June 1, 2015

Developments and investment opportunities in renewable energy resources in Uganda

The Ugandan Convention UK is held jointly with Uganda Investment Authority. It is pleased to welcome Dr.BenonMutambi, Chief Executive Officer, Electricity Regulatory Authority who will make a presentation on specific energy topics, such as the new regulations that have recently been introduced in the sector, the investment opportunities in renewable energy, rural electrification schemes, GetFIT scheme and permit, power purchase agreement regulations ect.  He will also highlight the micro opportunities in value chains for Ugandans in the Diaspora.

Mr. Benon
Mr. Benon

In the energy sector, there is significant power potential of over 5,300 MW from renewable energy sources, which is sufficient to step up electricity supply to current and anticipated mega industries to drive the economy steadily in the medium term.

Electricity Regulatory Authority (ERA) is a Statutory Body established to regulate the generation, transmission, distribution, sale, export & import of electrical energy in Uganda, and to guide the liberalization of the electricity industry, manage licensing, rates, safety and other matters concerning the electricity industry.

Opportunities for investment include;

  1. Participation in Public-Private Partnerships for developing the large and small hydro plants to meet the growing demand of power.
  2. Development of privately owned thermal projects.
  3. Contribution to equity in financing of power projects.
  4. Participation in the Engineering, Procurement, and Construction (EPC) of the planned projects.
  5. Suppliers of equipment as we upgrade and expand our National Transmission network.
  6. Participation in the development and promotion of the different renewable energy technologies such as small hydros, geothermal, solar water heaters, solar driers, solar cookers, etc
  7. The markets have been liberalized principally through reducing state interventions
  8. The Uganda Investment Authority provides information to investors and facilitates them to obtain permits, licenses and other requisite information;
  9. The country is a signatory to the Multilateral International Guarantee Agency (MIGA) which guarantees protection and;
  10. Under tax provisions, duty on mining equipment is zero-rated.
  11. The government of Uganda recognises petroleum and minerals as non-renewable resource and therefore have to be managed sustainably as guided by the market forces for national economic and social growth.
  12. The national economic development priorities are based on the following major economic reforms:

Upstream

  1. Speculative Geophysical surveys. To be undertaken in the AlbertineGraben, and basins outside the Graben prior to licensing rounds to provide good quality and dense coverage data
  2. Acquisition of exploration acreage based on public competitive mechanism.
  • Joint ventures and farm-in arrangements with existing licences
  1. Environmental services. These include waste management and treatment.
  2. Construction of heated crude oil pipelines to refinery
  3. Service provision and contracts in the fields of Engineering, Procurement & Construction, Capacity and Skills Development
  • Logistical services
  • Hospitality services
  1. Construction and Fabrication,
  2. Medical, hotel, Leisure and training facilitie

Midstream

  1. Development of the refinery; FEED and EPC.
  2. Development of attendant infrastructure (pipelines & storage); Crude to the refinery, crude export & refined product to distribution centers.
  • Services during refinery, Crude export and product pipeline development; Civil works, electrical, welding, etc.
  1. Utility systems for the refinery.
  2. Waste management facilities to handle refinery waste.
  3. Refinery related petrochemical industry like LPG plants and bottling.
  • Capacity and Skills Development
  • Development of an airport near the AlbertineGraben to support development of the oil fields and the refinery.

More on Renewable Energy opportunities

Large Hydro

The potential for development of large hydropower projects along River Nile is estimated at about 2,000 MW. With only 380 MW developed at Kiira and Nalubaale, and 250 MW at Bujagali, the unexploited potential is well over 1300MW.

Small Hydro

Small hydro presents a category of energy sources which could sustainably contribute to the enhancement of rural electrification, especially if the project area has no existing power distribution. The table below shows small hydropower sites that are available for development.

Developers are also encouraged to scout for potential sites in the Eastern part of Uganda (The Mountain Elgon region) and the Western Districts of Ibanda, Rubiriizi, Buhweju, Kabale, Kisoro, Kabarole and Rukungiri.

