OPPORTUNITIES AND CHALLENGES OF POLICY AND REGULATORY REFORMS IN THE POWER SECTOR IN UGANDA

( Cogeneration Development and the Private Forestry Sector Participation in the Electricity Industry) A Presentation at Sotik Tea Company Training Course on Renewable Energy and Biomass Cogeneration Technologies on 10 & 11 th January 2009, Sotik Tea Factory, Kenya by Hudson J. Andrua

POWER SECTOR REFORMS

   Renewable Energy Policy Liberalization & private sector participation Independent regulatory body

ENERGY SECTOR

      Hydro-electricity 380MW installed capacity currently under utilized Inadequate electricity generation for the load Low rural electrification and grid densification Major use of electricity for lighting Renewable energy resources for power generation Mini-hydropower generation (15.6MW

ENERGY SECTOR (Cont’d)

    Thermal plants Power supply shortfalls High electricity tariffs Untapped renewable energy resources potentials (biomass, solar, wind, geothermal etc)

ENERGY CONSUMPTION

TJ

300,000 250,000 200,000 150,000 100,000 50,000 0 1997 Firewood 2000 Charcoal 2005 Petroleum 2110 2115 Electricity

FOREST SECTOR National goals and objectives

• Achieving sustainable forest resource management • Raising the incomes and quality of life  Increasing economic productivity and employment

FOREST SECTOR REFORMS

      The new Forestry Policy (2001) The National Forest Plan (2002) The National Forestry and Tree Planting Act (2003) New institutional roles and responsibility Private sector participation Grass root stakeholders involvement

FORESTRY SECTOR REFORM (Cont’d)

New Institutional Roles and responsibilities

      Forestry Sector Support Department (FSSD)  Policy direction, strategic planning, National Forestry Authority (NFA)  CFR, partnerships with stakeholders District Forestry Services (Local Governments)  LFRs, forests on private land, extension services NGOs & CBOs  Advocacy, lobbying, service provision Private Sector  Investment Local Communities  Forestry on farm, collaborative forest management,

LAND COVER /USE

Other land 28% Tropical high forest 5% Woodland 19% Plantations 1% Bushland 7% Subsistence farmland 40%

OWNERSHIP OF FORESTS

'000 ha 3500 3000 2500 2000 1500 1000 500 0 FD Tropical High Forests UWA Woodlands PRIVATE Plantations

18.000

16.000

14.000

12.000

10.000

8.000

6.000

4.000

2.000

0 '000 tons

WOOD DEMAND

Formal sector In-formal sector

WOOD CONSUMPTION

18 16 14 12 10 8 6

Informal sector Formal sector

4 2 0 Fire wo od ho use ho ld Fo r C ha Fire rco wo al od - C omme rci al Fire wo od In du stri al Po les Sa wlo gs

TRENDS (Demand, Yield, Deforestation & Wood Balance)

60,000 40,000 20,000 0 -20,000 -40,000 -60,000 Demand Annual yield 3.15% defor.

Wood balance 3.15% defor.

Annual yield 0.9% defor.

Wood balance 0.90% defor.

OPPORTUNITIES IN THE FOREST SECTOR

        Availability/security of land and trees The permanent forest estate Wood industries The District Forestry Services Biodiversity and environmental services Urban forestry Forestry in rural livelihoods Contribution of forestry to wider govt priority plans

POTENTIAL COGEN INVESTMENTS

   

Modern bio-energy technologies

Biogas zero-waste technology (about 500 biogas plants exist and over 2,500 zero-grazing farm households & commercial dairy farms & piggeries to support larger biogas plants for thermal and electricity needs Bio-fuels (production of bio-diesel to meet rural electrification targets (indirect power supply) to reduce over-dependency on imported diesel Gasification technology (conversion of biomass into modern sustainable energy and other products) (10kw)

OPPORTUNITIES

   Increased private sector and community participation Investment opportunities for private sector Energy plantation development

OPPORTUNITIES

     Policy environment favourable for private sector and community participation Untapped cogen potentials and current national energy development priorities (energy for rural transformation(ERT) Financial incentives –(Grants, Tree Fund) Land availability /security for energy plantation development Unfulfilled demand for biomass

CHALLENGES

        Finance Rate of national electrification –(demand) Private sector –led and demand driven paradigm Institutional development and co-ordination Regulatory framework Environment Issues Governance issues Human capacity