The Volta River Authority (VRA) has begun generating cheaper power from natural gas generated from the country’s offshore upstream oil and gas operations.
Although the VRA is yet to declare profit from its operations, it says it is now able to break even, a situation which did not exist before.
The authority has also been able to reduce the frequency of maintenance of its equipment due to the availability of gas, a development which it describes as remarkable progress towards recovery.
Speaking to members of the Energy and Petroleum Network of Journalists after a tour of the thermal facility of the VRA at Aboadze, the Maintenance Manager of Thermal Generation of the authority, Ing. Isaac B. Menu-Dafour, said apart from the progress, the Energy Sector Levy Act (ESLA) was also taking care of some aspects of the company’s increasing debts as part of its debt management strategy.
Gas reliability & recovery plan
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Ing. Menu-Dafour said the company had come up with a financial recovery plan by which “we are looking at reducing the cost of operations, since our main challenge continues to be borrowing at high interest rate from the financial market to finance our operations”.
He also said for some time now the cost of natural gas to power the turbines had reduced, while there had been more reliability in supply.
“This resulted in favourable cost of operation which was passed on to consumers and gave us some financial benefits. However, we are not declaring profit but we are at break-even point,” he said.
Hitherto, he said, the VRA had to run to the banks for financial support to buy light crude oil, which would be stored for three months, but with gas, “we currently have an agreement with our suppliers called ‘pay as you go’ to supplement the volumes we are getting from Atuabo. Under this arrangement, whatever volumes we draw from the lines we pay for it”.
The VRA has a total installed power generation capacity of 2,340 megawatts(MW) from the Akosombo, Kpong, Tema, Navrongo and Aboadze generation stations.
The Akosombo Dam has the capacity to generate 1,020MW, while the Kpong generation station produces a maximum 160MW.
The Solar PV Plant in Navrongo in the Upper East Region produces 2.5MW.
About 1,150MW of power is produced by the thermal plants of the VRA at Aboadze, near Takoradi, and at the Tema enclave.
While the power plants at Akosombo, Kpong and Navrongo account for 50.7 per cent of energy generation by the VRA, the thermal plants at Aboadze and Tema account for 49.3 per cent.
Ing. Menu-Dafour said the thermal facilities operated on a combined cycle of gas, which was preferred, and light crude, which was unfriendly to the units.
“Therefore, it is instructive to mention that, aside from other benefits of switching to gas, our maintenance regime has also changed. Instead of doing inspection half of the hours operating with crude, with the gas, we actually have double the maintenance hours and save cost of spare parts,” he said.
He said currently, the units were relying on gas from Ghana Gas for operation and that when the volumes went down, the VRA topped up with supply from Nigeria through the West African Gas Pipeline.
“We already have an arrangement in place and, therefore, as Jubilee shuts down, we run our combined cycle plants on gas coming, which has always been a preferred choice, to give us additional megawatts from the steam turbine,” he said.
Under the current arrangement, the remaining gas would be transferred to the AMERI plants to run about three of its gas turbines to top up the generation, he said.
Officials at the VRA commended the Energy and Petroleum Network of Journalists for the visit and pledged their support to ensure that members become familiar with the operations of the power sector to enable them to analytically communicate with the public.