Green energy: What is in it for industrialisation?  

Uganda has set plans to double its current 20 percent industrial contribution to gross domestic product to 40 percent.

This should happen at least before or around 2040 under the Vision 2040 initiative.

It is such as ambitious plan by all means. However, it will be how long the vision can hold amid a global transition from carbon heating. 

The increase in concentration of greenhouse gases in the atmosphere such as carbon dioxide, ozone, methane, are a major contributor to global warming, which in turn is a cause of climate change that has been observed over an extended period.

The threat forced the Inter-Governmental Panel on Climate Change to issue a red alert on climate change impact.

What this essentially indicated is that the globe is almost out of time if it is to reach the target of reducing the rate of increase in the rise in global temperatures by 1.5 degrees centigrade in order to achieve net-zero increase by 2050.

Therefore, there’s a huge call for the global energy sector’s shift from fossil-based heating energy - including oil, natural gas and coal - to renewable energy sources such as wind and solar, as well as lithium-ion batteries.

Climate change impact has altered how manufacturers do business and the demand by the political elite, environmentalist and academia is a shift to sustainable industrialisation.

Ugandan manufacturers, much like their African counterparts heavily rely on existing machinery powered by carbon-emitting diesel or gasoline.

However, Amelia Kyambadde, the former Trade minister and now presidential advisor on industry, observes that whereas Uganda is still in the second Industrial Revolution where the use of fossil fuels is still in abundance, there is need to change.

“Our oil, which is our gold, is still in the ground. Fortunately, it is in the final stages of preparation for extraction. Our oil production peak will soar while oil reserves of the developed countries will be getting used up,” she notes.

But then, Kyambadde poses a question: “How do we translate our unlocked potential into industrialisation when, ironically, our oil imports are rising by $20b of our respective gross domestic product per annum in Africa?”

Kyambadde offers some lessons from Europe that took a priority task in the first half of the 21st century, and led the way to the third Industrial Revolution by reducing carbon emissions and switching to a low carbon economy.

This meant that in the future, they would produce clean and renewable energy for their own needs with surplus for other purposes and that would be the pillar for the third Industrial Revolution.

In her argument, the industrial civilisation of Europe is currently challenged by the fact that oil and other fossil energies that make the industrial way of life are sun setting and technologies made and propelled by these energies are antiquated.

As Uganda aspires to qualify for the third Industrial Revolution, Kyambadde observes that we can pick lessons from the five pillars as recommended by one author Jeremy Rifkins.

Jeremy in his book, the Third Industrial Revolution recommends; shifting to renewable energy; transforming the building stock of every continent into micro power plants to collect renewable energy on site; water recycling and deploying hydrogen and other storage technologies in every building and throughout the infrastructure to store intermittent energies.

Uganda’s preparedness for the energy transition is premised on the Green Manufacturing Strategy with a goal to enhance development and adoption of green manufacturing strategies and practices for improved resource productivity, environmental sustainable performance and competitiveness.

However, if Uganda is to transition successfully into the third industrial revolution, Kyambadde proposes that; industrialists, entrepreneurs and managers will need to take advantage of all the cutting edge business models.

This may include using the internet, open source and new commerce, research and development strategies, sustainable low carbon logistics and supply chain management.

During the Covid -19 lockdown, she observes, a new digital manufacturing revolution was intensified through the process of online production, 3D – printing of all sorts of goods from jewelry to mobile phones, auto and aircraft parts, medical implants.

 This shift to additive manufacturing is distinguished from subtractive manufacturing.

“3D entrepreneurs spend less time on cost of production and they require as little as 10 percent of the raw materials and there is also a possibility of huge energy savings,” Kyambadde says.

Electricity as a game changer

As far as industrial infrastructure is concerned, technology in Africa leaped from firewood to electricity.

Immaculate Owomugisha, the general secretary at Uganda Chamber of Commerce and Industries, observes that using hydro power is the quickest way to spearhead the energy transition.

“But when you look at the manufacturing industries, research that we have done at Uganda National Chamber of Commerce indicates that at least 9 percent of manufacturers have a generator at standby,” she says.

Owomugisha’s argument echoes issues on power reliability among manufacturers.

The energy transition also poses substantial cost and technology challenges for Ugandan manufacturers.

Owomugisha says the cost of transitioning into sustainable manufacturing is high, and there will be need for government to support private sector players with incentives such as capital at low interest rates. 

The European Union for now has piloted its green growth strategy to support Uganda’s industrial parks in that context. 

Caroline Adriaensen, the European Union head of cooperation, last week unveiled a Shs20b kitty that will fund initiatives in the area of private sector development, access to finance and traits that are contributing to sustainable industrialisation of the country.