Expect protracted power crisis - ACEP

The Africa Centre for Energy Policy (ACEP) has declared that measures announced by President John Mahama in the recent State of the Nation Address do not adequately address the current power crisis and therefore consumers, both industrial and residential, must settle in for a protracted power crisis.

A press release issued and signed by ACEP Director of Policy and Research John Peter Amewu noted that, "with Asogli and Takoradi 3, which also require natural gas, the comfort margin will still not be achieved since WAGPCo [the West African Gas Pipeline Company,] 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 projected completion of the Bui Project, expected to bring 400 megawatts on stream by September, said that the project would help save the Akosombo Dam, which is under great distress because it has been overused for some time now.

It said that according to the Akosombo Dam's system plan, the facility is supposed to supply 5,000 gigawatts annually but for the past few years has been forced to supply 7,000 gigawatts, nearly 50 percent greater than its planned limit.

"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 explained that the above stated obstacles have undermined the financial viability of the power utilities.

"For instance, distribution losses led to more than $100 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."

Unfortunately, ACEP said, the president in his State of the Nation Address did not touch on the urgent challenges of poor distribution infrastructure and the power utilities' financial difficulties.

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

It therefore recommended that any short-term plan to address these challenges must include the restoration of the financial viability to 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.”