Uganda: Energy Resources
|Energy Consumption||0.04 Quadrillion Btu|
|2-letter ISO code||UG|
|3-letter ISO code||UGA|
|Numeric ISO code||800|
|UN Region||Eastern Africa|
|CIA World Factbook, Appendix D|
|Wind Potential||0||Area(km²) Class 3-7 Wind at 50m||200||1990||NREL|
|Coal Reserves||Unavailable||Million Short Tons||N/A||2008||EIA|
|Natural Gas Reserves||0||Cubic Meters (cu m)||124||2010||CIA World Factbook|
|Oil Reserves||0||Barrels (bbl)||110||2010||CIA World Factbook|
Energy Maps featuring Uganda
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Policy and Regulatory Overview 
The level of electrification is very low, and in 2009, only about 9% of the population had access to the electricity grid. In rural areas, where more than 85% of the population lives, roughly 1% of the households are connected to the grid, while the remainder generate electricity from household diesel generators, batteries and solar photovoltaic systems (PV). Due to the lack of grid development, a number of companies generate their own electricity, including Kilembe Mines and Kasese Cobalt Ltd. As of 2010, the transmission network of the country consisted of 1,161.6 km of 132 kV lines, with the distribution network operating at 33 kV.
Energy planning is guided by the Rural Electrification Strategy and Plan covering the period 2001 to 2011/12. The objectives of the plan are to achieve equitable regional distribution of energy, maximise the economic, social and environmental benefits of rural electrification subsidies, promote expansion of the grid and development of off-grid electrification, and stimulate innovation within electricity suppliers. Specific objectives of the plan over the previous 2010 plan are to increase the financial resource base available for rural electrification by US$ 40 million per annum, as well as increasing new grid connections by 40,000-50,000 per annum.Energy for Rural Transformation APL-2 (GEF)At a cost of US$ 93 million, the objective of the Second Energy for Rural Transformation (ERT II) Project is to increase access to energy and Information and Communication Technologies (ICTs) in rural Uganda.Uganda Power Sector Development ProjectIn 2007, the World Bank approved funding for the Power Sector Development Operation Project at a cost of US$ 304 million. Its primary objectives are to reduce short-term power shortages and financial imbalances, and facilitate longer-term expansion of electricity service.GTZ Promotion of Renewable Energy and Energy Efficiency Programme (GTZ PREEEP) The overall objective is to improve access to modern energy services through renewable energies and to promote energy efficiency in various sub-sectors.National Development Plan 2010-2014/15The current NDP sets forth a number of development objectives for the energy sector, in terms of generation facility construction, transmission network extension, the promotion of energy efficiency in the supply side, the strengthening of the institutional and regulatory framework for energy, and the promotion of renewable and atomic energies. Specific areas of action within the Plan include the construction/study and design of the Bujagali, Karuma, Ayago and Arianga large hydropower projects, with a potential capacity of 2,050 MW; the construction of 150 MW of small-hydro capacity, the expansion of the transmission grid to 2,750 km with support for 220 kV and 400 kV operation, the reduction of commercial and technical power losses to 16%, and strengthening of the institutional and human capacity of the energy sector.
Strengthening the inter-connection of the Kenyan and Ugandan power grids, as well as establishing new grid connections with Rwanda, has been planned in the past. Substantial allocations have been made in the 2010/2011 budget for improvements to the energy infrastructure. Excessive water release into Lake Victoria due to the operation of the Owen Falls hydroelectric facilities has led to a need to reduce flow through the facilities, to preserve the water levels in the lake. This will translate to a loss of roughly 40 MW of capacity from the facilities. To counteract this, a number of developments are being made, including the early commissioning of 100 MW of the Bujagali hydroelectric dam, and the construction of the $2.2 billion Karuma hydropower dam on River Nile in northern Uganda, one of the east African region's biggest power projects, is expected to commence early next year. The government has said it intends to develop the 700 MW project as a public-private partnership venture, and allocated 828 billion shillings for it in 2011/2012 budget.
