• Pallabazzer, R.: The Wind resources in Uganda. Renewable Energy, Vol 13, no 1, pp 41-49, 1998.

References

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