- E & S
- ACADEMIC CORNER
The adequate and timely interconnection of GET FiT projects to ensure power evacuation remains as a key risk for several projects and currently represents the single most considerable risk to achievement of GET FiT targets. Moreover, it to an increasing degree represents a risk to the Government in form of potential deemed energy1 obligations.
In 2014/15, development partners agreed to provide additional financial support to strengthen critical grid infrastructure and regulatory capacity for effective evacuation of power generated by the GET FiT projects.
Investments implemented under GET FiT governance
As part of their overall commitment to the GET FiT Program, UK DFID has contributed a GBP 14.7 million grant to address urgent grid investments, combined with comprehensive technical assistance to ERA. All the infrastructure investments are under full implementation and currently at procurement stages. Construction for these interventions will commence at full scale in 2017. The projects are summarized in the table below.
Table 2 Critical grid infrastructure investments and TA implemented under GET FiT governance
The current status of the different components presented in the above table is as follows:
33 kV Upgrades in Western Uganda
GoU through KfW has received funding from UK’s DFID for the upgrade of selected 33 kV lines necessary for the grid integration of four GET FiT projects in Western Uganda, as identified by the power sector joint task force. The REA, through KfW, has procured the services of Consultant Sweco in 2016 to design and supervise the implementation of the lines. Sweco has kicked off the project and is currently undertaking technical and environmental surveys towards the design and construction of the lines. The upgrades are expected to be ready in 2018.
The Opuyo substation was identified as a key substation for the development of the vast solar power potential in the East, including the just commissioned Soroti solar project. Additionally, the substation has reliability constraints due to the fact that it has only one transformer. Upgrades are required to improve the grid stability and security by providing transmission infrastructure with adequate flexibility. GoU through KfW has received funding from UK’s DFID to upgrade the substation. A tender agent has been procured by UETCL with support from KfW, a supervision consultant has been selected and procurement is currently ongoing for the EPC contractor.
TA Support to ERA
The TA support to ERA was aimed at building the capacity of the regulator to effectively implement interconnection agreements for new small renewable energy projects, and to monitor the compliance of licensees with regulatory requirements. The support has involved two main components, both initiated in 2016. The first was the development of an Interconnection and Wheeling Agreement, which was awarded to Intec GOPA in June 2016. This TA is aimed at addressing the technical requirements for the interconnection of small-scale generators, which are insufficiently covered by the existing grid code, and to develop a wheeling agreement for power evacuation through intermediate networks to the transmission grid. The Consultant held a consultative workshop in January 2017 and the final deliverables are expected end of February 2017.
Stakeholder workshop by Intec GOPA on the Interconnection and Wheeling Agreement TA at Golf Course hotel, Kampala (source: GET FiT)
The second TA component targeted the Optimization of Compliance Monitoring of Distribution and Transmission Licensees and Regulatory Capacity Building. The overall objectives for this TA were to equip ERA staff with the procedural, technical, economic and environmental competence to perform its mandate as regulator of the transmission and distribution sub-sector in line with international best practice and to establish licensing and performance monitoring processes for all present and future transmission and distribution licensees. The consultancy was awarded to the joint venture between Azorom, Fichtner and Kaizen Africa in November 2016. The consultant held a kick-off meeting in December 2016 and the assignment is well underway.
Finally, ERA and GET FiT are currently developing a new technical assistance component to implement a modern regulatory IT system for ERA. This has been identified by the Authority as a key need in adopting and institutionalizing their increasingly comprehensive regulatory framework and competence base, and to make their general operations more effective and efficient.
Other key grid investments supported by development partners
In addition to the above listed interventions, the World Bank and the Government of Germany have committed to provide financing towards implementation of critical grid infrastructure (subject to positive appraisal), as presented in the table below:
Table 3: Other grid investments supported by development partners
A brief description and status update on implementation of these interventions is provided below.
The Nkenda substation in Kasese is pivotal to the electrification of Western Uganda and for the power evacuation of existing and pipeline small hydro power projects in the area. Six GET FiT projects with a cumulative generating capacity of 48 MW will be evacuated through Nkenda substation. Three of the projects are already under construction, with one expected to reach COD in mid-2017. With a current capacity of 40 MVA, the substation will need to be upgraded to cater for the new and pipeline projects. The World Bank has secured funding for the required upgrade of the substation from 40 to 120 MVA for this purpose.
Based on the planned commissioning of GET FiT projects, implementation of the Nkenda substation reinforcement must be maintained as a key priority in order to minimize deemed energy obligations. The latest updates are as follows:
The selection of the supervision consultant by UETCL is complete, pending approval of the World Bank. UETCL implementation timeline foresees 9 months procurement and 18 months construction. Realistic best case is mid-2019, so deemed energy risk remains high.
Mbale – Bulambuli Transmission Project
The new 132 kV Mbale – Bulambuli transmission line will be required for the efficient evacuation of the Siti 1 and 2 HPPs (23 MW) and other pipeline projects in the area. KfW through EU ITF has secured funding for the feasibility study of the line and UETCL has procured a consultant to undertake the study. Given the long lead times for the transmission line construction, the government, through ERA and REA, approved the implementation of an interim 33 kV solution to enable timely evacuation of Siti 2, which is currently under construction. However, the interim solution does not allow for full power evacuation from the Siti projects, and therefore is only valid for a limited period of time. Once the validity of this solution expires, the 132 kV line must be in place to (again) avoid future deemed energy obligations on GoU. As the study for the 132 kV permanent solution is currently behind schedule, this needs to be fast-tracked in order to avoid the latter.
The UETCL Nkenda Substation is a key component for adequate power evacuation of GET FiT hydropower projects in Western Uganda. (Photo: GET FiT)
It should be noted that this report only mentions (donor funded) investments directly related to evacuation of GET FiT projects, but that several other critical investments in transmission infrastructure are ongoing. For example, the ongoing construction of the 220 kV transmission line from Nkenda to Hoima will be important for the stable evacuation of projects in Kasese and Hoima areas. Additionally, REA and Umeme will finance and construct a number of 33kV lines to interconnect GET FiT projects to the national grid.
Although comprehensive efforts are being made by GoU and GET FiT development partners to fast-track critical grid investments, the interventions are generally behind schedule with respect to planned commissioning of the GET FiT portfolio. Continued efforts are thus crucial to avoid further delays. More details on how GET FiT addresses these challenges are provided under Program Monitoring & Risk Management.
4 Deemed energy is energy which could have been produced at a generating facility but is not due to insufficient grid capacity. This represents an income loss to the power plant owner, which must be compensated by GoU.