Total installed electricity capacity (2010, UETCL): 539.5 MWThermal: 31.5%Hydroelectric: 65.4%Biomass (bagasse): 3.1%Total primary energy supply (2010): 11,080 ktoeBiomass: 92%Petroleum Products: 6%Electricity Imports: 2%Low-grade forms of energy, especially traditional biomass fuels, account for more than 90% of total energy consumption. Other renewable sources of energy contribute negligibly to the national energy balance. Total electricity generation in the country in 2008 was 2,058 GWh, 71.3% of which came from renewable energy sources, predominantly the hydropower installations at Owen Falls. Two bagasse plants have recently opened at sugar production facilities, at Kakira and Kinyara.
The ERA is responsible for:- Issuing licenses for electricity generation, transmission, distribution, supply, import and export,- Reviewing and approving tariffs,- Establishing and enforcing sector standards,- Advising minister on matters affecting the electricity sector.
After unbundling, the government proceeded with the process of privatisation. The generation concession license was competed for and won by Eskom (http://www.eskom.co.za) Ltd, which took over in April 2003. Umeme Ltd (http://www.umeme.co.ug) won the distribution concession, and took over in March 2005. UETCL is the System Operator, 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 that is fed into the national grid.Under the contractual fiscal regime currently operated in the oil and gas sectors, the ownership of the petroleum resource remains with the Government, and the international oil and gas companies are simply contracted as well as licensed by the Government to extract and develop the resource on the Government's behalf, under a production sharing agreement (PSA).
The Promotion of Renewable Energy and Energy Efficiency Programme (PREEEP) is a key project by the Ministry of Energy and Mines in collaboration with the German Development Cooperation (GTZ), now the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), to promote energy efficiency and renewable energy. The government is also promoting the use of energy saving bulbs by distributing approximately 800,000 of them to low-income households. The Energy Advisory Project, also funded through the GTZ, aims to provide energy users with information about energy efficiency, as well as promote the use of efficient equipment and appliances in manufacturing and at home, and assess the benefits that improved efficiency could have on the transport and agricultural sectors, particularly in terms of maintenance of fleet vehicles and auditing of agricultural businesses. Efficiency standards-setting is another goal of the project. The Energy Advisory Project goals have recently been incorporated into the PREEEP, and as such continue to be pursued.The government, under the recently-implemented Renewable Energy and Energy Efficiency Policy, acknowledges a number of key areas where energy efficiency could be improved, by the policy’s goal date of 2017. These include increasing solar water heater installations to 30,000 m2, and implementing industrial energy auditing and the dissemination of efficient equipment to industries.
Uganda’s electricity supply depends mainly on hydropower from the Nile. Due to this dependence, the country is facing severe climate change-related risks. Recent persistent droughts have reduced hydropower production from 340 to 140 MW. According to the ERA, the country’s regulator, actual power generation stands at around 400 MW, from an installed capacity of approximately 550 MW. Power shortages have been compensated by installing numerous off-grid systems, and recently a 150 MW grid thermal power system, at the exceptionally high cost of 0.27 US$/ kWh. Commercial losses are at roughly 35% due to poorly-maintained lines. The highly-centralised nature of the country’s electricity infrastructure, and the continuing high costs of investment in the large-scale power sector for low population outreach, are hampering further development.There is a need to broaden and diversify power production in Uganda, and to design systems that will provide power to local communities. Renewable energy could be a sustainable option for a land-locked country with the 6th highest fuel import costs in the world.
Other key actors include:National Environment Management Authority (NEMA, http://www.nemaug.org/),Directorate of Water Resources Development,Private Sector Foundation Uganda,Uganda Investment Authority,Uganda Manufacturer’s Association,Uganda Renewable Energy Association,Uganda Small Scale Industries Association,Other Government Ministries, including District Local Governments.
