New energy policy to promote solar and geothermal sectors in Uganda

The new planned national energy policy underscores Uganda’s strategy to promote development of solar and geothermal projects while also increasing domestic demand for and better affordability of electricity in the country.

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New energy policy to promote solar and geothermal sectors in Uganda

Solar and geothermal energy sectors in Uganda has received massive boost following the release of a revised draft of the National Energy Policy, which seems to embark on strategies that will promote new forms of energy such as solar and geothermal power.

The new planned national energy policy underscores Uganda’s strategy to promote development of solar and geothermal projects while also increasing domestic demand for and better affordability of electricity in the country.

In Uganda, biomass energy consumption is at 88 per cent of the total primary energy consumed in the country – mainly through firewood, charcoal and crop residues. Electricity, especially hydropower, contributes approximately two per cent, while fossil fuels (oil products) account for 10 per cent of the national energy mix.

Biomass consumption, especially in the rural areas, is largely because electricity budget is way out of the pockets of many of the people.

“There is limited productive use of electricity especially in rural areas which negatively affects demand growth, affordability and uptake. Low demand growth compared to planned generation capacity is likely to exert pressure on consumer tariffs,” the draft energy policy notes.

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“Affordability is also impacted by other factors including pricing that is in turn affected by foreign exchange rate fluctuations, inflation and the performance of energy service providers.”

The country intends to gradually shift from primarily private sector led growth to public-private partnerships, and increased public financing of sector developments aimed at increasing affordability and attracting more investments into the sector.

The energy policy aims at the formulation of innovative financing mechanisms for private geothermal resource development through provision of fiscal and other incentives, on top of soliciting funds for the management of geothermal exploration risk in order to attract investors. Already, UK based company – Bantu RG Energy, through its local subsidiary – Bantu Energy Uganda Limited – has contacted the Electricity Regulatory Authority with a proposal to building a 10MW geothermal power plant in the country.

Uganda plans to promote solar energy through different interventions, with the policy mentioning the provision of tax incentives and waivers for solar thermal equipment as a key strategy that the government will use.

12 geologists drawn from Uganda and Tanzania were last month trained by The Geothermal Development Cooperation (GDC) in kenya on collection of geosciences data and information, in a move aimed at unlocking the continent’s unexploited green energy and natural resources valued at billions of shillings.

Kenya has positioned itself as a regional leader in the renewable energy sector ranking top in geothermal power generating capacity in Africa, and ninth globally.

Kenya ranked top geothermal generating country in Africa