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Business News of Wednesday, 6 February 2013

Source: B&FT

High demand, low tariff compound power problems

The country’s current electricity demand has outstripped supply due to consistent annual demand growth of over 10 percent, resulting in a critical demand –supply imbalance and complete depletion of the system reserve margin.

Measures by the Volta River Authority (VRA) to address the energy gap are further delayed by non-cost-reflective tariffs, which do not attract sufficient investment to the Authority and thereby weakens its finances, Mr. Samu8el Kwesi Fletcher, Head of Corporate Communications for Volta River Authority (VRA), has disclosed.

“Electricity infrastructure projects are capital-intensive, which normally requires huge capital outlay-not less than US$ 100million – and takes about four years to complete under ideal circumstances.

"Current electricity tariff are uneconomic, considering now that VRA has to purchase significant quantities of crude oil to generate power because there is no gas supply from the West African Gas Pipeline.

“Upsurge in crude oil prices coupled with arrears owed by VRA by the public sector and delays in honoring government promissory notes arising out of oil purchase constitute a colossal amount in both local and foreign currencies, thus worsening our financial situation. The aggregate of these factors are affecting the operations of VRA.”

Mr. Fletcher told this to Journalists during a media tour of VRA facilities at Tema, Kpong, Akuse and Akosombo to inform the public through the press on the current operations and state of its machinery.

The tour was to provide on-site guidelines for the media on how to improve reportage on issues relating to power generation and understanding some basic terminologies and operational activities. Mr. Fletcher said the accidental damage to the WAGP continues to strain VRA’s power generation efficiency.

“The damage to the gas pipeline has had its toll on our power generation capacity. We are currently losing 200 megawatts of power due to the malfunction of the Asogli power plant – an independent power provider- which runs solely on gas.

“During election last year, we had to import 100 megawatts of power from Ivory Coast. In the absence of gas, we have had to rely on crude oil which is very expensive- costing double the amount we spend with gas,” he noted.

On energy conservation, Mr. Fletcher said: “economic growth comes with necessary infrastructure; the country’s energy needs keeps growing year-on-year, hence the need for the public to use power judiciously.

“We don’t have the required reserve for a stable system, and therefore all hands must be on deck if we are to address the issue of load-shedding. To solve our energy problems today, we should have a started four years ago,” Mr. Fletcher noted.

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