REG looks to off-grids to realise power generation, access targets
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Rwanda Energy Group (REG) revised power generation and access targets late last year and is now focusing on universal access to electricity by 2024. Government had previously set 2018 as the year by which it should have increased Rwanda’s installed power generation capacity to 563MW and connecting 70 per cent of the households. However, REG is now working on a new phased strategy, which will see all Rwandans access electricity in the next seven years. Eng. Ron Weiss, the REG chief executive, says this is in line with government’s objective of generating and distributing adequate and reliable power countrywide.
In an interview with Business Times’ Peterson Tumwebaze, Eng. Weiss also underlined the importance of fast-tracking industrial development, arguing that it key to the power sector’s growth. The official is confident that through the new phased strategy government will achieve its targets. This will, not only make the country’s energy sector more efficient and profitable, but also support Rwanda’s development efforts.
Tell us about your experience as REG chief executive so far
It is a great feeling to be in Rwanda, working with the incredible people in the energy industry. I am amazed at the support we are getting from both government and development partners which, to me, is a reassurance on achieving our targets.
How would you compare Rwanda’s energy targets with those of Israel?
Israel and Rwanda are almost similar... Rwanda’s installed capacity in Rwanda is around 200MW while in Israel it’s more than 14,000MW.
However, it is important to note that Israel focused more on industrial development from the beginning and, therefore, power generation was driven by the need to supply the sector with adequate electricity.
Rwanda is focusing more on increasing generation…But there is need to spur industrialisation which will in return support the energy sector.
Tell us more about the revised targets and how you plan to achieve universal power access by 2024
We are saying we want to have our plans ready to be implemented whenever need raises. That’s why previous plan targeting 563MW installed power generation capacity and 70 per cent access to electricity by the end of 2018 has been reviewed in favour of the new seven-year strategy.
Overall, we are in a very good position on both side’s generation and connectivity presently. I believe it is only the question of increasing the demand where both government and the private sector should now focus. This is because increasing demand means we can now generate what is required which is very critical for the energy sector to operate sustainably and profitably.
We don’t want to be in a position where we shall have all the power projects on line but when there is no demand. Besides, we have enough power at the moment so there is no need to worry. We will however continue to align the demand and the generation of power, that is why we are not very much focused on the targets but rather on the demand side.
What is Rwanda’s current power connectivity level?
Presently, the country’s power connectivity level is at 42 per cent, but the idea is to achieve 100 per cent access to power in the next seven years.
The strategy is to focus more on the off-grid solutions to be able to achieve the objective. This (off-grid solutions) is very important given the nature of geographical settlement. Besides, we are equally aware that most households consume little electricity therefore it is better to be connected via off-grid.
More so, the cost of on-grid is higher at around $700 for each connection while that of off-grid is only $65, which is why it more advantageous for households to embrace off-grid solutions. Off-grids are also efficient and easy to implement.
We are, therefore, currently compiling a list of cells across the country, will guide our power implementation strategy going forward. With this list we will be able to recommend which areas should be connected to off-grid or on-grid systems. This will also allow us to increase the rate of connection. Currently, 11 per cent of households are connected on off grid and 31 per cent on grids. However, we need to increase the off-grid to achieve 100 per cent. What we are doing at the moment is to try and push higher the demand to give us a reason to implement all the projects.
Manufacturers still complain about lack of affordable and reliable power. What are you doing about this challenge?
The government and private sector players should focus be on how to expand the manufacturing sector because REG is ready to generate the required electricity as soon as need arises. It is important that generation and industrialisation go hand-in-hand. Otherwise, it would be a mistake to generate electricity you will not need. REG is constantly looking at the demand side and is always ready to bring on line more power whenever need arises.
On the issue of ensuring that the country gets affordable and reliable power supply, we are progressing very well on ongoing power projects that seeks to help achieve these objectives. These projects include Rusomo, HAKAN peat power project and Rusizi III, where we are in the process of signing the power supply agreement. We are ready to start on Nyabarongo phase two project (anytime).
Presently, the country’s installed power capacity is slightly over 200MW. However, it is not available all the time because part of it is hydro-power, which is affected by weather vagaries that reduce the amount of power produced, especially during the dry season.
Note that we need to always look at demand and how fast it is growing and then readjust, and align generation accordingly.
You said there currently enough power, but some areas across the country still experience outages. Why is so and what is REG doing to address the problem?
The electricity supply is more reliable presently and we will continue to ensure we achieve the objective of ensuring power supply remains reliable and stable for all.
We have aligned all the projections, including plants by private power developers, to ensure stable power supply. We have equally calibrated our systems, boosted maintenance of the transmission and distribution lines to address the challenge.
Indeed, power cuts have now reduced and the situation will continue to improve going forward. New lines and transformers have been established, for example, we have replaced a transformer around Mount Kigali and Mukungwa locations. We are also working hard to continue improving the network so that we are able to generate reliable electricity supply.
Electricity tariffs are still high compared to rest of the region. Why is this so?
Electricity tariffs were cut last year and we working to reduce them in the future.
We are now focusing on making the company more efficient by reducing the cost of power from independent producers to less than 10 US cents from more than 11 US cents. This will eventually translate to lower electricity tariffs. We are, for instance, are trying to push down the cost of power Rusizi III project from 11 cents to around 8 cents and bellow.
Therefore, as we implement more new projects, we expect the price go down.
Any challenges so far?
The main challenge now is the budget, as you are well aware, we are getting a lot of support from government and development partners but still if we want to do more we need the resources and other challenge’s we will handle internally.
Your 2018 message
We appreciate the ongoing development around the country, we are committed to give better and reliable electricity to all Rwandans and we need the support from all stakeholders including the public.
We are very committed and ready to meeting the new targets and make a contribution towards the economic development of the country.