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Rwanda needs $70m to stem power losses

Saturday October 15 2016
Rwandaenergy2706

Technicians from Rwanda Energy service an electricity pylon in Kigali. PHOTO | CYRIL NDEGEYA |

Rwanda's power transmission and distribution utility Rwanda Energy Group says it will need as much as $70 million (Rwf55.8 billion) to bring down losses in the network currently running at 23 per cent to 15 per cent by 2017.

The bill includes funds required for new transmission lines, substations and rehabilitation of other equipment like transformers installed in the 1970s.

Mr Mugiraneza said feasibility studies have been finalised and upgrading transmission lines around Kigali will start as soon as funds become available.

While new generation capacity continues to come online, the transmission and distribution networks run largely on old substations and transmission lines that need to be replaced, some having been in service for more than 40 years.

Officials say aged equipment accounts for at least 15 per cent of the losses, while commercial losses contribute to between three and eight per cent of the total system losses. This rate falls outside the globally acceptable range of 10 per cent and translates into more than Rwf8 billion ($10 million) annually.

“We are putting up strategies that will help us address mainly commercial losses by reforming our commercial department, smart metres in the network, curb illegal connections as well as people bypassing cash power meters,” said Jean Bosco Mugiraneza, chief executive officer of Rwanda Energy Group (REG).

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Rwanda is in the same bracket as counterparts in East Africa namely Uganda, Kenya and Tanzania whose power loss is way above the global average.

In Uganda, after earlier gains associated with installing prepaid meters, power distributor Umeme has seen power losses increase marginally from 19.1 per cent at the end of 2015 to 19.2.

READ: East Africa electricity firms in bid to reduce power losses

REG said that if not addressed, the gains from the new generation capacity coming onto the grid could be undermined as the country races to have 70 per cent of its population connected to the grid by 2018.

Technical studies conducted on the grid concluded that the losses could rise further after additional generation since the existing network would not cope with the additional load required by new developments in the country.

REG officials said apart from strategies aimed at curbing commercial losses, on-going privatisation of small hydropower plants could pave way for their infrastructure upgrade, rehabilitation as well as production boost.

The persisting power losses are blamed on the disparity between the available generation capacity and the volume that reaches the consumers.

For instance, while operational highlights for the year 2013/2014 indicate that the total electricity supply stood at 531,585,002 KWh, only 340,563,556 KWh was consumed. The country’s total power generation stood at 185 megawatts at the end of 2015.

Nonetheless, Emmanuel Kamanzi, managing director for Energy Development Company, a subsidiary of REG recently told Parliament last week that the disparity could not entirely reflect the power losses given the low demand experienced during the better part of the day and internal consumption.

“The gap between available production capacity and dispatch is due to the demand design because at times we have the electricity power but we can’t sell it because the demand is low,” Mr Kamanzi explained, adding that despite maximum power generation standing at 144 MW, the peak demand only reaches 115 MW.

Meanwhile, REG said it plans to attract more consumers with reduced tariffs whose structure is still under review by the utilities’ regulator.

The losses have in most instances exposed users to power rationing and perpetual blackouts with impact on their economic activities.