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Energy Minister designate to push for lower power tariffs

BY: Edmund Smith-Asante
Mr Boakye Kyeremateng Agyarko - Minister designate for Energy,
Mr Boakye Kyeremateng Agyarko - Minister designate for Energy,

The Minister designate for Energy, Mr Boakye Kyeremateng Agyarko, has given an assurance that he will push for a reduction in electricity tariffs if given the nod by Parliament.

Taking his turn at an animated, yet confrontational, ministerial vetting session last Monday, he said he intended to get the approval of the President for a reduction in electricity tariffs.

According to him, the President’s approval would, for instance, see a downward review of the energy sector levy.

Key among the submissions he made at his vetting was his intention to ensure the periodic review of all contracts in the energy sector, adding that in all that, the national interest would prevail.

Heated developments

The vetting, which lasted over three hours, was not without some heated developments.

Key among them was when the MP for Tamale North, Alhaji Alhassan Sayibu Suhuyini, wanted the nominee to assure the committee that he played no part in a series of scandals that hit his former employers, the Bank of New York.

The Chairman of the Appointments Committee, Mr Joe Osei-Wusu, overruled Mr Suhuyini as being out of line because the nominee’s name did not come up in those scandals.

Mr Suhuyini shot back, arguing forcefully that the committee chairman did not treat him fairly because he (Suhuyini) did not impute any ill motive in his question.

In another confrontational situation, the nominee’s assertion that the World Bank breathed on the neck of the former President, Mr John Dramani Mahama, because three, instead of one, floating storage regasification units (FSRUs) were procured, resulting in needless cost to the country also did not go down well with some members of the committee who asked him to produce evidence.

Mr Agyarko’s attempt to read out a piece of communication to defend his point resulted in a heated argument among the committee members.

Rural electrification

Speaking about the plans of the government to improve rural electrification, Mr Agyarko said: “We are working out a situation where we are looking at major tariffs across the board, particularly changing the structure for those in the lifeline, because normally they are under 50kw per month, yet because of the jumps in the tariff structure, they are equally hit.

“We have done some numbers and we believe that once the President gives it an assent, we will see some relief for them and across the broad spectrum of consumers,” he said.

He further indicated that due to the spatial distribution of electricity in rural areas, dropping the lines to supply power tended to be expensive.

“We have to find alternate sources of power for the rural communities, particularly those who want to just light up and not engage in industrial work,” he told the committee.

Renewable energy

Mr Agyarko opted for distributed renewable power and off-grid solutions, saying, “These will be aggressively pursued once I step in and see how the combination of these two sources can be of benefit to our rural population.”

“It is our intention, as indicated in our manifesto, that we will aggressively move towards solar energy for government facilities and buildings. That takes off the pressure from the national grid and secondly it takes the pressure off government budget,” he stated.

He said it was necessary to introduce tax incentives to make renewable energy affordable and lucrative and that those going into renewables must be treated differently from those in hydro.

According to him, figures he saw on electricity showed that every month the government increased its debt to the Electricity Company of Ghana (ECG) by GH₵66 million.

“But if we had distributed solar power, I believe that would come down significantly,” he said, adding, “Progressively, renewable energy is going to be a major part in our energy mix.”

Asked whether a separate agency would be established to cater for the country’s renewable energy, he said the renewable energy section would benefit more if it stayed within the energy sector or the ministry because it could leverage the engineering knowledge from the other sectors of the ministry.

Debt merry-go-round

Reacting to the issue of erratic power supply, popularly referred to as ‘dumsor’, and what he would do to resolve it if he was approved, Mr Agyarko said in the estimation of the New Patriotic Party (NPP), the problem was not technical but monetary, adding: “We now live in a debt merry-go-round.”

“The energy sector is seriously cash-strapped, to the extent that we now live in a debt merry-go-round,” he said.

According to the nominee, about 40 per cent of installed capacity (378.5MW) was idle at some given times because there was no gas to power plants and no money to do scheduled maintenance and improve financial management within the energy sector.

He explained that the government would resort to non-recourse funding to deal with the energy sector debt.

He proposed the institution of a “district boundary metering” to deal with losses encountered in electricity distribution.

He stated that 30 per cent of all power given to the ECG was lost through either technical or commercial losses.

“Every percentage point represents GH₵60 million, so 60 times 30 per cent is the amount of power lost when it gets into the ECG basket,” Mr Agyarko said.

Nuclear, coal

Stating his position on nuclear power, Mr Agyarko said there was a road map in place to ensure that Ghana benefitted from nuclear energy with the construction of facilities expected to begin in 10 years’ time.

He also stated that there were 19 steps which needed approval from the International Atomic Energy Agency (IAEA) in Vienna, Austria, for Ghana’s dream of harnessing nuclear power to be achieved.

Pressed for what could be done in the next 10 years, he said it all lay in the bosom of the IAEA.

On the intention of the Shenghen and Asogli power producers to go into the production of 1,000MW from coal, he said: “What we have to do is make sure that we impose the most stringent Environmental Protection Agency (EPA) condition on that power generation, otherwise we will be causing more harm than good environmentally.” 

Compact II

Answering a question on the NPP’s position on the privatisation of the ECG, Mr Agyarko explained that the Millennium Challenge Compact II that the government signed onto was not a sale of the ECG but “a grant of concession for a period”.

He said the NPP government would take on board all the issues raised by ECG workers, civil society and others “and let us see if we can find a common ground to reduce the tension and remove some of the misconceptions, so that the project can move forward”.

He said the Millennium Challenge Compact II was negotiated by an act of the American Congress and President Donald Trump did not have the power to nullify an act of Congress because his policy was ‘America first’.