Benjamin Boakye, Deputy Executive Director, ACEP
The Africa Centre for Energy Policy (ACEP) has stated that the country’s power sector challenges have not been fully addressed despite the relative stability in power supply to consumers presently.
According to the think tank, even though the additional generation capacity to the grid had helped to replace unavailable power from the T3 thermal plant, Akosombo, Kpong Hydro Plant and Asogli, among others, the other challenges threaten the stability of power supply and the country’s economy as a whole.
At a recent press conference, Benjamin Boakye, Deputy Executive Director of ACEP, mentioned financial distress of the utility companies, fuel supply security, high tariff and suppressed demand as some of the challenges.
Financial agony
ACEP revealed that the utility companies continue to reel under financial distress.
“The recent attempts at restructuring their indebtedness to the banks have not yet translated into improved relationship and confidence in the sector by the banks. The Volta River Authority (VRA), for instance, still struggles to secure letters of credit to procure fuel for its plants. This is worrisome, particularly in the light of huge burden on consumers through the energy sector levies to normalize the situation.
“As a result of its financial challenges, VRA has missed important maintenance schedules which now threaten supply stability in the short term. The T1 plant will have to shut down because of non-compliance with maintenance agreement with Ansaldo, VRA’s technical contractor, to which VRA owes about €2m. Also, the GT2 of the T1 plant will have to shut down for about two months when Ansaldo returns to work,” it disclosed.
Fuel supply hitches
ACEP said that beyond the fuel supply constraints linked to financial distress of the sector, indigenous supply of gas will also suffer when the FPSO Kwame Nkrumah goes out for maintenance.
“This will affect supply of gas to power plants in the Aboadzi enclave. If Ghana is unable to secure gas supply, DUMSOR will return. There is therefore the need to ensure availability of Light Crude Oil (LCO) for the dual fuel plants in the hope that gas from TEN project will be on schedule to keep AMERI running. Given that TAPCO and TICO are due for maintenance shutdowns, Nigeria gas remains the obvious option for averting possible load shedding.”
It therefore advised government to initiate discussions with Nigeria’s government to increase gas supply to power Asogli and KTTP which it said could provide relief to offset the shortfall from Aboadzi.
“This brings to the fore the need to comprehensively deal with VRA’s indebtedness to NGas and WAPCo.”
By Samuel Boadi