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Opinions of Tuesday, 4 February 2014

Columnist: Abugri, George Sydney

Ten-plus steps to ending Ghana’s energy crisis

…notes from a news reporter’s dairy.

By George Sydney Abugri

In recent years I have had the good fortune to attend a series of international workshops and seminars on strategies for resolving the energy crises which have plagued Ghana and other West African countries on and off for many years.
The forums were designed and run by the Centre for Energy Economics at the University of Texas, as training programmes for energy sector capacity-building professionals from Nigeria, Benin, Ghana and Togo.

The workshops and seminars had in attendance, leading international authorities on energy development and energy sector regulation.
They shared with their West African counterparts, experience gained from case studies on energy investment options, the development of energy infrastructure, the fixing of tariffs, dispute resolution and the exercise of energy regulatory functions in the United States, Hungary, France, Germany and Mexico.

The forums established one key barrier to the attainment of energy self-sufficiency by West African countries trapped in the recurring electricity supply crisis: Lack of adequate investment in the sub-region’s energy sector.
This lack of investment was in turn attributed to three major limiting factors: Inadequate energy tariffs, weak energy sector institutions and insufficient government attention and investment.
Another problem identified was the conflicting roles of some West African governments which are both producers of energy and regulators of its pricing and distribution to consumers. Other constraints in the production of energy is the lack of adequate resources to support the work of energy sector regulatory institutions, energy sector regulators’ limited accountability to energy consumers and limited consumer education on the politically sensitive issue of tariffs.
“These underlying constraints must be addressed before a vibrant, efficient and sustainable energy marketplace can be created in the sub-region,” delegates declared in a communiqué issued at the close of one of the forums.
According to the communique, one of the short-term interventions needed to improve energy supply in the sub-region is “an objective and effective consumer communication strategy, containing information on the need for cost-reflective tariffs”.
It was argued that throughout West Africa, most consumers do not have adequate information on reasons for the need to pay appropriate tariffs.
The delegates agreed that timelines set by governments in West Africa for achieving economic tariffs need to be more realistic and plans for the provision of corresponding levels of customer service, designed and implemented in West African countries plagued by the energy crisis.
One delegate contended that “independent generation of electricity and resale into the market should be encouraged” in West Africa. He explained that this would lead to “a fast expansion of the generation capacity of the affected countries and increase the size of the secondary market for natural gas.”
A consensus at another forum was that in the medium term, institutions responsible for overseeing energy sector activities such as utility service provision and the regulation of tariffs, should be adequately resourced by governments in the energy crisis-hit sub-region and granted reasonable autonomy to effectively carry out their duties and responsibilities.
While urging governments in the sub-region to support the establishment of a business environment attractive for investment in the production and supply of energy, most delegates were honest to admit that with the prevailing state of utilities, tariff increases were unlikely to translate into an enhanced and improved quality of service.
“The quality of service can only be improved if the utilities are recapitalised. The most viable sources of short and medium-term funding for recapitalisation, should be national budgets,” the delegates argued in their communiqué.
“We are calling on governments in the West African countries hit by the energy crisis to provide the investment funds needed to replace obsolete and dilapidated equipment in the short term, while national companies are on their part, made to implement sustainable long-term strategies for quality service delivery,” they said.
Participants called for the promulgation of new laws that require periodic performance reviews of energy sector institutions to make them “more responsible and accountable”.
Another long-term measure proposed, was the development by governments in the sub-region, of a strategic business plan for the energy sector that would of necessity include mechanisms for regular updating and monitoring of the performance of energy sector institutions.
“Such a plan must set clear targets and enable sector institutions to outline clearly how they intend to meet their targets.

The plan should also include the development of a utility performance scorecard and a common communication strategy to help customers and consumers understand the cost of reliable energy supply,” the delegates proposed.
Yet another long-term strategy proposed was a harmonisation of the sub-region’s legislative regime to facilitate the opening up of more opportunities for the pooling of resources by West African countries, for the generation and transmission of reliable power supply.
Other key issues discussed at the series of forums were the integration of energy infrastructure in West Africa to facilitate energy sharing among Ghana, Nigeria, Benin and Togo, the optimal use of gas from the West African Gas Pipeline for energy generation and sharing, energy source options, the important role of the civil service in the pursuit of energy self-sufficiency, and political support for all national and sub-regional initiatives intended to end the crisis.
{The author is Editor-in-Chief of the General Telegraph}