This CAI paper discusses the tangible benefits that hydropower has brought and could still bring to East Africa. It also considers how hydropower, particularly small hydro projects, can improve rural electrification and access to electricity, and the institutional, environmental, and infrastructural challenges to large and small projects.

The African continent faces the same immense challenges as the rest of the world - ensuring security of energy supply, nurturing economic growth, and meeting environmental obligations such as reducing carbon emissions. Hydropower is one means which can help achieve these goals. It is a means to power African industry and boost gross domestic product (GDP), to electrify rural areas and improve quality of life, and supply the increasing demand for reliable energy. Africa has 27% of the world’s hydropower potential and 93% of Africa’s hydropower potential remains unexploited.⁽²⁾ Due to the fortunate presence of the River Nile, numerous river basins, and a vast coastline, several nations in East Africa have long relied on hydropower to fuel the energy needs of their populations and economies. Indeed, East Africa’s hydro potential of more than 6,000 megawatts (MW) could supply the entire region’s electricity needs at current peak demand of 2,500MW.⁽³⁾

Hydropower and East Africa

Hydropower has long been the pillar of East Africa’s energy production capabilities. Indeed, the majority of electricity produced in the region comes from hydropower, and it is expected to provide 79% of East Africa’s total new additional generation capacity.⁽⁴⁾ However, environmental and institutional challenges to harnessing the region’s hydropower production potential remain, including drought, carbon issues relating to reservoirs, the need for capital investment, a lack of technical expertise in formulating energy plans and feasible projects, and perhaps a misguided focus on large-scale projects.

On the other hand, hydro projects have benefitted, and can continue to benefit, from private sector investment and foreign donors. East African countries are an attractive area for such investment; the region has maintained a fast growth trajectory despite experiencing severe drought and famine. The region registered 5.8% GDP growth in 2011, and 6% in 2010.⁽⁵⁾ Indeed, much of Uganda’s growth came from increased Foreign Direct Investment (FDI) in its energy sector.⁽⁶⁾ Furthermore, Africa’s hydroelectricity production costs are the lowest in the world.⁽⁷⁾

Several factors make hydropower development an attractive option. Hydropower’s storage capacity and fast response characteristics are especially valuable to meet sudden fluctuations in electricity demand.⁽⁸⁾ It also has the ability to provide fast and cost effective system regulation with minimum energy loss and equipment wear. Hydropower developments may be designed to be multi-purpose and include flood control, irrigation, potable water supply, navigation, reservoir recreation and fishing, as well as a host of additional tangible benefits.⁽⁹⁾ Due to drought and crop failure, wise management of the water in rivers and lakes has become essential to East African nation building. To this end, integrated water management can be applied to dams and reservoirs so that rivers flow throughout the course of the year.⁽¹⁰⁾ Furthermore, the capacity of many existing hydropower plants could be increased by 5-20%. Refurbishing projects may be more cost effective and environmentally benign than building new plants.⁽¹¹⁾

Small hydro – the way forward

‘Hydropower’ normally conjures up images of majestic dams, large reservoirs, and rivers cascading down mountains into deep pools below. However, this is not always the case and medium, small (less than 10MW), and micro (less than 100kW) hydro are now viewed by many as more viable alternatives to large scale projects for a number of reasons. Small hydro schemes are among the most environmentally friendly available as they are normally ‘run-of-the-river’ designs and do not alter river flow dramatically. Perhaps the greatest advantage of small hydro is its capacity to electrify isolated communities, giving small local businesses the tools to upscale and, of course, dramatically improving the inhabitants’ quality of life. Furthermore, large hydroplants are often environmentally unsustainable, have high transmission costs, are located far from grids, and have high initial capital and startup costs. Small and micro hydro have low capital requirements. For example a 6kW system (large enough to drive an electric mill and provide light for a community of 500) would cost approximately US$ 7,800.⁽¹²⁾ Thus, the private sector may compete in supplying electricity to rural populations and developing projects. Indeed, most of the World Bank funding for hydro projects goes to small hydro.⁽¹³⁾ Moreover, few rivers can suitably supply large facilities. On the other hand, East Africa has many smaller rivers, which do not suffer in times of drought and can continuously supply power.⁽¹⁴⁾

