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Low tariffs discourage investment in power sector

Low tariffs discourage investment in power sector

It also notes that with an electrification rate of 14 per cent, the income redistribution effect of the subsidy is directly regressive - to the benefit the richest households. "If the manufacturing industry could choose they would opt for more expensive, but reliable electricity services. The alternative cost of having your own diesel generation is phenomenal and highly prohibitive to business development," it adds.

Upon detailed assessment of possible energy efficiency undertakings in some selected areas, including free distribution of efficient light bulbs to households, the report indicates a saving potential of some 95 MW per annum.
 
 In an interview with 'Daily News', the Norwegian Counsellor for Energy and Infrastructure, Mr  Geir Yngve Hermansen,  said the Planning Commission had recommended that on electricity tariff system development,  the plan requires that the future tariff system should cover the generation, transmission, distribution costs and provide an acceptable rate of profit, while ultimately removing direct Government subsidies by 2025.
 
"Considering the current low quality of electricity services I would agree there will be some need for a gradual move towards cost reflective tariffs," he said.  The Joint Energy Sector Review (JESR) however notes that the country's extensive gas resources, with promising signs of further discoveries being made, gives the country a significant comparative advantage in electricity generation within the region.

125 billion cubic feet  natural gas produced at Mnazi Bay

MORE than 125 billion cubic feet of natural gas ...

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Author: ORTON KIISHWEKO

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