VRA cries for more cash

The Volta River Authority (VRA) says it is not satisfied with the level of increment in tariffs as recently announced by the Public Utilities Regulatory Commission (PURC).

PURC last week announced 52 per cent and 78.9 percent increase in water and electricity tariffs respectively.

Following the announcement, various bodies, notably the Trades Union Congress (TUC), the Association of Ghana Industries (AGI), the Alliance For Accountable Governance (AFAG), the Progressive People’s Party (PPP), among others, have strongly condemned the tariffs hikes.

However, officials of VRA disclosed that management of the authority was holding discussions with government over the issue because the increment was insignificant.

According to them, VRA needs money to continue its expansion projects to increase power generation in the country.

This was made known during a facility tour at the Takoradi Thermal Power Station located at Aboadze by VRA to update journalists on various projects being undertaken.

Although the officials were unwilling to comment about issues relating to tariffs because they claimed they had not been authorized to do so, one of the officers, whose name has been withheld, noted that VRA would not break even with the new tariffs.

The Aboadze Complex spends $2,578,000 to purchase crude oil to operate the thermal plants if price of crude is $100.

According to him, “If VRA generates a kilowatt/hr for 54 pesewas using crude oil and PURC improves tariffs to 11.49 per kilowatt/hr, you can tell even here that we don’t do business like that. Look we generate at 54 pesewas and sell at 11.49 pesewas. The reality is that we don’t even break even”.

Samuel De-Graft Johnson, the Public Relation Officer (PRO) ofVRA, asked the journalists to wait for the outcome of the on-going discussions with government promising to make publicize the positions of VRA and Government on the matter.

The Maintenance Manager of the station, Stephen Owusu, who briefed journalists on the state of the Aboadze complex, disclosed that VRA had embarked on expansion projects to increase power generation.

Currently, the thermal plant has a total installed capacity of 530 megawatts on the national grid from its T1 and T2 projects. The expansion of T2 and T3, which is still in the preparatory stage, would add 110 and 170 megawatts respectively to the grid.

Proposals on the projects, he disclosed, had been submitted by bidders who have also conducted site inspections.

“By the close of the month, there will be evaluation of those tenders or proposals to know who exactly has to do the work. Some preparatory work has started and development is going to start very soon,” he stated.

Thermal To Lead Power Generation

The maintenance manager said it is expected that by 2022, thermal generation would constitute over 54 percent of generation mix.

“Hydro-generation is about 54 percent for the installed capacity presently. Looking into the future by 2022 we are going to have more thermal than hydro as a result of the projects we have on the drawing board.”

Mr. Owusu stated that unreliability of gas inflow from the West African Gas Pipe Project (WAGP), high prices of crude oil, environmental and spare parts issues were some challenges facing the complex.

He said they intend to increase inflow from the WAGP after the completion of ELPS from Nigeria and supply of natural gas from the Jubilee fields.

Issues On T3 Project

The T3 project, which operates on four gas turbines with 132 megawatts capacity, has currently been shut down for major repairs following severe damage to some of its gas turbines.

According to King Taylor, officer in charge of T3, after the project was handed over to VRA for commercial operations on April 12, 2013, the high pressure compressor on June 5 got burnt causing severe damage to gas turbine units one and four.

Owing to the incident, VRA and the contractor Mallegellan, assessed the situation but recorded conflicting reports.

In view of that, VRA and Mallegellan contracted an independent assessor, South West Research Institute from Texas to carry out a root cause analysis into the incident.

The report of the independent assessor is expected by the end of the month.

The officer said after the report, unit one and four, may take six to seven months to commence commercial operations.

The contractor, according to Mr. Taylor, had submitted a proposal to retrofit gas turbine units two and three which suffered minor damages on site and run them.