Regulatory Revisions Energize Electricity Sector Growth
Eng. Ziria Tibalwa Waako, Electricity Regulatory Authority, (ERA) CEO talks to World Business Journal about beneficial regulatory changes, improving the investment climate for renewables, and moves towards a universal clean energy access target by 2030.
What are the key revisions in the amended Electricity No. 4 Act of 2022 and the expected benefits?
A key regulation introduced royalties for renewable energy plants, extending benefits previously exclusive to hydropower installations. This move supports the green initiative aiming to involve local communities where these plants operate, fostering community ownership and encouraging their active participation in the maintenance, security, and oversight of energy facilities.
The revised law abolished the single buyer model where a sole transmission company acted as the bulk off-taker, supplier, seller, and transmission system operator. This amendment led to the separation of the transmission segment, opening up the regulatory landscape. Now, multiple public and private entities can engage across the entire electricity value chain, including generation, transmission, distribution, export, and sale.
Aligned with this transformation, the “Electricity Sale in Build to Specified Customers (Direct Purchase) Regulation, 2022” creates significant opportunities for private investors. Generation and transmission companies can now sell power directly to designated entities, including industrial parks, specialized consumers, and for export purposes.
Additionally, clauses introduced stiffer penalties for those tampering with infrastructure. While some regulations, like net metering, have been cleared for gazetting by the Office of the Government Attorney General, they aim to integrate consumers producing power into the grid, expected to become effective by the end of January 2024
With the Ministry of Energy and Mineral Development (MEMD), we support the establishment of a planning department to streamline planning processes across the value chain.
Concurrently, the formation of the Electricity Infrastructure Fund assists in preparing projects through feasibility studies, providing potential investors with a clearer insight into investment opportunities.
What pivotal changes has GET FiT brought to Uganda’s energy landscape?
The Global Energy Transfer Feed-in Tariff (GET FiT) has created a conducive investment climate for solar, wind, and mini-grid projects, significantly advancing our mission to provide widespread access to clean energy by enhancing the overall enabling environment for private investment in renewable energy.
It sets a benchmark not just in Uganda but across Africa and has added 158MW to the grid, with a focus primarily on renewable sources, supporting our objective to decarbonize the sector.
What key approaches are advancing the goal of a universal clean energy access target by 2030?
Strategically, we’ve integrated grid extension with off-grid solutions, backed significantly by government initiatives and development partners including the EU and the German Federal Ministry for Economic Cooperation and Development (BMZ). With their help, we’ve subsidized capital requirements for the first set of 40 mini-grids, enhancing financial viability and making end-user tariffs more affordable for the rural communities that benefit most from these installations.
We’re committed to finding innovative solutions to the challenges mini-grids face, such as their lack of economies of scale leading to higher fixed costs and end-user tariffs. This is crucial for our target demographic, with below-average incomes, so high tariffs do not hinder the adoption of these systems.
For example, the GET. Access initiative aims to establish 1,000 mini-grids across the country, connecting over 150,000 people in 140 remote villages. Through GET. Access, developers will receive financing supported by up-front, interim, and results-based CapEx subsidies. Additionally, the project will promote the productive use of energy (PUE) by providing selected appliances, facilitated by a PUE consultant.
In collaboration with the World Bank, we are also setting up mini-grids specifically to serve rural schools, health centers, refugee camps, and vulnerable settlements.
We are convinced that a collaborative approach involving the government, private sector, and development partners is essential to balance mini-grids, solar home systems, and grid extensions effectively. This cooperation is key to achieving universal electricity access by 2030.
