Ghana's power sector is reeling under pressure from what is obviously a marked delay in adding to the generation, as population and consumption grew, with successive governments touting rural electrification without recourse to shoring up power generation.
In recent times, additions to the national grid include Sunon Asogli’s 200 megawatts, Bui Dam’s 400 MW installed capacity and 2MW electricity from a solar farm in the Northern Region.
In spite of these strides, the country still heavily depends on hydroelectric sources for power generation. Akosombo, Kpong and Bui dams together can generate 2,580MW. However, due to low water levels, they could only provide a little over half of their total installed capacity, with Bui doing only about a third of its capacity.
It is in this vein that the search for more independent power producers (IPPs) has become important. Sixteen IPP agreements have been signed and new ones are still being examined, with the view to diversifying the mix as much as possible to improve generation and distribution reliability.
Germany’s help
The German Ambassador to Ghana, Mr Rudiger John says he believes that not only was power generation important, but its source was paramount, saying renewable energy was a better alternative.
“If you want to develop the country further and create new jobs and value chains, you need energy. But today, it’s not only just producing energy, but how to produce energy,” he said.
According to Mr John, climate change, which was impacting a lot on African countries, was part of the country’s energy challenges as there was low rainfall which affected the hydro dam.
He said Germany was trying to support countries such as Ghana and would use the country as the hub for the exchange of information, ideas and solutions on clean energy and environment.
The German development financier, DEG, has already financed some energy projects, including expansion works on thermal plants in the Western Region. It also has a hand in the financing of Cenpower, which started construction works in February.
The German Technical Co-operation (giz) has been assisting the Ministry of Energy and Petroleum, and now the new Ministry of Power, to work on the renewable energy policy space and regulatory framework, while encouraging various German companies with expertise to explore local partnerships in the sector.
The French company, Total Petroleum, which has been operating in the country for many years, announced about $100 million investment in the solar energy farms in Ghana.
Total Petroleum made the announcement at the West African Clean Energy and Environment Exhibition (WACEE) 2015 that it would be working through a consortium with renewable energy company, Neoen to build solar energy farms in the northern part of Ghana.
The consortium has already reached a financial closure and work is expected to start this year, according to Mr Frederic Ciamous, the Senior Business Development Manager, New Energies Division of Total.
There are 11 generation facilities in the country with a total installed capacity of 2,846.5 megawatts. They are made up of hydroelectric power plants, thermal plants and renewable sources, including a 2MW solar farm.
The country has generation deficit fluctuating between 150MW and 250MW. It gets worse when generation plants are shut down for ‘routine maintenance’ or in times of breakdown, as was the case as of February 16.
There are thermal generators such as TAPCO (T1), which has the installed capacity to generate 330 MW, TICO (T2) can generate 220MW, Sunon Asogli can generate 200MW, with T3 having an installed capacity to generate 132MW, each from thermal sources – gas or light crude oil.
The Volta River Authority (VRA) contributes 2,104.5MW of power generation, about 75 per cent of the country’s total installed capacity, with IPPs contributing 726MW, about 12 per cent.
Pipeline projects
There are some projects in the pipeline. These include the upgrading of Sunon Asogli to generate 360MW more. The company also wants to build a 700MW zero discharge coal plant in the Western Region.
The VRA is also building a 220MW Thermal Power Project at Kpone (KTPP), which is expected in the first quarter of 2015, according to VRA CEO, Mr Kirk Koffi.
The American firm, General Electric (GE), is also readying to locate the Floating Storage Regasification Unit (FSRU), a floating natural gas vessel, to produce more than 1,000MW of power to supplement the country’s power needs. The first phase of 360MW for the grid is expected by September 2016.
It is also expected that after the publication of feed-in-tariffs by the Public Utilities Regulatory Authority (PURC) which will be the first since September 1, 2013, more IPPs would be attracted to the production of energy from renewable sources such as solar, wind, biomass, landfill site and sewage and hydro in the coming years.
According to a research by the Kwame Nkrumah University Of Science and Technology (KNUST), biomass alone could help the economy generate about 110 megawatts of power. Utilising only 60 per cent of the biomass available can enable the country to generate 67MW of power through small plants.
Risks
One of the critical reasons underpinning challenges in the power sector is the lack of investment, which stems from the low tariffs that had been charged for years. Successive governments for most part of the country’s fourth republican dispensation have not found it politically expedient to pass on the right tariffs to consumers.
They have tended to absorb increases but defaulted in remitting the subsidies to the utility providers in full.
Currently, the Sunon-Asogli Thermal plant is owed millions of Ghana cedis by the power distributor, Electricity Company of Ghana (ECG), according to the Minister of Power, Dr Kwabena Donkor.
Similarly, the Volta River Authority is also owed millions. It also has some outstanding receivables from customers, all traceable to the tariff misalignment and the government’s inability to meet its financial obligations to players in the energy sector, be it power or petroleum, especially downstream and midstream players.
Power is very crucial for the country’s move towards an emerging economy and all efforts should be deployed boldly, supported with timely and appropriate financing to solve the energy and power challenges once and for all, looking beyond emergency measures.
