CONFIRMED: 10 'Kufuor power plants' rented to Sierra Leone for $25k/month

Power Minister Dr Kwabena Donkor, according to a minority member of the Mines and Energy Committee of Parliament, Kennedy Nyarko Osei, has confirmed to Parliament – at the Committee level – the shipment of 10 CAT power plants of State power producer Volta River Authority (VRA) to Freetown, Sierra Leone.

The Akim Swedru MP told StarrFMonline.com in an interview on Friday February 20, 2015 that Dr Donkor, who appeared before the Committee Thursday revealed, upon questioning that the Government of Ghana was renting 10 of the one-Megawatt capacity plants-on-wheels to Freetown at a cost of $2,500 apiece for “some time.”

“He has confirmed it that they’ve given it to Sierra Leone,” Mr Nyarko Osei said.StarrFMonline.com, on Monday February 16, 2015 broke the story about the shipment of the plants to Freetown after thorough investigations at the VRA yard at Tema, where the containerised power plants have been kept since they were imported into the country by the Kufuor administration in 2007.

The 10 CAT plants were part of a 126-Megawatt consignment, which were described by former Chief Executive Officer (CEO) of the VRA, Dr Charles Wereko-Brobbey as “toy machines” at the time they were purchased to help mitigate a similar power crisis as Ghana is currently experiencing.

StarrFMonline.com’s laborious reconnaissance missions at the heart of the VRA revealed that most of the plants have been lying dormant in the yard and virtually rotting away.

StarrFMonline.com also discovered that the plants have become white elephants because there is no money to fuel them with crude for power generation.

During StarrFMonline.com’s latest visit to the VRA yard, it was revealed that already scores of the politically controversial plants have been given out to some health posts, and other state agencies to use as emergency plants.

The remaining plants counted by StarrFMonline.com within the VRA’s yard number between 50 and 60.

During StarrFMonline.com’s pries, the team discovered that dozens of the CAT generators had been brought out in the yard and being packaged for shipment. The development has generated intense discussions and divisions among top engineers, management members as well as some lower staff of the VRA.

StarrFMonline.com had rare fly-on-the-wall opportunities in some highly classified meetings held by some top engineers, as well as some rounds done by them, at which events they complained bitterly about the shipment of the plants since, in their view, they could be used to help the current power crisis.

Cumulatively, the plants could provide between 50 and 60 Megawatts of energy or more if they were in use.

Ghana is currently reeling under a worsening power crisis, which the President and the Minister of power have explained is the result of poor water levels in the three hydro-electric power plants – Akosombo, Bui and Kpong – as well as lack of gas from the West Africa Gas Pipeline coupled with faulty equipment and plant shutdowns for routine maintenance.

Power producers, transmitters and distributors are currently shedding between 440 and 650 Megawatts of power during off-peak and peak periods as a result of a worsening supply deficit, instead of a planned 250 and 350 Megawatts.

According to the Energy Commission, Ghana’s installed generation capacity available for grid supply as at the end of 2013 was about 2,936 Megawatts. Hydroelectric generation at Akosombo, Bui and Kpong constituted 53.8% of this amount whereas thermal generation at the dual fuel natural gas, light cycle oil and diesel plants located in Tema and Takoradi (Aboadze) provided 45.9% of installed capacity. Renewables constituted only 0.1% whereas LPG generation from Genser power provided the remaining 0.2% of installed capacity.

A recent analysis done by some economists belonging to the Ghana Growth and Development Platform (GGDP) said power demand has been estimated to increase 10-15% year-on-year in the past three decades. Thus, new generation capacity must increase by at least the same percentage per year in order to support expanding industrial, institutional, commercial, household and other needs as the country grows and develops.

Current Supply And Demand Condition

1. However, only about 1,500 MW or 51% of the 2,936 MW installed capacity has been available in recent times due to a myriad of factors, the primary one being the unavailability of gas to power the thermal plants and government’s inability due to fiscal constraints to purchase light cycle crude oil as an alternative.

This is compounded by the declining rainfall patterns which affect the hydro plants. The Bui hydro plant, for example, has predominantly never run at more than 40% of its installed 400MW capacity since it was commissioned with great fanfare in December 2013 due to the water level being below the level needed for generation. Thus, the dry season we are in currently has to end before rainfall can increase the water level to allow generation.

2. Peak power demand in Ghana currently stands at about 2,000 MW. For 2014, Ghana’s peak load ranged between 1,900-2,200 MW (ex the 10-20% reserve margin needed for system redundancy).

3. Gross electricity supplied in 2013 was about 12,871 GWh (an average of 1,469 MW per day) against a forecast of 16,113 GWh (1,839 MW per day) for the year. Of the actual quantity supplied, hydro comprised only 936 MW (32% of the total installed capacity or 59% of hydro capacity) whereas thermal sources constituted 527 MW (18% of the total installed capacity or 39% of total thermal capacity). This condition created a 20% supply deficit in relation to forecasted demand, thus necessitating the load-shedding (a.k.a ‘dumsor’) that has been carried since 2013.

4. The 2010 Wholesale Power Reliability Assessment report estimated that Ghana loses between 2-6% of GDP annually due to insufficient wholesale power supply, which excludes a number of indirect costs of lost economic output.

In the first of a three-part analysis on the crisis, GGDP said the main factors responsible for the current supply condition are: “(a) the very poor credit risk of ECG (currently the sole off-taker on the market); (b) gas supply challenges from the West African gas pipeline as Nigeria, our major supplier, prioritises her domestic industrialisation agenda over regional integration needs; (c) poor infrastructure planning, maintenance and lack of system redundancy resulting in many thermal plants going offline on or about similar times; and (d) distorted tariff regime pushing IPPs to ask for sovereign guarantees in power purchase agreements (PPAs) before commencing operations.”

The group added that the “unavailability of supply from Bui currently, is the primary reason why the ‘dumsor’ has worsened since December 2014.”

As part of measures to mitigate the crisis, the Government of Ghana is procuring two power barges from Turkey at a cost of $250 million to supplant current power production. The barges, each with a generating capacity of 225 Megawatts, are expected into the country by April. The Ghana National Petroleum Corporation (GNPC) is financing the procurement.

This is not the first time Ghana is procuring power barges to help the power situation. A 125-Megawatt barge, christened Osagyefo Barge procured by the Kufuor administration in 2007 has remained dormant.