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Packaging power generation and transmission projects, according to Ministry of Energy, seeks to check deemed energy costs, which result from unsupplied power due to absence of transmission lines from generation stations to substations
Upcoming electricity generation projects have to be packaged with transmission lines so that both are completed at about the same time.
This, according to Ministry of Energy, seeks to check deemed energy costs, which result from unsupplied power due to absence of transmission lines from generation stations to substations.
“The ministry continues to address key challenges [such as] meeting the deemed energy costs arising from existing contractual obligations,” reads a Ministry of Energy proposal tabled before the Parliamentary Committee on Environment and Natural Resources.
“Now, whenever possible, the ministry will ensure generation projects are tied with transmission lines as complete packs to ensure that deemed energy issues do not continue to occur with new projects,” the proposal adds.
Deemed energy costs, according to the Auditor General’s Report for the year ended June 2022, contribute to high tariffs because they are either paid for through the consolidated fund or end user tariffs.
Mr Thomas Tayebwa, the deputy speaker of Parliament, said recently that deemed energy costs could be better spent on connection material such as electricity metres and cables.
“The money we are spending on deemed energy can connect many homes. If we connected more households and businesses, I am sure we would we would recoup the money in about two years,” he said on August 29 in Mitooma District during the launch of restoration works on the Ishaka–Rukungiri electricity distribution line.
During the same event, Mr Selestino Babungi, the Umeme managing director, said they will spend $703,208 (Shs2.6b) on new transformers, replacing aged poles and implementing last–mile connections as a way of advancing government programme to increase access to power.
Besides the transmission lines, the distribution network has to be expanded to enable distribution companies pick power from transmission substations, step down the voltage and carry power through medium and low voltage lines to end users such as homes, offices and factories, among others.
There have been instances where due to the absence of dedicated transmission lines, Uganda Electricity Distribution Company Limited and Umeme have had to string interim connection lines from hydropower plants such as Acwa and Elgon Siti 2, respectively to check deemed energy costs.
It remains to be seen if the proposal to package generation and transmission projects as one will start with some of the expected projects, among which include Ayago, Oriang, and Kiba hydroelectric plants. .
Feasibilities studies on the projects already been carried although findings are not yet public.
While it is not clear when the developers will start construction, given the long lead times, the earlier work starts the better because as Uganda’s population grows, as more businesses are established, unmet demand, too, should increase.