Over the past decade, East African countries have sunk billions in multibillion-dollar investments building power plant stations to power the region which for years had been engulfed in darkness.
While the idea was noble, the power games have come with a price.
Ethiopia, Kenya, Uganda, Tanzania and Rwanda are now stuck with excess capacity that could see the countries incur heavy financial burden.
Currently, electricity surplus in the region stands at 878MW, with only Tanzania and Rwanda experiencing a deficit. The surplus power is projected to hit 3,430MW by 2025.
The region had a noble plan setting up these power plants and so the exercise was not in futility, something, however, along the way seems to have gone amiss.
Apart from national priorities, the investments in power generation were driven by the understanding that the region will be a single power market interconnected through the Eastern Africa Power Pool (EAPP).
The EAPP would then connect with the Southern and West African markets, effectively transforming Africa into an integrated power trade market.
Once complete what was once described as the ‘dark continent’ was supposed to light up to high heavens, the picture on paper looked rosy even to the blind.
An analysis by the US government-led Power Africa Initiative, for instance, indicated that Ethiopia, whose installed capacity stands at 4,206MW against a demand of 3,700MW, has the potential to earn over $200 million in power exports to Tanzania over the next four years.
Tanzania, currently experiencing a deficit of 485MW, on its part could save up to $500 million by substituting its expensive emergency power with cheap imported electricity.
The Uganda-Rwanda line, the study notes, would save Rwanda $1.3 million to $2 million per month — money being spent on diesel generation — in 2019-2020. Rwanda currently experiences a deficit of 13MW.
The savings represent about 15 per cent of the Rwandan utility’s monthly spend on energy.
Trouble, however, started when the regional project was hit by delays leading to fears that countries could suffer heavy financial burden servicing electricity generation plants that cannot produce to full capacity.
Experts say that failure to accelerate regional interconnection to facilitate the power trade puts countries with excess power in a precarious situation due to charges that come with idle capacity.
“It is unfortunate that consumers are unable to utilise all the electricity produced because sectors like manufacturing have not expanded in tandem with generation,” said Lamarck Oyath, managing director of renewable solutions firm Lartech Africa.
Key projects that were expected to anchor electricity trade, particularly the Ethiopia-Kenya-Tanzania high-voltage lines, are behind schedule, which has denied countries with excess capacity the opportunity to trade in power and those with deficits to bridge the gap.
In Kenya, for example, the World Bank declined to guarantee the 310MW Lake Turkana Wind Power (LTWP) due to the country’s weak grid, delays in completing the transmission line to evacuate the power, and concerns over the country’s ability to absorb all the power.
Now, LTWP has admitted that the wind farm in Turkana County in the north cannot generate optimally, with maximum generation capacity set at 65 per cent, yet Kenyan taxpayers had to pay a fine of $52.5 million after the government failed to complete the transmission line.
In Kenya, power generation capacity stands at 2,250MW, against a demand of 1,640MW.
Uganda has since joined the list of countries with excess power following the commissioning of the 183MW Isimba hydropower dam, which pushed the country’s power generation capacity to 1,167MW, way above a peak demand of about 600MW.
Ethiopia and Kenya will have excess capacity, reaching as high as 1,900MW for Addis, when ongoing projects start generation.
Rwanda and Tanzania will also have peak surplus when ongoing projects come on-stream.
Overall, East Africa’s peak supply that stood at about 7,800MW last year is expected to grow to about 17,800MW by 2025, with a peak demand of about 7,000MW growing to about 14,400MW.
Moving forward, power experts are now only strictly funding priority transmission lines to avoid this power paradox.
Power Africa Initiative, a US Government-led partnership coordinated by the U.S. Agency for International Development, is now working to mobilise at least $3 billion to help finance priority transmission lines to facilitate electricity trade in Africa.
“Unused power generation facilities result in lost opportunities and lost revenues for governments,” notes the Power Africa Transmission Report.