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", "image": { "@type": "ImageObject", "url": "https://www.graphic.com.gh/images/2019/jun/22/PURCEE.jpg" }, "author": { "@type": "Person", "name": "Enoch Darfah Frimpong", "url": "https://www.graphic.com.gh/features/features/trends-in-electricity-tariffs-in-ghana-between-2010-and-2020.html" }, "publisher": { "@type": "Organization", "name": "Graphic Online", "logo": { "@type": "ImageObject", "url": "https://www.graphic.com.gh/images/2018/feb/onlinelogo.png" } }, "datePublished": "2022-08-12T19:13:31+00:00", "dateCreated": "2022-08-12T19:02:30+00:00", "dateModified": "2022-08-14T09:05:57+00:00" }

Trends in electricity tariffs in Ghana between 2010 and 2020

BY: Graphic.com.gh
Trends in electricity tariffs in Ghana between 2010 and 2020
Trends in electricity tariffs in Ghana between 2010 and 2020

The developments in a country’s electricity prices are an important parameter of electricity markets.

That is, the competitiveness in the industry and the increasing role of electricity in general.

Electricity prices are also a significant part of domestic expenditure, playing an important role in industrial competitiveness, and influencing energy consumption patterns.

How electricity prices evolve overtime therefore, will help identify and rationalize its significant roles, and ultimately determine its rate of changes to inform stakeholders.

In Ghana, PURC’s gazetted end-user tariffs provides a solid database on electricity prices to serve this purpose.

This study presents an analyses of the trends in electricity tariffs in Ghana between 2010 and 2020.

The key trends examined included an analyses of electricity tariff trends for each user category; and analyses of the overall trends in end-user electricity tariffs over the study period. The study employed secondary data sourced from PURC’s gazetted end-user electricity tariffs.

Findings from the study showed that over the ten-year period assessed, the Commission has engaged in 29 different tariff reviews, comprising 5 major and 24 minor reviews, using the automatic adjustment formula (AAF).

These tariff reviews have resulted in 11 tariff increments, 2 tariff reductions, and 16 no changes in tariffs.

Electricity tariffs between 2010 and 2020 averaged Ghp48.2876/kwh for residential customers, Ghp76.0730/kwh for non-residential customers and Ghp70.4976/kwh for special load tariff (SLT) customers (LV, MV, HV, and Mines).

Over the period, the highest rate of tariffs recorded for each customer category averaged Ghp71.34/kwh for residential customers, Ghp120.767/kwh for nonresidential customers and Ghp132.9184/kwh for special load tariff customers.

These high rates of tariffs, were applied in December 2015 for both residential and non-residential customers, and in October 2019 for SLT’s. The highest percentage
change in electricity tariffs recorded between 2010 and 2020 was an increase of 62.72% in October 2013, while the lowest of -22.083% was in March 2018, which
denoted a significant decrease in tariffs.

The analysis also revealed an increasing trend in electricity tariffs across all enduser groups, with some fluctuations, which denotes percentage changes chronicled
along the years.

Residential tariffs have relatively lagged behind both nonresidential tariffs and SLT’s. This has been justified based on lower consumption levels of residential customers relative to both non-residential and SLTs.

The trends also showed that between June 2010 and October 2018, tariffs for nonresidential customers exceeded those of SLT customers.

This trend was however reversed in July 2019, when the Commission, in considering the pre-impact of maximum demand charges, announced a major policy shift of eliminating maximum demand charges in tariffs of SLTs.

This move by the Commission was to enhance competitiveness of Ghanaian industries1. Prior to this policy shift, electricity tariffs of SLT’s exceeded that of non-residential customers.

Careful observation from the data and graphical analysis revealed that, for all election years, end-user electricity tariffs were generally stable with no significant changes.

The trends depicted no major tariff decisions when review periods coincided with election years.

Additionally, there was no quarterly adjustments to tariffs during election years, although economic indicators necessary for the review of tariffs may have varied.

This was observed in the trends in tariffs between March to December 2012, April to December 2016, and January to September 2020, which were all tariff review periods, within election years.

Given that the study has highlighted the specific months and years in which tariff decisions were made with their respective directions of change, it is important as a follow-up, to identify which end-user group is being affected more by these tariff changes.

Thus, data on incomes, and electricity consumption coupled with expenditure patterns of different end-user groups will constitute a necessary next step to this study.

This will help to identify with precision, impacts of electricity tariff adjustments on end-users, and at what point electricity tariffs would become unaffordable to end users (ability and willingness to pay study).

Attached below is a study of the trend