Although several sites have been identified and licensed from the Mountain Rwenzori ranges, the mountains still represent a very high untapped potential for small hydropower.

Biomass

Biomass based power generation is increasingly becoming competitive and considerably cheaper than thermal power based on fossil fuels. The need for modern biomass energy has become more tenable due to increased electricity demand, coupled with unfavorable weather changes that have resulted into decreased water levels in Lake Victoria.

Co-generation is convenient in situations where there are excess agricultural residues such as bagasse, coffee and rice husks. In the case of sugar industries, there is often excess bagasse after the factory requirement, which can be used to generate electricity for local sale or for feeding into the national grid. Click here for a map of the biomass distribution in Uganda.

Geothermal

Geothermal energy is one of the possible alternative renewable energy sources in Uganda which could supplement other sources of energy.

More than 40 geothermal sites were studied for their prospects parameters like temperature, chemistry of reservoir, natural heat transfer and fluid characteristics to identify specific project areas and prioritize those for more detailed investigation. These investigations revealed three major potential areas for detailed exploration, namely; Katwe-Kikorongo, Buranga and Kibiro. These are all situated in or near the Western Rift Valley of Uganda (zone of most recent volcanic activities). According to the Renewable Energy Policy of Uganda, 2007, the combined geothermal potential from these three major areas is 450MW.

Solar

Existing solar data clearly shows that the solar energy resource in Uganda is high throughout the year. With mean solar radiation of 5.1 kWh/m2 per day on a horizontal surface, the country has a potential of 11.98 x 108 MWh gross energy resources. At an estimated conversion efficiency of 10%, the country has available power of 11.98 x 107 MWh.

At present, solar photo-voltaic (PV) electricity is not generated in sufficient quantities for inter-connection to the national grid. However, one of the long-term policy measures to increase diversity and security in energy supply in the country is to develop small renewable projects including the use solar PV generated electrical energy.

In that regard, the Board of ERA in April 2014 considered and approved a Feed-in-Tariff (FiT) of US$ 11 Cents per kWh for grid connected solar PV energy. 

Implementation of grid-connected Solar PV projects in Uganda through competitive bidding.

Continuous technological advancements have resulted into cheaper and more efficient solar photovoltaic technology worldwide. Benefits from these improvements can only be realized through effective management of the cost of production of electricity from this resource. Competitive procurement of such capacity is one of the most effective means of guaranteeing reasonable and fair pricing of solar power, as well as harnessing the benefits of such modular technologies, including system loss reduction and voltage stability.

Wind

Recent studies indicate that the wind speed in most areas of Uganda is moderate, with average wind speeds in low heights (less than 10 m) ranging from 2 m/s to about 4 m/s. Based on wind data collected by the Meteorology Department, it was concluded that the wind energy resource in Uganda is only sufficient for small scale electricity generation and for special applications, such as water pumping mainly in the Karamoja region. Small industries in rural areas where targets for a mill range from 2.5kVA to 10kVA could benefit from the wind resource.

 

Waste to Energy

The conversion of municipal waste to energy will not only improve the process of waste management in the cities, but also contribute to the energy mix. According to the Ministry of Energy and Mineral Development, it is estimated that Kampala city alone generates 730,000 tons of waste per year, of which 70% is organic waste. There are major districts around the country with considerable waste volumes such as Wakiso, Mbarara and Jinja, all of which represent considerable waste to energy potential.

 Peat

Peat is not technically a renewable energy source. However, a theoretical peat volume of about 250 million tons exists in Uganda (Source: The Renewable Energy Policy for Uganda, November 2007). Taking into consideration the varying quality of peat, the rather strict wetland policy in Uganda as well as the impossibility to use conventional peat production methods, only 10% of the available volume may be available for power generation. This peat resource volume would be adequate for generation of about 800 MW for the next 50 years. Available peat resources are dispersed mainly to Western and South-Western Uganda, where the desired characteristics are better than in other regions.

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