Improving energy efficiency among SMEs in Uganda
Institutionalisation of energy efficiency in Uganda: An evidence-based multi-stakeholder approach (IEEUganda)
Background, challenges and context
Energy efficiency is an integral part of Uganda’s national strategy, with one of the many targets set out by the government being to reduce industries’ electricity consumption by 15-25 per cent by 2025. However, despite its high-level commitments, Uganda is far from reaching its energy efficiency targets.
In Uganda, however, enterprises are confronted with a host of challenges that contribute to a poor uptake of energy efficiency technologies. These include dependence on obsolete technologies, limited access to finance, a lack of confidence or adequate awareness about the long-term benefits of energy efficiency, a lack of enabling policies, and a poor culture of regulatory enforcement. Enterprises interested in adopting energy efficiency technologies are also discouraged by the transaction costs associated with gathering and processing information, weighing risks and benefits, and enforcing contracts in the purchase and installation of technologies.
Industries often view energy as an operational cost, and energy savings as incidental benefits, when, in fact, industrial energy efficiency measures enhance competitiveness. Energy efficient technologies and practices can reduce a company’s costs and boost savings, subsequently increasing their productivity. The link between efficiency and productive use of energy, however, remains mostly unexplored.
Research overview and objectives
This research project will use a multi-stakeholder deliberative approach, where participants are encouraged to engage in considered debate and modify their views based on information and shared views. It aims to address some of the barriers and transaction costs industries face, and increase uptake of energy efficiency mechanisms.
The team is focusing on two industries: cement and iron/steel, which are the most energy-intensive industries in Uganda. The Uganda Vision 2040 recognises them as economic lifeline industries essential for job creation, infrastructure development, and technological growth. Over the last two decades, the two sectors have been growing at unprecedented rates due to the booming housing and construction sector in Uganda and in the region (e.g. South Sudan).
The research project aims to answer the following questions:
How effective are Uganda’s existing energy efficiency policies? Looking beyond national commitments, what are institutions’ track records on implementation of efficiency-related policies?
What is the real value of energy efficiency for industries (more specifically, within the cement and iron/steel industries)? What drives industries interest or lack of interest in energy efficiency mechanisms? What are the prevalent (political, economic, behavioural, and sectoral) dynamics that influence SMEs’ decisions regarding their energy use and management?
Does a multi-stakeholder deliberative dialogue modelling exercise yield results? Does it lead to better policies? Or reduce the transaction costs for SMEs?
To establish the baseline of Uganda’s policies and regulation on energy efficiency, the team will undertake initial scoping and stakeholder mapping, including desk reviews, existing data analysis, and in-depth interviews with stakeholders across government agencies, the private sector, and civil society. The team also aims to develop a deeper understanding of the institutional, behavioural, technical, and financial drivers and barriers that influence SMEs’ attitudes towards energy efficiency. The project will also consider the underlying interests, incentive structures, historical legacies, and social trends to observe and analyse how these factors affect industries attitude and preference.
At the centre of the applied research is the Long-Range Energy Alternative Planning (LEAP) energy modelling tool. LEAP will be used to identify and analyse the long term economic, environmental and energy saving implications of energy efficiency related policies and technologies. The modelling work will also be used as a platform to bring stakeholders from the energy and selected industrial sectors for considered deliberation on the costs, benefits and trade-ffs that are associated with different technological and policy pathways. The project will engage stakeholders in problem identification, scenario building, data gathering, and interpretation, with the objective of identifying solutions and encouraging commitment.
The team will share its findings and recommendations through a one-day validation and policy dialogue workshop targeting high‐level policy makers and relevant actors. The team will also partner with the research institutes in Uganda to organise an academic conference on energy efficiency in Africa.
The project aims to advance knowledge beyond the traditional view of energy efficiency as merely delivering energy demand reductions, and to recognise the critical role it can play in delivering concrete social and economic improvements.
Uganda Cleaner Production Centre (UCPC)