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17.04.2007 General News

Government Splits VRA

The Volta River Authority (VRA) has been split into two entities to pave the way for the active participation of independent power producers (IPPs) in the power sector.

Consequently, the government has incorporated the Ghana Grid Company (GRIDCO) and appointed a Chief Executive Officer, Mr Joseph Wiafe, an electrical engineer, to begin the process of setting up a transmission entity separate from the VRA.

The VRA will maintain its function as a power generator.

The Minister of Energy, Mr Joseph Kofi Adda, stated this at a partnership training programme for Ghanaian and American regulatory utility commissioners in Accra yesterday.

The two-day training programme is sponsored by the United States Agency for International Development (USAID. Its objective is to build the capacity of staff of the Public Utilities Regulatory Commission (PURC).

Mr Adda said Parliament amended the VRA Act, Act 46, to allow the separation of the transmission function from the operations of the VRA.

That, he added, gave a level playing field for IPPs to access the national grid and negotiate power purchase agreements (PPAs) for the purpose of providing more power for the system from both the public and the private sectors.

He said the government had also initiated, at Cabinet level, a process to establish an independent source of funding for the PURC.

If approved, he added, the move would strengthen the regulatory body to work much more effectively.

Mr Adda said the government had also instituted measures to ban the use of incandescent lamps in the country, adding that the ban would take effect after Cabinet approval and parliamentary consent.

He said plans initiated to deal with the power crisis were proceeding on schedule and said the power rationing exercise would be over by the end of August this year.

He said it had become clear that the effective regulation of the power sector was a pre-requisite for achieving improved delivery of electricity supply services and noted that in Ghana the regulatory agencies were faced with challenges such as the lack of capacity to carry out their functions more effectively.

Mr Adda stressed the need to focus more attention on the regulatory bodies, saying they needed to be properly resourced to carry out their mandate.

“The efficient performance of the regulators must concern us all: the government, industry, investors, as well as consumers. It is my expectation that the regulatory agencies will be more aggressive in carrying out their mandate, ensure more transparency in the regulatory environment, as well as the sustainability of the regulated industries,” he added.

He said the government also expected the regulatory agencies to derive better performance from the utility companies in all aspects of their operations, adding that that collaboration was imperative to achieve the desired results.

Mr Adda said the development of the secondary gas market was a key component of the country's energy strategy, adding that its development would expand the scope of utilisation and benefits of the natural gas from the West African Gas Pipeline beyond power generation to other important uses, such as the industrial, mining and commercial sectors of the economy.

“The government has, in that regard, facilitated the preparation of the requisite subsidiary legislative instruments by the Energy Commission. These legislative instruments are currently being finalised for consideration and approval by Cabinet and Parliament,” he added.

The Chief of Staff and Minister of Presidential Affairs, Mr Kwadwo Mpiani, in a welcoming address, called for full cost recovery in the energy sector, saying both industrial and domestic users needed to pay realistic tariffs for the electricity they consumed.

The Executive Secretary of the Energy Commission, Dr Alfred Ofosu-Ahenkora, said 60 per cent of the energy consumed in Ghana was from wood products and added that judging by the way trees were being cut for firewood, Ghana's forests would soon become depleted.

He said a Renewable Energy Bill which would integrate renewable energy into the national energy mix was in the offing would be passed by the end of the year.

Story by Mark-Anthony Vinorkor