A newly launched Utilities 2.0 Twaake pilot project unites distributed renewable energy companies in Uganda to provide clean power for all through an integrated energy approach.
Led by Uganda’s largest power utility Umeme, coordinated by Power for All and funded by The Rockefeller Foundation, the Utilities 2.0 Twaake pilot project relies on an integrated energy approach.
Kristina Skierka, Power for All CEO, said: “Neither centralised nor decentralised energy can end energy poverty alone. However, through partnership and leveraging comparative strengths, traditional utilities and innovative DRE companies can create a new frontier in the fight to end energy poverty.”
Only 28% of Uganda’s population can access electricity via the national grid. According to the World Bank, it would take more than 10 million customers for Uganda to achieve universal electricity access. Since the average grid extension connection costs $1,400, if grid extension is the only method of service provision, the required investment would be in the range of $7 billion. This would be nearly 20% of Uganda’s current annual GDP.
The Utilities 2.0 Twaake pilot is designed to at least halve this cost by relying on integrated energy. This combines centralised and decentralised technology including solar home systems, minigrids, grid, and smart grid systems. All are combined into an intelligent and interactive energy network that can deliver customer-centric, clean energy solutions to end energy poverty at the lowest cost, transforming billions of lives faster than isolated approaches.
Using productive use applications to drive energy demand
Selestino Bubungi, Umeme managing director and CEO, said: “Uganda is now facing a challenge of access to clean energy with about half of the population having access, of which 25% are connected to the grid and 26% using off-grid solutions like solar.
“Twaake is coming in to bridge the gap of delivering clean energy to the households. This partnership will ensure that we deliver clean energy to the population in this pilot phase, pick lessons and use it to scale up. The partnership will assist to drive Uganda’s electricity agenda.”
According to recent studies by Duke University and Power for All, connection costs can be reduced by half by reducing upfront capital costs by leveraging a utility’s ability to access cheaper capital while increasing the value of the customers through productive use applications which drive energy demand.
Through this integration, electricity customers in Uganda will derive more benefit for each kilowatt of energy consumed. This will create more opportunities for business, education, health, safety, and overall quality of life.
Moving beyond providing only access to energy, to deliver employment
The integrated energy pilot has been deployed across two sites – Nyenje (grid) and Kiwumu (non-grid DRE site). The grid-connected Nyenje has been operational since July 2020 with more than 26% of business to date receiving income generating assets for the purpose of productive use of energy.
Businesses that received asset financing increased their electricity consumption by more than 50% and business revenues have increased by more than 70%.
At the non-grid DRE pilot site a 40kWp minigrid was deployed in Kiwumu in the Mukono district to power 300 households and 60 local businesses.
More than 50% of the businesses in Kiwumu will receive asset financing to help businesses with productive use. By helping customers move beyond access with appliance financing and financial literacy, the pilot project expects to deliver employment and improve incomes across both villages.
Ugandan integrated energy pilot to eventually expand to rest of country
The Utilities 2.0 Twaake pilot sees Uganda join a growing global network of integrated initiatives meant to accelerate access, drive demand and improve overall energy system performance.
Makerere University, several Ugandan companies and Power for All will evaluate the socio-economic benefits of integrated energy and the effectiveness of the business models being tested. The entire consortium will work with the Government of Uganda to achieve Uganda’s first successful interconnected minigrid in June 2022 and identify approaches to replicate and scale so as to accelerate energy access.
Eng. Cecelia Menya the Acting Director Energy Resources of Uganda’s Ministry of Energy and Minerals Development emphasised the importance of public-private sector partnership in development of the energy sector and highlighted the Government’s keen interest to learn from the lessons of this year-long integrated energy pilot project to extend the technology to other parts of the country.
No access to electricity limits ability of people to be part of the economy
In addition to Umeme, the Utilities 2.0 project in Uganda also involves several private sector companies and other leading organisations, including Africa Mini-Grid Developers Association (AMDA), CLASP, CrossBoundary, East African Power, EnerGrow, Equatorial Power, Nxt Grid, Rocky Mountain Institute (RMI), University of Massachusetts Amherst, Duke and Makerere Universities.
Joseph Nganga, The Rockefeller Foundation’s Executive Director for Power & Climate in Africa, said: “Our mission is to rapidly expand access to clean, reliable electricity that empowers people across Africa.
“Without electricity, there is no access to the tools that power business and only limited access to modern healthcare or education. Together with Umeme Limited, Power for All, Equatorial Power, Energrow and East African Power we have a chance to advance a new vision for more rapid and inclusive economic development that lifts millions out of poverty; the commissioning of the first interconnected mini-grid project in Uganda is an important step in our shared mission,” said Nganga.