If demand for electricity is not increased, the country risks having an excess generation capacity of 1000 megawatts (MW) by 2025.
According to a study conducted by Cities for Infrastructure Growth (CIG), the challenge of low demand for power is critical as it could cost the country billions of shillings in suppressed demand.
“At current projections, if adequate measures are not put in place to grow demand, there will be an excess capacity of more than 1,000 MW by 2025. This will put significant financial pressure on the already constrained finances if additional demand of power is not created,” the CIG report reads in part.
Uganda’s total generation grid installed capacity is currently at 1,246.4 MW with another 10 projects, which have a combined installed capacity of 733.4 MW, in the pipeline.
Current power generation against peak demand of 650MW, leaves the current excess capacity at nearly 600 MW, immensely pressuring government to ensure demand grows at a commensurate speed.
As a result, CIG, a UK funded programme in partnership with the Ministry of Energy has launched the roadmap for catalytic power sector, which seeks to solve the demand challenges, among others.
The roadmap, drafted by Mr James Baanabe Isingoma, the power sector roadmap delivery lead, views the steel and hydrocarbon sectors as a possible solution to absorb the surplus generation.
“The projected demand from the Kabaale Industrial Park is in excess of 200 MW. A deliberate incentive based strategy to drive occupancy of the industrial parks will increase demand for productive use,” the roadmap recommends.
While the World Bank plans to finance the electrification of some industrial parks, the roadmap emphasises the need for coordinated planning and implementation to sequence the intervention matrix.
In the meantime, it recommended that the country looks to power exports to grow demand.
It should be noted that in 2018, the total net energy export to Kenya, Rwanda and Tanzania was about 198 GWh.
Government has since signed multiple bilateral agreements with South Sudan and DRC for cross border electrification projects with export potential of 690 MW, CIG reveals.
Focus on distribution and transmission infrastructure
In addition, challenges such as uncoordinated planning of projects continue to drain these efforts.
For instance, industrial parks meant to consume the electricity lack infrastructure such as road networks and water, which affect their operations.
According to the roadmap, there is a tendency for industrialists to generate their own power while others suspend their investments in anticipation of infrastructure development.