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UETCL: Expanding grid network to meet future load [free access]

April 1, 2013

Uganda’s National Development Plan for 2011-15 projects a per capita electricity consumption of 674 kWh by 2015 and 3,668 kWh by 2040. To meet this demand, the country’s power generation segment is striving to rapidly add capacities. Policy steps have also been taken for introducing market orientation in the power sector, the most important of them being the unbundling of generation, transmission and distribution segments. To meet the policy objectives of rural electrification and generation capacity addition, there is a renewed focus on the expansion and reinforcement of grid infrastructure. Transmission infrastructure and bulk power transactions are the mandate of the Uganda Electricity Transmission Company Limited (UETCL).

 

UETCL came into being in 2001, as a result of the restructuring of the Uganda Electricity Board. The state-owned company has the mandate of operating and managing the country’s high voltage transmission system and functioning as the system operator. Further, under the single-buyer model of power purchase in Uganda’s power system, UETCL undertakes bulk power purchase and sale in the market through power purchase agreements with generating companies. The company operates under the policy directions of the Ministry of Energy and Mineral Development. It is subject to the regulatory oversight of the Energy Regulatory Authority (ERA) for key areas such as tariff determination.

 

Table 1: UETCL’s transmission line length (km)

Year

66 kV

132 kV

220 kV

Total

2010

                         48

                    1,131

                         -  

                    1,179

2011

                         48

                    1,131

                         -  

                    1,179

2012

                         48

                    1,419

                         75

                    1,542

Source: Energy Regulatory Authority, Uganda

 

As of June 2012, UETCL’s transmission infrastructure comprised a total line length of 1,542 km. For the most part, the transmission network has been operating at the 66 kV and 132 kV levels. However, with growing demand and UETCL’s initiatives to upgrade capacity, higher voltage ratings are being introduced in the system. This is observed in the emergence of 220 kV lines in the UETCL network. The company’s infrastructure also includes cross-border interconnection lines. These are 132 kV transmission links with Kenya and Tanzania.

 

There is also a significant thrust on improving grid efficiency. This is highlighted by the fact that losses declined from 5.76 per cent in early 2008 to about 4 per cent by the end of 2010. The latest reports on UETCL’s investment plans indicate that the utility seeks to maintain the loss levels at 4 per cent, while it engages in system expansion.

 

Figure 1: Trend in UETCL’s transmission losses

tso_438 

Source: Energy Regulatory Authority, Uganda

 

Table 2: UETCL's cross-border interconnections

Interconnection

Voltage (kV)

Length (km)

Lessos (Kenya)–Tororo (Uganda)

                       132

                       117

Masaka West (Uganda)–Bukoba (Tanzania)

                       132

                         85

Source: Global Transmission Research

 

Under regulatory directions, UETCL’s tariffs are to be determined under an incentive-based regulation. This is being introduced for the first time to determine bulk supply tariffs as per market principles. As per this mechanism, the company has to achieve defined targets in system performance, and is responsible for the ‘controllable costs’ of the business, such as transmission losses, and operations and maintenance costs. At the same time, UETCL will be compensated for the ‘uncontrollable costs’ arising from its role in power purchases, due to rise in fuel prices, general inflation, exchange rate fluctuation, etc. The control period for this mechanism is 2013-15.

 

As per the methodology prescribed by ERA, UETCL has estimated costs at UGX3.7 trillion for the three-year period. This includes allocations for investments, operations and other categories of bulk power dispatch as well as power purchase from generators. The company has assumed technical losses in transmission at 4 per cent during this tariff period. Some of the key factors adding to the overall costs include depreciation of domestic currency against major traded currencies especially the US dollar, delays in disbursement of entitled subsidies from the government, the regulator’s rigidity in operation and maintenance costs in the face of volatility in prices, and long lead time of procurement in certain activities. With the revised tariff regime, there will be automatic adjustments on a monthly basis, to reflect the change in cost parameters.

