The decision by the power sub-sector regulator, Electricity Regulatory Authority (ERA), to slam the doors on investments in five solar photovoltaic (PV) projects estimated at around $230m (Shs796b) has yet again lifted the lid on the chaos and reading at variance by government energy sector planners.
This uncoordinated movement of troops, according to sources, was at the heart of the September 3 joint technical meeting called by the Ministry of Energy Permanent Secretary, Mr Irene Bateebe, to ‘harmonise’ positions and ensure coherence in the planning of renewable energy projects such as solar. The meeting was attended by technocrats from the ministry, ERA, Uganda Electricity Distribution Company Ltd (UEDCL), and Uganda Electricity Transmission Company Ltd (UETCL).
According to sources, the stormy meeting went on for hours as sector players pointed fingers, particularly at the regulator, ERA, which is, on another front, butting heads with UEDCL over the recurring power outages around Greater Kampala Metropolitan, amid derelict infrastructure.
ERA is accused of disallowing investments, from as far back as 2017, in an attempt to keep in line with President Museveni’s gospel of keeping end-user tariffs in check. The poor state of the power network, coupled with UEDCL frantically adding on more connections, came to light as soon as Umeme handed over on March 31; that is when the chickens came home to roost.
In the latest episode, ERA disallowed solar projects: 100 Megawatts (MW) in Nakaseke District, 20MW in Moroto District, 20 MW in Luuka District, 20 MW in Nebbi District, 20 MW in Gomba District, and 150 MW in Amuru District, which industry players described as ‘perplexing’ considering the government’s target of achieving 52,000 MW of installed capacity by 2040, as per the 2023 Energy Policy, the electricity sub-sector blueprint.
Uganda’s current electricity generation capacity stands at 2,046MW, of which solar, according to the Energy Policy, accounts for 66.5MW or 4.4 percent of the energy mix. In back-to-back correspondences, ERA wrote to the executives of the potential investors, disallowing the new solar projects.
On September 1, ERA wrote to Sahaj Renewable Power Limited declining to grant the application for a feasibility study to carry out detailed feasibility studies and related activities leading to the establishment of a solar plant in Nebbi, arguing that ‘the maximum firm capacity of Variable Renewable Energy (VRE) that can be safely integrated into the national grid is capped at 200 MW.’
‘The threshold has already been fully utilised by projects that have either been licensed or approved for development. The implication is that the grid’s technical capacity to integrate additional VRE has been exhausted, and any further connections of VRE would compromise the stability and security of the power system,’ ERA’s Chief Executive Officer Ziria Tibalwa Waako wrote.
She further indicated that UETCL is currently undertaking ‘a Grid Stability Study,’ which will inform the additional VRE that can be undertaken at the transmission level, the definitive capacities at the distribution level, and any technologies that may be integrated into the national grid while maintaining system reliability.
Similar reasons are provided in the rejection letters of the other projects. Energy America, the investor in the Nakaseke solar project, wrote to President Museveni earlier in the year expressing interest in developing a 100MW solar project integrated with 250 megawatt-hours (MWh) of battery energy storage (BESS), with possible co-financing by the US EXIM Bank and US International Development Finance Corporation.
The President wrote to the Energy Minister Ruth Nankabirwa in February, directing her to liaise with the company executives on the matter. The Ministry of Energy further published the project in the Uganda Gazette, only to be slammed by ERA.
Representatives of some of the investors, speaking to this newspaper, wondered why ERA first allowed them to go through the laborious bureaucracy, well aware that the ‘maximum firm capacity of Variable Renewable Energy (VRE) that can be safely integrated into the national grid is capped at 200 MW.’
‘You make people spend money on lawyers, and this to kick-start the process, then they slam the doors on at the next stage. But then the country’s Energy policy indicates there is a window for investment in solar, so which is what?’ one company’s representative said.
Representatives of Karamoja Solar Company Ltd said they were knee-deep in pre-construction processes like leasing land when their application for a feasibility study was rejected. The ERA’s Director for Corporate and Consumer Affairs, Mr Julius Wandera, asked about the same, arguing that there ‘must be a matching investment in the grid at the transmission level to align with the investment in intermittent sources.’ ‘UETCL is the system operator. They understand grid stability and grid requirements better than everyone else.
They work with global consultants daily. So, what they advise should be seriously respected,’ he said. UETCL officials told this newspaper the grid stability study is scheduled to be completed by the end of the year. Ms Bateebe also defended that the study is in the final stages, and it ‘is critical in guiding the ministry and ERA on the level of solar investment. ‘The ministry clears the projects to allow for feasibility studies to advance once cleared by ERA,’ she said.
Asked about the contradiction of the ministry greenlighting the projects in light of the Energy Policy, only to be slammed by ERA, Ms Bateebe said:
‘The minister gives a policy directive that has to be evaluated as part of the evaluation process. Any further directives will be given after the grid stability study.’
The Energy Policy details an energy mix and investment requirements by 2040, including 4,500MW from hydro, 1,500 from geothermal, 24,000 from nuclear, 1,000 from waste to energy, among others, with a price tag in the region of $245 billion (about Shs851 trillion).