A fine example of micro hydro’s success in rural communities is the Tungu-Kabri Micro-hydro Power Project. A joint development by the non-governmental organisation (NGO), Practical Action East Africa, and the Kenyan Ministry of Energy, and funded by the United Nations Development Programme (UNDP), the 18KW project benefits 200 households in the Mbuiru village river community.⁽¹⁵⁾ The facility alleviates the environmental problems associated with using wood (deforestation) and dung for cooking, diesel for milling and kerosene for lighting. Following assessment of the site and river flow records, the project was constructed by villagers who laboured together every Thursday for two years until the project finally came to fruition and was operational.⁽¹⁶⁾

East African Governments are increasingly taking notice of small and micro hydro. Uganda and Rwanda have programmes in place specifically to encourage private sector sponsorship of such projects, with Uganda injecting an extra 30MW into the grid through this method. Kenya’s state energy company, KenGen, operates seven mini-hydro stations in various parts of the country, built by Europeans before independence (1920s - 1950s). However, the potential of small hydro has yet to be fully recognised. Overall, considering falling precipitation levels and changing weather patterns, a shift to micro and small hydro is advisable. Mini hydro has a particular advantage in that it is suitable for private sector investment and can be used in decentralised areas. Small hydro would also save Governments money by not paying for expensive emergency power when large plants fail due to drought. In terms of profit margins and large business practices, large hydro does provide a more economical incentive per US$/KW but from an energy security perspective and with a view to rural electrification, small hydro is a preferable and more sustainable way forward.

Local communities and the environment

Hydropower projects should benefit local communities throughout the project life cycle, in both monetary and non-monetary terms. Ecosystems depend on the nearby rivers for their survival as communities do for their diet and livelihoods. Diverting a river from its course threatens to take away their potable water supply and flooding large areas can remove arable land for farming. However, dams and reservoirs which are properly located in the river basin do not alter the natural geometry of the river and their discharges enhance water quality, maintain daily quantities of river flow for local use, and the year-round flow helps combat drought.

Often Governments and developers can appear unsympathetic to the concerns of local communities. For example, residents at Rusamo Falls, Rwanda, had to plead with officials and consultants to be informed of the process of the proposed 90MW hydropower project.⁽¹⁷⁾ Rural communities are often not connected to the grid and sometimes even displaced communities do not receive adequate compensation or access to the electricity a project creates. Furthermore, large hydro projects are often located in culturally important places and people sometimes refuse to leave.

The guidelines from the United Nations’ (UN) World Commission on Dams states that hydropower projects should follow environmentally correct procedures. The International Energy Agency (IEA) also has its own guidelines for large hydro developments, including those of enhancing economic equity among citizens, protecting the lives and property of citizens from floods and droughts, securing the rights of citizens with respect to expropriation of land to be inundated, and protecting the environment concerning air, land, water and biodiversity. The IEA also correctly observes that these objectives “bring major hydropower decisions into the political arena.”⁽¹⁸⁾

The hydro station in Murchison Falls National Park in Uganda provides a good example of the environment versus economics debate presently raging with regard to hydropower development. Murchison produces the second lowest unit cost of energy in the country, making it one of the most economically attractive options for development. However, Murchison Falls is regarded as a heritage site for aesthetic and tourist reasons, and downstream flows support wildlife. This makes development a controversial issue and energy developments in Uganda are subject to greater environmental scrutiny than other sectors. One possible solution would be ‘time of day’ regulation, meaning greater flows for aesthetic reasons during the day with a partial diversion at night to increase power generation. Indeed it is worth noting that the opportunity cost of not developing Murchison Falls is estimated at US$ 825 million.⁽¹⁹⁾

Institutional challenges and prospects

Proper management of resources and improvement of transmission routes can avoid power shortages caused by drought and eradicate the need to purchase expensive emergency power as was the case, for example, in Kenya in 2008 and Uganda in 2006. The UN recommends improvement of existing plants and collaboration between the New Partnership for Africa’s Development (NEPAD) and Regional Economic Commissions in order to develop transmission infrastructure.⁽²⁰⁾ In addition, renewable energy targets should be included in national energy plans and power purchase plans (PPAs). These PPAs must be attractive so as to encourage the private sector to scale up its renewable plants.

In addition to the need for private investment, a number of institutional and governmental issues hinder the development of hydropower and national energy structures in general. These include a lack of technical know-how in creating energy plans, a limited regional approach to energy challenges and opportunities, and administrations failing to deliver on promises of rural electrification.