 

Parallel to the measures for remunerative tariffs, the regulator has also introduced guidelines for investments undertaken by transmission and distribution licensees. The guidelines, notified in March 2013, are aimed at ensuring tariffs and reflect prudent and reasonable costs of capital investments in the network. For investment approvals, licensees are expected to submit key details such as determining lifecycle cost of investments, technical and financial sequencing, operation and maintenance costs, and environmental implications among others. The guidelines also provide for a time-bound process of investment approval—the approving authority is supposed to communicate its decision within 45 days of submission of a complete plan.

 

Projects and Investments

UETCL plans to spend USD419.4 million over the next five years to improve the existing transmission infrastructure to meet the increasing load requirements. The proposed investments are in line with the country’s National Development Plan, which aims to improve power services in order to ensure national growth and prosperity. The expansion plan involves doubling UETCL’s existing high voltage line length to almost 3,000 km. As a first step, the government has identified select major projects for building up the infrastructure. These involve 780 km of line length addition at the 132 kV and 220 kV levels, to act as a backbone for the power distribution and rural electrification initiatives. The identified projects are the Mbarara–Nkenda (160 km, 132 kV), Tororo–Lira (260 km, 132 kV), Nkenda–Fort Portal–Hoima (223 km, 220 kV) and Kawanda–Masaka (137 km, 220 kV) transmission lines.

 

In April 2012, Uganda and the Norwegian government signed a USD54 million financing agreement for the construction of the Nkenda–Hoima transmission line. The project involves the construction of a 223-km, 220 kV double-circuit transmission line to evacuate hydropower generated in the region. The project is divided into two parts. Part I involves construction of the transmission line, while Part II involves construction of the 132 kV Hoima, Fort Portal and Nkenda substations. The project is expected to be commissioned by end-December, 2017.

 

UETCL recently completed the USD228 million Bujagali interconnection project and plans to initiate construction on the 220 kV Bujagali–Lessos and Mbarara–Mirama lines. All these transmission line projects are part of East Africa’s regional grid development initiative, which aims to interconnect the entire regional grid to enhance grid stability and reliability. The projects will allow the grids of Uganda, Kenya, Tanzania, Rwanda and Burundi to be interconnected.

 

During 2012, UETCL also completed routine grid maintenance of 1,553.6 km of transmission lines, 17 substations, supervisory control and data acquisition (SCADA) systems as well as protection, control and metering systems. The company also augmented transformer capacity to improve reliability and implemented re-conductoring of ageing transmission lines to improve capacity. Projects to improve communication systems were also undertaken. These included implementing cross-border fibre optic connectivity at the Uganda–Kenya border to support the interconnection lines, connecting the new substations at Bujagali and Kawanda to SCADA systems and implementing voice over internet protocol systems, which reduced telephony and communication systems by 50 per cent.

 

Table 3: UETCL’s upcoming projects

Project

Objective

Implementation period

Kinyara– Hoima 132 kV transmission line

Provision of transmission capacity to evacuate power

2012-2016

Owen falls–Namanve–Kampala North transmission line upgrade

Improvement of quality, reliability and availability of supply

2012-2015

Nkenda–Kabulasoke–Mutundwe 220 kV transmission line

Improvement of reliability and quality of power supply

2012-2017

Nalubale–Lugazi 132 kV transmission line

Improvement of quality, reliability and availability of supply

2014-2015

Bujagali–Nalubale 132 kV line (re-stringing with HTLS conductor)

Improvement of quality, reliability and availability of supply

2014-2015

Gulu–Kitgum 132 kV transmission line and Kitgum substation

Improvement of reliability, availability and quality of power supply

2013-2017

Kabulasoke–Kiganda transmission line

Improvement of reliability, availability and quality of power supply

2012-2017

Karuma–Tororo 400 kV transmission line

Improvement of reliability, availability and quality of power supply

2013-2020

Namanve–Luzira 132 kV transmission line (31 km)

