The Sunon Asogli Power Company at Kpone will commence work on a second combined cycle gas turbine to generate 360 megawatts of power by 2016.
The project is set to commence in August this year and will be fully ready for commercial operation in two years.
The Chairman of Sunon Asogli Power Company, Mr Li Xiaohai, disclosed this to a section of the media at Tema on April 23 during an interaction.
He said the delivery of the additional power would be timely to supplement generation from the hydro power at Akosombo, especially when weather patterns fail to support a good rainfall season in the next couple of years.
Mr Xiaohai said pressure from the West African Gas Pipeline was now high and that the gas pipeline company had up to July 12 when the gas flow would reach contractual levels.
Sunon Asogli Power Company is owned by Shenzhan Energy Group Ltd, with the China Africa Development Fund, owning 40 per cent stake.
Impact
The project will help boost the country’s power generation capacity beyond 2,000 megawatts to help meet the growing demand for electricity which is estimated at about 12 per cent per annum.
It will also help the country to gradually reduce its dependence on hydro which constitutes more than half of the country’s generation capacity while helping to cut the cost of thermal power which depends on light crude oil.
Background
The Shenzhan Energy Group, which comes from China’s Shenzhan region, is experienced in gas, coal and renewable power generation.
It was incorporated around 1989, at the same time that the Shenzhan region was undergoing massive development and economic transformation and needed more power generation to spur industrialisation and growth.
Mr Xiaohai said the company’s commitment to Ghana was unflinching as they saw Ghana in the same position their country found itself in some 30 years ago.
“Ghana and China have long standing ties and share similar colonial history.
This investment is part of the renewed interest and support of our government to do business with Ghana and Africa. But we don’t know Africa so well and so Ghana is a good place to start,” Mr Xiaohai said.
The crisis
The construction of the plant began in April 2008 and completed in December 2009. As per arrangements with the government, natural gas was expected in 2007, but it was never ready until August 2010. The plant started commercial operations at the end of that month.
Barely a year after operations, gas supply ceased because of a damage to the pipelines transmitting gas from Nigeria.
In spite of that among other challenges, Mr Li said the company had kept faith with the economy and continued to fire the 200-megawatt plant, which was running near full capacity.
“Putting in such high investment for it to lie idle certainly pushes our risk high.
But even in such hard times, we continue to operate, especially in our belief that power was key to economic development,” he said.
Use of bigger machines
Mr Xiaohai said in power generation, bigger machines delivered more power efficiently and that it would be the way forward for the company.
“We want to start some new projects, using bigger machines for the second phase. They have higher efficiency and cheaper tariffs,” he stated.
Why coal
He said Ghana, like China 30 years ago, needed cheaper electricity to power growth and development. However, gas resources in the country were not abundant, yet expensive. Nigeria has abundance, but its supply is unpredictable.
Similarly, the hydro reserves were not adequate and in the view of Mr Xiaohai, Ghana was not yet ready or at the stage to generate power from nuclear sources.
Coal, he said, came up as the cheapest and most reliable. More than 50 per cent of power in the world is generated from coal.
This generation source accounts for more than 60 per cent of power in China, which imports coal.
“This is an alternative solution to the generation deficit in Ghana. Even with the importation, our analysis indicates that it will be cheaper than gas,” Mr Li said.
The project, valued at US$1.5 billion, will comprise two 350mw generation units to be constructed in phases over a five year period.
There will also be a port at the Takoradi Harbour for receiving coal imports from South Africa, where coal supply is said to be predictable and ready for the export market.
He said the alternative had been discussed with stakeholders, including the government, the Public Utilities Regulatory Commission (PURC), the Volta River Authority, GRIDCo and Electricity Company of Ghana, which had all encouraged the initiative.
Mr Xiaohai emphasised that the plant design would rely on European standards of emission, which would essentially result in zero discharge. GB