Thursday, December 8, 2016

Don’t overcharge clients, power developers warned

HENRY LYIMO
RENEWABLE energy power developers providing mini (off)-grid electricity in rural areas should not milk their customers through overcharging as the move would render the idea of attracting the private sector in power generation irrelevant, a senior government official has warned.

Dr Juliana Pallangyo, Deputy Permanent Secretary in the Ministry of Energy and Minerals, said in Dar es Salaam yesterday that the government understood that mini-grid developers need to set up tariffs that will help to them recoup investment costs but there were some who charge too high tariffs making it too expensive to end users.
“Some are charging too high tariffs which makes electricity very expensive. We remind them they need to make sure their electricity is affordable to the users,” she said during the opening of a two-day Africa Energy Forum.
Off the Grid conference has drawn together key players in the energy sector to deliberate on investment opportunities in the lucrative sector.
She said the government is keen to support renewable energy power developers interested in installing mini-grid technologies, suitable for deployment of systems such as solar, wind and small hydro suited for communities in off-grid areas to increase electricity connectivity in the country.
Tanzania is among East African countries that have adopted renewable energy technologies including solar, geothermal and wind power as it implements a national energy policy whose goal is to increase the country’s overall electricity connectivity to 50 per cent by 2025 and to at least 75 per cent by 2033.
The National Rural Electrification Programme (2013– 2022) under which the policy is implemented, includes both ongrid and off-grid solutions. Mini-grids are the most economically viable means for electricity connection in rural areas not served by the national grid but there are concerns of high tariffs charged to customers which must be addressed, said Dr Pallangyo.
“There is no doubt minigrids make more sense than grid extension in large parts of the country, but some developers have very expensive tariffs,” he noted.
The Minister of State in the Vice-President’s Office (Union Matters and Environment), January Makamba, said high power tariffs charged by some mid-grid developers were a serious cause of concern as it defeated the whole purpose of inviting private developers in energy generation.
He said as the idea of hybrid mini-grid systems technology was the most economically viable and relevant to increase access to electricity, some developers were using flimsy excuses to cash in from the poor rural dwellers.
He gave an example of a rural area where he saw a developer charging 500/- per one bulb per day, saying such high tariff could not be justified and make mockery of the intention to increase electricity connection through private investments.
About 200 investors, facilitators and off-grid developers are attending the conference organised by EnergyNet Limited to unleash investment opportunities in the energy sector, as the government adopted renewable energy technology to scale up electricity connectivity to the people.
The Business Development Director of EnergyNet Limited, Alex Moulds, told the `Daily News’ that the conference had focused on off-grid and minigrid energy project opportunities in Tanzania, where small scale renewable investors have already ventured in a far more dynamic and profitable way than ever before.
He said they were thankful to the government, ministry of energy and minerals and institutions under it for the great support in organising the conference which are aimed at facilitating investments in the energy sector.
“We always have the support of the Tanzania’s government, Minister, TANESCO, EWURA (Energy and Water Utility Regulatory Authority) and REA (Rural Electrification Agency).

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