2012-02-03 16:20:59 - Uganda Power Report Q1 2012 - a new market research report on companiesandmarkets.com
Uganda´s power sector is suffering from a shortage of generating capacity due to years of underinvestment, which has resulted in power infrastructure falling into disrepair. The country currently depends on hydroelectricity for around 76% of its total power generation output; the remainder of Uganda´s power generation comes from thermal power stations, using a mixture of bagasse and biodiesel fuel. In addition to introducing new hydro facilities, the sector´s long-term development will be characterised by a move towards renewable energy sources.
In the five years from 2011 to 2016, Uganda´s overall power generation is expected to increase by an annual average of 9.3% to reach 5.19TWh. Driving this growth will be a 7.0% annual average increase in hydropower. Meanwhile, thermal power
generation is expected to increase by an average of 15.5% annually over our forecast. In the short-term, Uganda´s dependence on hydroelectricity for the bulk of its power generation requirements means that the country will remain vulnerable to fluctuations in rainfall.
Uganda has several major hydroelectric projects currently underway. These aim to improve the country´s power supply and increase access to electricity. One such project, the Bujagali hydropower project, is a 250MW hydroelectric power plant which is managed by South African power utility Eskom. According to Uganda´s Electricity Regulatory Authority (ERA), full commissioning of the Bujagali project is due in April 2012.
Under its Renewable Energy Policy, the government aims to increase the use of renewable energy, from the current 4% to 61% of total energy consumption by the year 2017. Uganda´s new Renewable Energy Feed-In-Tariffs (REFIT) system, introduced in early 2011, appears to be one of the most sophisticated in Africa.
Ugandan net power consumption looks set to increase from 2.18TWh in 2011 to 3.21TWh by 2016, rising further to 4.63TWh by 2021. Underpinning the increase will be a steady rise in GDP, as well as sustained population growth. Following an increase in 2011 real GDP of an estimated 6.4%, we forecast average annual growth of 8.2% between 2011 and 2021. Meanwhile, Uganda´s population is expected to rise from the current level of 34.5mn in 2011 to 40.3mn in 2016. During the period 2011-2016, the average annual growth rate for electricity demand is forecast at 8.0%, but is due to slow later in the decade to an average of 7.6% in 2016-2021.
Due to the expected rise in net energy generation over the next few years, Uganda´s power supply shortfall should eventually decline. This trend has the potential to provide the country with a net export capability later in the decade, with a gradual decline in the percentage of transmission and distribution losses from around 6.8% helping to balance the market. By 2016, we predict that Uganda´s power sector will develop a net export potential of 1.6TWh, with potential for this to rise to 4.8TWh by 2021.
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