General News of Monday, 25 February 2013

Source: Joy FM

Expect protracted power crisis - ACEP

The Africa Centre for Energy Policy (ACEP) has said that measures announced by President John Mahama in his state of the nation speech do not address the current power crisis and therefore consumers, both industrial and residential, must prepare themselves for a protracted power crisis.

In a press release issued and signed by John Peter Amewu. Director, Policy and Research, ACEP noted that "with Asogli and Takoradi 3, which also require natural gas the comfort margin will still not be achieved since WAGPCo, when it resumes gas supply, cannot supply the contract requirement of 120 mmscfd. WAGPI for a long time has been supplying an average of 70 mmscfd lower than our requirement, which is likely not to change."

However, the centre, which expressed its satisfaction with the likely completion of the Bui Project, expected to bring on-stream 400 megawatts by September said that will help save Akosombo which is in great distress as a result of being overstretched for some time now.

It said going by the system plan of Akosombo it is supposed to supply 5,000 gigawatts annually but for the past few years it has been forced to supply 7,000 gigawatts, which is almost 50 percent above its planned limit.

Mr Amewu said: "The president's measures seek to suggest that power generation is the main challenge of the energy sector, which would be solved with the expected additions in generation capacity from Takoradi 3 Thermal Plant and Bui in addition to Asogli when gas supply is restored by WAGPCo.

"It is important to also state that the problems with the energy sector are more than generation problems. The issue of poor and inefficient distribution network, which has one of the highest distribution losses in the world at about 30 percent is even more worrying. Thus, the bulk of power generated does not reach consumers and are not priced for that matter."

ACEP further stated that the foregoing has undermined the financial viability of the power utilities.

"For instance, distribution losses led to more than $ 1.000 million in revenue losses to the ECG in 2010 which has increased its indebtedness to the VRA and Asogli. These challenges have affected power generation, which is being done with a more expensive light crude oil without the appropriate returns in revenues. As a result of financial difficulties, the Tema Thermal Plant and the emergency power plants, which operate on diesel, have been left redundant in spite of the effects of the energy crisis," according to the statement.

Unfortunately, it said the urgent challenges of poor distribution system and financial difficulties of the power utilities were not addressed by the President in his State of the Nation Address.

Acknowledging efforts by government to reduce transmission losses, it expressed the hope that ongoing projects would be completed soon.

It therefore recommended that the short term measure required to address these challenges must first of all include the restoration of the financial viability of the power utilities.

"Government and ECG must accordingly pay their debts to the VRA, which reportedly stands at $400 million to enable it procure light crude oil and diesel to bring all their plants into operation, whilst we wait for WAGPI to restore gas supply and for Takoradi 3 and Bui to come on stream later in the year," according to the statement.