Electricity market The electricity sector was unbundled in 2001 and the responsibilities, previously solely carried out by Uganda Electricity Board (UEB), transferred to various companies :Uganda Electricity Generation Company Ltd (UEGCL): responsible for the majority of all generation in the country at two stations: the Nalubaale and Kiira Power Stations. The business (and notably, not the assets) was privatised on concession terms for up to 20 years. Private participants in the generation sector include sugar processing and mining companies, as well as by endogenous firms such as Tronder Power Limited and South Asia Energy Management Systems Ltd. Uganda Electricity Transmission Company Ltd (UETCL, www.uetcl.com): The UETCL is responsible for power transmission at 132kV and above including exports to Kenya and Tanzania, and is to buy most of the power from power generators. It is to remain a government utility body for some time. Uganda Electricity Distribution Company Ltd (UEDCL, http://www.uedcl.co.ug/): The UEDCL exists mainly to distribute and sell power to end users.Oil and gas marketInvestigation of Uganda’s oil resource has led to a number of companies expressing interest for exploration licenses. Companies currently licensed to carry out oil exploration in Uganda include: Heritage Oil and Gas Ltd., in partnership with Energy Africa (now Tullow oil), licensed on the 1st July 2004, and expected to carry out exploration activities in the Packwach basin; andHardman Petroleum Africa (pty) Ltd., in partnership with Energy Africa Ltd (now Tullow Oil), licensed on the 8th October 2001 to explore the the Northern Lake Albert basin. The southern Lake Albert basin was first licensed to Heritage Oil, but was later jointly licensed to Tullow and Heritage on the 8th September 2004.The Rhino camp basin was licensed to Neptune Petroleum (u) Ltd., on 27th September 2005.The downstream sector of the country was liberalized in 1994, with price controls and centralised resource allocation being abolished. Several companies are licensed to store and distribute petroleum products, with the major sector actors being international companies such as Shell and Caltex. The Government also maintains a strategic fuel reserve at Jinja.
Degree of independence
The Authority members are appointed by the Minister responsible for energy on approval of cabinet for a period of five years with a possibility for one renewal. The current Authority members were appointed in 2010. The ERA is financed through the Ministry of the Treasury, by fees prescribed by the Authority on licensing, and a levy not exceeding 0.3% on the revenue generated from the sale of electrical energy. The Electricity Act stipulates that, subject to the declared policy of the Government, the Authority is independent in the performance of its functions and duties, and shall not be subject to the direction of any person or authority.
Technical Assistance for Renewable Energy Resource Information and Capacity Building Assessment was a project recently undertaken by KAMFOR Company Ltd.A recent study, conducted in conjunction with the ERA, has confirmed that electricity generation through wind is feasible, especially in small industries and in rural areas. Further studies are being carried out countrywide to generate further potential geothermal sites.Uganda was included in the 2005 Energy, Environment and Development Network for Africa (AFREPREN/FWD) and Heinrich Böll Stiftung (HBF) study.Uganda, as of September 2011, is also a potential member targeted to join the Eastern African Power Pool (EAPP, http://www.eappool.org/eng/). Specific objectives of the organisation include optimization of the usage of energy resources available in the COMESA region, increasing power supply in the region, the reduction of electricity production costs and the creation of an environment that is conducive for investment.
The Electricity Act 1999This act enabled private participation in the electricity sector, and established the Electricity Regulatory Authority (ERA) as the energy regulator for the country. The Act legislated for the unbundling of the former UEB into the three utility groups operating today.The National Energy Policy 2002The policy goal in the energy sector is to meet the energy needs of the Ugandan population for social and economic development in an environmentally sustainable manner. Specific objectives under the energy policy include assessing the availability and demand of energy resources in the country, improving energy service access to reduce poverty, improve governance in the energy sector and institute improved administrative procedures, and stimulate the economic development of the energy sector, whilst minimising environmental impacts.Renewable Energy Policy 2007Uganda is one of the few African countries with a clearly focussed renewable energy policy, which was published by the Ministry for Energy, Minerals and Development (MEMD) in 2007. Its objectives include increasing access to modern, affordable and reliable energy services as a contribution to poverty eradication. This comprises general public access to electricity and enhancing the modernisation of biomass conversion technologies. The overall policy goal is: “To increase the use of modern renewable energy, from the current 4% to 61% of the total energy consumption by the year 2017”. The Renewable Energy Policy establishes a Standardised Power Purchase Agreement and Feed-in Tariffs for renewable energy generation projects. It introduces favourable financial and fiscal regimes for RETs, including:preferential tax treatment or tax exemption,accelerated depreciation,provision of risk mitigation mechanisms and credit enhancement instruments,credit mechanisms for renewable energy consumers.
Uganda imports all its petroleum products and there is, as yet, no production in the country; although some local production is expected to begin soon. Imports come primarily through Kenya (85%) and Tanzania (15%) via trucks. These products account for a significant percentage of the country’s per capita income. Fuel imports in 2009 were US$ 125 million, or 2.9% of total imports. This represents about 4.3% of the total export earnings in 2008/2009.