There are a number of challenges and objectives are shared by most of the region’s national administrations while a number are specific to individual countries. Most administrations face the challenge of increasing public access to affordable and reliable energy supplies to address poverty issues. Most also carve out a place for renewable energy in these plans. An overall policy objective for Uganda is to increase the use of renewable energy from the current 4% to 61% of total energy consumption by 2017.⁽²¹⁾ Ethiopia too has aspirations for the country’s renewable, and particularly hydropower, potential. The Ethiopian Ministry of Mines and Energy states in its energy policy that it will “give high priority [to] hydropower resource development.” It also promises to “pay close attention to environmental issues during development of energy projects” and “provide the private sector with the necessary support and incentive to participate in the development of the country’s energy resources.”⁽²²⁾ However, experts acknowledge Ethiopia’s shortage of qualified personnel for formulating policy for the energy sector, which is a problem for most administrations.

Kenya provides an interesting case study and lessons learnt can be applied to other administrations. The country makes provisions for developing hydropower under its global Scaling-Up Renewable Energy Programme (SREP). The investment plan includes provision for small hydropower projects with a combined capacity of 1,000MW to foster development of remote communities and economic activities.⁽²³⁾ However, from a broader perspective there are considerable weaknesses in Kenya’s energy planning and institutional capacities.

A United Nations Environment Programme (UNEP) assessment of Kenya’s energy processes found weakness in the budgetary process (Ministries may spend beyond approved figures), lack of technical expertise and personnel, inadequate stakeholder consultation, periodic institutional mergers and separations of Ministries, ineffective inter-ministerial coordination due to individual policy agendas, vested interests and undue influence of large public and private players, and the high cost of detailed assessments. The assessment also reported that a persistent weakness of the policy process has been the lack of institutionalisation leading to the pursuit of self-interest and a personality driven process.⁽²⁴⁾ There are considerable linkages between Kenya’s energy policy and the Economic Recovery Strategy (ERS) as well as environmental policies, yet little or no integration with other sectoral policies. However, there are ongoing positive efforts that need to be encouraged. These include increasing transparency; increasing consultation in policy formulation; improved budgetary process, donor coordination and support; and strengthening the voices of different stakeholders. Other efforts include the Energy Bill 2006 calling for greater political commitment and granting legal backing for planning and public participation.

There is potential for national administrations to combine their efforts to share expertise and alleviate risk from energy shortfalls. The East African Power Master Plan (EAPMP) provides the basis for coordinated power supply efforts between East African nations under the leadership of the East African Community. The Plan lays out a 20-year programme beyond 2015 for investment in the energy sector, with clear objectives and targets, to meet the expected growth in demand for power.⁽²⁵⁾ The EAC and the Eastern Africa Power Pool (EAPP) are also developing a Regional Power Master Plan and Interconnection Code to take account of developments since the EAPMP was completed in 2005.⁽²⁶⁾ The master plan is concerned with sustainability of power in the region. Emphasis will be put on increasing the energy mix in order to extend the lives of the region’s powerhouses, the hydro plants. Geothermal in Ethiopia and Kenya and thermal in Uganda have been identified as contributors. However, the environmental issues could delay implementation even of the least costly developments and need to be considered upfront. EAPMP also seeks to incorporate the individual country energy plans to a common regional master plan.⁽²⁷⁾ The EAPP is expected to commence market operations in January 2013.⁽²⁸⁾

Future Eastern Africa Power Pool connections (Fig 1) ⁽²⁹⁾
 

Concluding remarks

The potential of hydropower, particularly small hydro, to transform the energy sector and support growth and development in East Africa is clear. In addition to improving energy access and electrifying rural communities, the abundance of hydropower in the region can also boost industry. The large focus on hydropower production needs to be accompanied by an equally large emphasis on hydropower consumption. This will alleviate reliance on emergency power and imports of fossil fuels, and foster rural electrification.

Considering environmental concerns, the increasing frequency of droughts, the difficulties in connecting rural communities to the power grid and availability of finance from institutions such as the World Bank, small and micro hydro initiatives should receive greater support from East African Governments and the EAC. In doing so, the livelihoods and quality of life of entire villages can be dramatically changed for the better. Donors and developers, international organisations in particular, must ensure that funding goes to worthwhile projects and ensure that correct environmental procedures are followed in the development of large projects so that Governments developers do not simply pay lip service to environmental or policy concerns. Transparency in development processes and inclusion of all stakeholders in consultations would help alleviate concerns of local residents. There also need to be plans for sustainable jobs after construction is complete.

