When it comes to electricity, there is a common question among Ugandans, ‘why does Uganda export power to other countries when we need it here?’
Well, we are part of the process of trying to actualise this vision of a fully integrated power market. The government of Uganda has heavily invested in electricity power generation & transmission and with the much-awaited Karuma Hydropower Plant and its interconnection power lines coming on board, an extra 600MW will be added to the national grid. The question is, where do we put all this power if the local market cannot consume it all even at peak?
The Eastern Africa region faces significant challenges in attracting investment, including political instability, inadequate regulatory frameworks, and insufficient financing and one of the initiatives aimed at addressing these challenges is the Eastern Africa Power Pool (EAPP). The development of energy infrastructure requires a long-term vision and strategic planning, involving stakeholders from the public and private sectors, as well as local communities and civil society organisations.
One may wonder why is it important for African countries to collaborate towards a common power pool or market. Trading through the common power pool or market enables members to benefit from lower costs. The main objective of the Eastern Africa Power Pool is to promote competition in the generation segment in a larger interconnected system. The market will operate through the merit order practice that the cheapest power plants are dispatched first hence ensuring the most competitive and economic power. The power pool will also enable member countries to achieve energy security and reliability.
The EAPP convened the 29th Steering Committee meeting on 20th July 2023 chaired by Joshua Karamagi – CEO, UETCL (myself) and the 17th Council of Ministers Meeting on 21st July 2023 under the Chairpersonship of Hon. Dr. Ruth Nankabirwa Sentamu, the Honorable Minister of Energy and Mineral Development of Uganda discussed key issues related to the regional power pool. The EAPP Council of Ministers which is the supreme governing body deliberated on the draft Bilateral Power Trading Framework Agreement, which upon consent is aimed at facilitating cross-border energy trade among member countries. The Council also discussed the proposed addendum to the Inter-Governmental Memorandum of Understanding (IGMOU) and approved the recommendation of the steering committee to introduce an independent market operator.
The first win for Uganda is that we have thirteen (13) EAPP member countries which signed the Inter-Governmental Memorandum of Understanding (IGMOU) and fourteen utilities that signed the Inter-Utility Memorandum of Understanding (IUMOU) where Uganda Electricity Transmission Company Ltd (UETCL) is a member utility by virtual of its role to buy, transmit and sell bulk power within Uganda and outside.
Secondly, about 65% of the member countries are currently interconnected. Case in point, Uganda is already interconnected with Rwanda and Kenya, while Kenya is interconnected with Ethiopia, which is interconnected with Sudan and Sudan is interconnected with Egypt. So, you can see the integration is already taking shape. Lastly, for the countries which are not yet interconnected, we continue to hold consultative meetings to ensure that the required infrastructure is put in place and a number of feasibility studies are ongoing geared at this. For the case of Uganda, we are undertaking feasibility studies for the Uganda-Tanzania, Uganda-South Sudan and Uganda-DRC interconnection projects.
EAPP was established in 2005 but the common market is yet to happen because of a few critical barriers which have hindered the integration like insufficient power generation but also the absence of interconnectors to wheel power across borders as well. The good thing is that substantive investment has been attracted in the power generation segment over the years and construction is advanced. This leaves us with one major challenge, the need for investment in high-voltage power lines to ensure the region is fully interconnected.
In a nutshell, Uganda stands to gain a lot from the EAPP once the initial electricity trading activities commence before the end of 2024. This will answer the common question among Ugandans with a better understanding as to why it is important for the countries in the Eastern African region to trade power among themselves.