A Publication of AFREPREN/FWD and HBF – HA Initiative on

Renewables in Eastern and Horn of Africa

Sponsored by

HBF-HA and AFREPREN/FWD

By

James Baanabe

Executive Summary 

Uganda is well endowed with a variety of renewable energy resources that can be used for power generation. Presently the total installed capacity at Kiira and Nalubale hydropower stations in Jinja is about 380 MW. However, only 160 MW is being utilised due to reduced water levels on Lake Victoria as a result of drought experienced in 2004 to 2006. The total installed capacity of mini hydropower generation is about 15.6 MW. This includes Mobuku III (10 MW), Mobuku I (5.4 MW), Kuluva (0.12 MW), Kagando (0.06 MW) and Kisiizi (0.06 MW).

The shortfall in power supply has necessitated the installation of about 100 MW thermal plants which provide power at a high cost to the consumers. Power supply shortfall has also led to load shedding which has a negative impact on the economic growth of the country. The current state of affairs demands that the country increases the share of electricity produced from renewable energy sources such as cogeneration in the energy mix.

While Uganda faces a shortfall in power supply and high electricity tariffs, renewable energy sources (including cogeneration) in the country remain largely untapped. These include small hydro, biomass, solar, wind, municipal waste and geothermal resources. These renewable energy sources have additional benefits such as having minimal emissions of greenhouse gases and high efficiency of energy production as is the case with cogeneration.

The key objective of this study was to investigate what it would take to achieve a fully participatory and vibrant sustainable energy sector in Uganda with specific emphasis on cogeneration.
To achieve this objective, literature surveys were undertaken including extensive reviews of a wide range of reports and publications. Discussions were also held with major stakeholders in the cogeneration business who included: Policy makers from the Ministry of Energy and Mineral Development, representatives of the Rural Electrification Agency, sugar factory managers, representatives of the East African Development Bank and representatives of the Uganda Electricity Transmission Company Limited (UETCL). Relevant data and statistics were collected using questionnaires. Additional relevant information was obtained from the internet. Moreover, structured interviews were conducted.
Cogeneration is an efficient way of providing thermal heat as well as electricity. It also has a number of additional benefits to the country which include job creation within rural communities as well as improving the environment.

However, the existing policy framework has not attracted many companies into the development of renewable energy projects including cogeneration. In addition, there are several barriers to promoting community based cogeneration. These barriers can be removed by putting in place specific measures to address them.

Government has addressed some of the barriers by introducing a Renewable Energy Policy which provides a solid investment framework for promoting the development of cogeneration. However, the key challenge facing local communities in cogeneration investment is accessing financing and has yet to be fully addressed.

While designing community - driven cogeneration projects, the bottom up approach is preferred so that communities can feel that they are part of the cogeneration projects. The best model of operation appears to be the concession approach which is put in place with technical and financial support by government.

The policy framework promotes community participation in rural energy investments such as small scale rural electrification initiatives. The policy, however, does not adequately address community participation in larger energy projects (relative to the communities’ incomes) such as cogeneration investment.

At the macro – economic level, cogeneration projects in Uganda are relatively small making it hard for them to attract financing on their own. However, they can be promoted in a bundled fashion, such as under the Energy for Rural Transformation programme which has an existing framework to support project development.

To sum up, there is need to review the existing policy and regulatory framework to ensure that key barriers are removed and adequate incentives are in place to promote local participation in cogeneration.

This report consists of five chapters. Chapter one presents a background review of the energy sector in Uganda including the current status of renewables contribution to the Uganda energy sector.
Chapter two assesses cogeneration development in Uganda, its current status as well as key stakeholders involved in the cogeneration industry in Uganda.
Chapter three examines the involvement of local groups in the cogeneration industry and provides suitable models for local groups’ participation in cogeneration. Chapter four reviews the policy and regulatory frameworks supporting cogeneration and limitations to local community participation. The final chapter (chapter 5) presents conclusions and recommendations for promoting community participation in cogeneration in Uganda.
 

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