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Business News of Saturday, 28 February 2015

Source: B&FT

Power crisis: Experts prescribe ‘now’ solutions

Energy experts have prescribed a workable home-grown solution to address the current power crises within months, as industry, hospitals and micro enterprises struggle to cope.

The experts, at a forum in Accra organized to find ‘now’ solutions to the on-going power challenges said government must find the money and entrust it to the Volta River Authority (VRA) to complete on-going works on T3, TAPCO and Kpone thermal plants, regroup the emergence power barges procured in 2007, complete negotiations for the reverse flow of gas via the West African Gas Pipeline from Atuabo to Tema.

Current generational shortfall is estimated between 450-500 megawatts, attributable to poor inflow into the Akosombo reservoir, challenges with gas supply from Nigeria through the West African Gas Pipeline (WAGP) and difficulties with some installed thermal plants.

This has forced government to seek solutions abroad by opening negotiations with Turkish company, Karpower, to supply two power barges each capable of generating 450megawatts. The arrangement, when concluded, is expected to last for 10years with a tariff of 19cents per kilowatts hour being offered the Turkish power producer.

There is also on-going negotiations with Dubai-based Power Company to procure 10units that could produce 25megawatts each.

However, experts at the Forum, said these were long term solutions and expensive alternative and have prescribed ‘home-grown’cheaper alternatives that require immediate execution to solve the power crisis in months rather than at the end of the current calendar year, as proffered by the Power Minister, Dr. Kwabena Donkor.

Dr. Mohammed Amin of the African Centre for Energy Policy(ACEP) said government must “stop the arrangement with Karpowerand Dubai now. Give the same tariff of 19 cents per kilowatt hour offered to Karpower to VRA. VRA can then incentivize financial institutions to finance the completion of their on-going projects to solve the power challenges immediately.”

“One wonders why government would go in for a Build-Operate-Transfer arrangement that will require us to pay US$700m over five years when we could have bought it outright for US$200million,” he quizzed.

Dr. Amin said government should rather find the money and use it in completing the T3, TAPCO and the Kpone Thermal Power Project.

“The issue is financing. Government must find the money to fast-track completion of projects, securing the source of fuel, and completing negotiations for the reverse flow of gas through the West Africa Gas Pipeline from Atuabo to Tema,” he said.

The Kpone Thermal Power Project (KTPP) sited at Kpone in the Tema Metropolis, when completed will generate 220megawatts of thermal power to reduce the current deficit in power generation. However, the project is behind schedule due largely to funding challenges the VRA has had to deal with.

TICO has an installed capacity of 220MW, while TAPCO has an installed capacity of 300MW. These plants, however, are operating under capacity due to on-going works that require substantial cash.

Funding the completion of the said projects coupled with demand-side management is the immediate and cheaper solution to the power crisis, the Forum agreed.

Government has also leased 10 of the emergency power barges procured in 2007 to Sierra Leone. But Dr. Amin believes that “government can still regroup the plants and get 50MW from it.”

Directorof Planning and Business Development of the VRA,Kofi Ellis, said if we don’t check the value chain and ensure that money used in producing per kilowatt hour of power is brought back, we will never get out of ‘dumsor’. Government has no money. That shortfall is what is creating the deficit in producing the next kilowatt hour.”

Dr. Kwame Ampofo, Board Chairman of the Energy Commission said demand side management is criticalin addressing the current challenges. He said air conditioners constitute about 30 percent of total demand. He called on households to manage the use of their air conditioners.

“Government must not panic. It must be transparent and allow the right institutions to go through the agreements,” Dr. Ampofo said.

The Association of Ghana Industries (AGI) called for a publication of long-term energy plans so industry can plan accordingly.

The Executive Director of AGI, Seth Twum-Akwaboah said: “Publish our long-term plans and let everybody monitor it. We don’t know and we think we should know. We need to priorities industry in the rationing of power.”

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