While most Governments show little intention of moving away from grandiose iconic dams for power generation in favour of smaller more practical projects, it would be advisable for them to diversify their energy mix with renewables (small hydro, biomass, geothermal, wind) in order to meet carbon-cutting requirements and environmental concerns of conservationists and local communities, and to develop a sustainable energy source for the future. East African nations should not be too distracted by the discovery of significant reserves of oil and gas in and off the coast of East Africa. The discoveries may promote transmission connections, but in order to achieve sustainability, these should be electricity connections and not solely pipelines for hydrocarbons. The EAC and EAPP must harmonise individual country plans into a regional master plan which works in practice and not only on paper. Ultimately, the Governments of the East African region should recognise that hydropower development, and energy supply in general, is not only about driving industry and GDP, but also about raising standards of living and making people’s lives significantly more comfortable. Under the proper management it certainly has the potential to do so.

Written by Written by Paul Quirke ⁽¹⁾

NOTES:

(1) Contact Paul Quirke through Consultancy Africa Intelligence's Africa Watch Unit (africa.watch@consultancyafrica.com).
(2) Otieno, H. and Awange, J., 2006. Energy Resources in East Africa. SpringerVerlag, London; ‘Directions in Hydropower’, World Bank Group, 2009, http://siteresources.worldbank.org.
(3) Otieno, H. and Awange, J., 2006. Energy Resources in East Africa. SpringerVerlag, London.
(4) ‘ESI’s Hydropower Africa 2010’, Renewable Energy & Energy Efficiency Partnership (REEEP), http://www.reeep.org.
(5) ‘Economic and Social Developments in Africa and Prospects for 2012’, United Nations Economic Commission for Africa (UNECA) Economic Report on Africa 2012, http://new.uneca.org.
(6) Ibid.
(7) ‘Building a sustainable energy future for Africa’, 20th World Energy Conference, 11-15 November 2007, www.worldenergy.org.
(8) ‘Renewable Energy Essentials: Hydropower’, International Energy Agency (IEA), 2010, http://www.iea.org.
(9) ‘Update of Recommendations for Hydropower and the Environment’, IEA Hydro briefing document, October 2010, http://www.ieahydro.org.
(10) International Commission on Large Dams website, http://www.icold-cigb.org.
(11) ‘Renewable Energy Essentials: Hydropower’ International Energy Agency (IEA), 2010, http://www.iea.org.
(12) Browne, P., ‘The Rise of Micro-Hydro Projects in Africa’, New York Times, 30 September 2009, http://green.blogs.nytimes.com.
(13) ‘Directions in Hydropower’, World Bank Group, 2009, http://siteresources.worldbank.org.
(14) Otieno, H. and Awange, J., 2006. Energy Resources in East Africa. SpringerVerlag, London.
(15) Practical Action website, http://practicalaction.org.
(16) Ibid.
(17) Musoni, E., ‘Rusumo residents in the dark over power project’, The New Times, 31 January 2012, http://www.newtimes.co.rw.
(18) ‘Renewable Energy Essentials: Hydropower’, International Energy Agency (IEA), 2010, http://www.iea.org.
(19) ‘East Africa Master Plan Study- Final report’, BSK Acres, www.eac.int.
(20) Kalitsi, E. A. K., ‘Hydropower development in Africa’, United Nations, July 2003, http://www.un.org/esa.
(21) Tumwesigye, R., et al., ‘Key issues in Uganda’s energy sector’, Institute for Environment and Development (IIED),2011, http://pubs.iied.org.
(22) ‘Energy Policy of Ethiopia-Country Paper’, Japan International Cooperation Agency (JICA), May 2011, http://eneken.ieej.or.jp.
(23) ‘Africa’s Hydropower New Project Outlook’, Africa Electricity, 5 June 2012, http://www.africaelectricity.com.
(24) ‘Kenya: Integrated assessment of the Energy Policy’, United Nations Environment Programme (UNEP), August 2006, http://www.unep.ch.
(25) Tumwesigye, R., et al., ‘Key issues in Uganda’s energy sector’, Institute for Environment and Development (IIED), 2011, http://pubs.iied.org.
(26) ‘Progress on Updating the EAC Power Master Plan’, East African Community (EAC), http://www.eac.int.
(27) ‘Africa’s Hydropower New Project Outlook’, Africa Electricity, 5 June 2012, http://www.africaelectricity.com.
(28) East Africa Energy Pool (EAPP) website, http://www.eappool.org.
(29) ‘Future Interconnections in the Region’, East Africa Energy Pool (EAPP) website, http://www.eappool.org.