Improvement of reliability, availability and quality of power supply

2012-2014

Nalubale–Namanve 132 kV transmission line: Mukono tee off (5 km)

Improvement of reliability, availability and quality of power supply

2012-2014

Nalubale–Tororo 132 kV line: Tembo Steels Ltd tee off (12 km)

Improvement of reliability, availability and quality of power supply

2012-2014

Karuma–Nimule–Juba (Sudan) 400 kV line (Uganda's part of 190 km)

Regional power trade

2013- 2017

Source: UETCL

 

Cross-border Interconnection Projects

Under the Nile Equatorial Lakes (NEL) interconnection project, Uganda will be establishing the transmission connectivity to facilitate power transfer with several neighbouring countries. The NEL interconnection project entails the construction and upgradation of 769 km of 220 kV and 110 kV lines and 17 transformer stations to interconnect the electric grids of the five NEL countries, namely, Burundi, Kenya, Uganda, the Democratic Republic of Congo (DRC) and Rwanda. The project is a part of the Nile Equatorial Lakes Subsidiary Action Program (NELSAP), which is one of two investment programmes under the Nile Basin Initiative (NBI). NELSAP aims to promote investments in power development and trade, water resources management, management of lakes, fisheries and watersheds, and agricultural trade and productivity.

 

The proposed interconnection lines include the 256 km long Uganda (Jinja)–Kenya (Lessos) line, the 172-km long Uganda (Mbarara)–Rwanda (Kigali) line, the 112 km long DRC (Ruzizi 1)–Burundi (Bujumbura) line, the 150 km long DRC (Ruzizi 1)–DRC (Goma) line, the 19 km long DRC (Kiliba)–Burundi (Bujumbura) line, the 200 km long Rwanda (Kibuye–Gisenyi)–DRC (Goma)–Rwanda (Gisenyi–Kibuye) line, and the 142 km long Rwanda (Kigoma)–Burundi (Gitega) line.

 

In July 2012, Kenya Electricity Transmission Company (KETRACO) invited international bids for the construction of Kenya’s portion of the Kenya–Uganda power interconnection project. The NELSAP coordination unit is also assisting the countries in other projects that will help establish the power exchange backbone. In the context of Uganda, this involves a transmission interconnection with DRC. Mobilisation of funds is expected to be finalised by 2013-14, while implementation is scheduled for 2015-18.

 

It has been observed that robustness of transmission infrastructure is among the pre-requisites for the success of NEL projects. As with other countries, this holds true for Uganda as well. For instance, the country needs to upgrade the transmission lines between Kawanda, Masaka and Mbarara, so as to ensure power transfer to Kenya and Rwanda. Notably, UETCL recently invited international competitive bids for the feasibility study and design for a 220 kV Masaka–Mbarara transmission line and associated substations.

 

Table 4: Highlights of the Nile Interconnection Project

 

Burundi

Democratic Republic of Congo

Kenya

Rwanda

Uganda

Total

220 kV line length (km)

206

158

128

351

194

1,037

220 kV substations (new and extensions)

Bujumbura,
Ngozi and
Gitega

Goma and
Buhandahanda
(Kiliba at
110 kV)

Lessos

Shango,
Birembo,
Kibuye,
Gisenyi  and Kigoma

Tororo,
Mbarara  and North
Mirama

Works at 15
substations

Funding (USD million)

                    46.61

                    48.57

                    60.45

                  118.68

                    79.81

                  354.12

Source: Nile News (Nile Basin Initiative), December 2012

 

The way ahead

To augment grid capacity and improve its efficiency, UETCL has budgeted for a capital expenditure of UGX39,127 million between 2013 and 2015. By end-2013, there are plans for executing projects worth UGX14,286 million. While funding does not appear to be a constraint, implementation of the projects will be the key to achieving the desired objectives. Further, the future grid planning exercises will need to factor in a greater share of technology infusion to maximise grid efficiency.

 

(UGX1=USD0.00038)