Government to compensate power generator for low demand
The government will compensate the Uganda Electricity Generation Company Limited (UEGCL) for unused power generated by the Karuma hydropower plant, according to the Electricity Regulatory Authority.
Though no explanation, is given it is probable this decision is informed by the fact that Uganda has excess ‘electricity capacity’, that is, it is generating more electricity than it consumes.
Currently, Uganda has an installed generation capacity of 873 megawatts (MW).
Suppressed demand at peak hours, on the other hand, is 570MW. Suppressed demand during the shoulder and off peak hours is lower.
That means up to 300MW is not dispatched from Uganda’s electricity generation plants to the transmission company, through the distribution utilities to the electricity end–users.
Much as there will be increased suppressed demand between now and when Karuma will be commissioned in 2019, the increase will not absorb all the electricity that will be generated.
Now, since Uganda borrowed $1.4 billion (Shs5.1 trillion) being used to finance the construction of Karuma HPP, it is in Uganda’s interest to repay the loan according to the tenor of the loan – within 15 years.
But since not all the money will come from the end–user tariffs, the government would have to chip in.