Role of the government
The Ministry of Energy and Mineral Development (MEMD, www.energyandminerals.go.ug) is responsible for overall management of the country’s energy sector, dealing with policy formulation, implementation and monitoring.The mandate of the Rural Electrification Agency (REA, http://www.rea.or.ug) is to facilitate provision of electricity in rural areas. The REA was established as a semi-autonomous Agency by the Minister of Energy and Mineral Development through Statutory Instrument 2001 no. 75, to institute the Government's rural electrification function under a public-private partnership. It functions as the secretariat of the Rural Electrification Board (REB), which carries out the Minister's rural electrification responsibilities, as defined in the Electricity Act of 1999.
The Electricity Act mandates the Minister of Energy to table in parliament an annual report on the progress of the Rural Electrification Strategy and Plan that contains, amongst other things, information relating to renewable energy power generation for sale to the main grid and for mini-grids. Furthermore, the creation of the Energy Fund seeks to provide a public financing source to support or leverage private sector financing, in addition to providing for the construction of hydropower projects and the associated infrastructure
Further facilitation activities are required to make investment in RETs a truly viable prospect in the country, including the simplification of land acquisition procedures, and capacity-building measures in the sector. The NDP 2010 identifies some key issues as barriers to further energy sector development, including high power tariffs, the limited extent of the national grid, the poor regulation and history of public-private partnerships in the country, and unfocused and uncoordinated institutional planning.
The Electricity Regulatory Authority (ERA, http://www.era.or.ug/) was established following the enactment of the Electricity Act 1999.
Solar energyUganda has an average of 5-6 kWh/m2/day of solar insolation, with an average of 8 sunshine hours per day, yearly, indicating an excellent potential for solar energy use. Solar energy is currently used primarily for off-grid electrification for rural communities, as well as for solar cooking, and providing water heating and power to public buildings, for example hospitals. An estimated 200 MW of potential electrical capacity are available in Uganda, and currently, a 50MW solar thermal plant, at Namugoga in Wakiso District outside of Kampala, is being investigated by a private firm, Solar Energy for Africa. Solar cooking also holds a significant potential in the country, with a large number of the population living in well-insolated areas, without access to energy services.Wind energyWind speeds are estimated to average 3-3.5 m/s, indicating a moderate potential for wind power. Studies have concluded that whilst the wind resource is insufficient for large-scale power generation, possible applications for the technology exist, for example, water pumping and small-scale power generation in mountainous areas. Small industries in rural areas, where targets for a mill range from 2.5kV to 10kV, could benefit from the wind resource. Currently, no large-scale developments are being made in the wind power sector of the country.Biomass energyBioenergy, apart from hydropower, is considered to be the second significant pillar to secure energy supply, particularly in rural areas. The transition from traditional biomass, which is often perceived as inefficient, to modern biomass and biofuel production and consumption is a main focal area of the government. Kakira Sugar Works (1985) Limited and Kinyara Sugar Limited are both licensed to generate electricity for sale to the national grid from bagasse, providing 12 MW and 5 MW respectively in 2010. Biomass cogeneration from agricultural wastes is seen to hold particular promise as a technology for the country, and a significant peat resource also exists, of which approximately 25 million tonnes is feasibly available for power generation, equivalent to 800 MW of potential capacity for 50 years. A limited program of biogas digester distribution was undertaken in the 1990s, and 50 digesters were installed in five districts in the country by 2004.Geothermal energy Uganda has an estimated geothermal resource potential of 450 MW, mainly located in the Western Rift valley part of the country (Katwe Kikorongo, Buranga and Kibiro). Feasibility studies are recommended to improve confidence in the resource and promote development.Hydropower Despite Uganda’s vast hydropower potential, estimated at 3000 MW, less than 10% is currently exploited. Bujagali, the third large hydropower plant on the Nile River is currently under construction, with an anticipated capacity of 250MW. Numerous other hydropower ventures are being investigated by both Ugandan and Japanese contractors, as well as the government. A number of small hydropower plants, with total installed capacity of slightly over 15MW, are in operation in various parts of the country, with a further 60 MW of projects in the development stage. An estimated 1,300 MW of large hydropower and 51.7 MW of small-hydro capacity are yet to be developed in Uganda.
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