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Business News of Saturday, 8 February 2014


Invest more in renewable energy; Tema industrialists urge govt

The Tema branch of the Association of Ghana Industries (AGI) has urged the government to consider investing more in renewable energy to sustain the energy sector.

Considering the variables which inform the adjustment in electricity tariffs, including the depreciation of the cedi and increasing crude oil and gas prices, the association said the government should consider solar and other renewable energies to generate power.

The Tema Regional Chairman of the AGI, Mr Charles Mensah, made the submission at a stakeholders’ meeting organised by the Public Utilities Regulatory Commission (PURC) in Tema to discuss the automatic adjustment formula (AAF).

The AAF is a pricing mechanism adopted by the PURC to track and incorporate movements in key uncontrollable determining factors to reflect the cost of electricity and water supply quarterly.

Research important

Mr Mensah said to ensure sustainable and reliable energy in the future, the government needed a long-term initiative to complement the current source of energy in the next five years and beyond.

He recommended that the government invest in research to find a lasting solution to the current crisis.

While acknowledging the problems facing the utility providers due to the economic hardship, Mr Mensah said it was necessary to plan for the long term.

He further urged the PURC to serve notice to industry players of increment in tariffs so that they could factor it in their budgets.

Why solar energy should be considered

Explaining that renewable energy should be considered in the near future, the Director of Planning and Business Development of the Volta River Authority (VRA), Mr Bernard Kofi Ellis, said the Ghana National Gas Company was not in a position to meet the local demand for gas.

He said although the thermals needed about 320 million cubic metres of gas per day to function at full capacity, Nigeria was currently producing 70 million cubic metres through the West African Gas Pipeline.

He said even if Ghana Gas started producing about 90 million cubic metres of gas, it would add up to make 160 million cubic metres, which would still not meet the target of 320 million cubic metres needed per day.

He added that the demand for gas for electricity production was likely to increase to about 1,000 cubic metres in 10 years due to additional thermal plants.

Therefore, he said, as long as Ghana depended on crude oil to support the production of electricity, the tariffs would continue to be high because the prices were rising.

Draft policy

The AGI consultant on energy, Mr Andrew Lawson, said the government needed to consider drafting a policy on solar energy to make it easy and attractive to use by individuals and the country as a whole.

Citing the case of Australia, Mr Lawson said that government subsidised the use of solar energy, which made it cheaper for individuals to use in that country.

Responding to the submission by the AGI, the Executive Secretary of the PURC, Mr Samuel Sarpong, said solar energy came with its own challenges, such as the high cost involved in its production, especially with the initial cost.

However, he said the commission had already considered solar energy and was hopeful that the current prices of the generation facilities of solar power would be reduced for Ghana to be able to adopt solar energy.

He added that currently, research into renewable energy was going on in Navrongo in the Upper East Region.