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24.04.2007 General News

Energy Crisis-----Why we are where we are (Part 4)

By Ghanaian Lens

After the NDC flagbearer Professor John Evans Atta Mills' press conference on April 4th 2007 on the current electricity crisis in the country, the NPP in characteristic fashion hastily convened a press conference, which was broadcast live and repeated a few days later on GTV not to address the substantive issues raised by Professor Mills, but to hurl insults, invectives and innuendoes on Prof. Mills and other NDC members.
We have reacted to that press conference in our earlier Front Page Comments.
Today, we wish to draw the attention of Ghanaians to the other reasons why we are where we are in the electricity sub-sector and why the entire country has been plunged into darkness mainly on account of NPP incompetence, misdirection and absence of policy. In the process, we shall deal with other issues raised by the Energy Minister and the Presidential Spokespersonn.
The Hydrology of the Volta Lake
It is an established fact that the Akosombo dam goes through a drought period every 7-10 years. It is therefore strange for the Energy Minister to state that “since government got wind of the crisis late last year, we have remained steadfast in the search for a solution that would bring the problem to an end in the short term.”
Government cannot say it got wind of the crisis only late last year because the VRA presents to the Energy Minister daily data on the lake level. But the NPP government chose to do nothing about the problem till disaster struck.
The Load-shedding Exercise
On August 27th 2006, government started a load shedding exercise without a public announcement. The load shedding had a 12 hour light off every 5 days schedule.
From December 23rd 2006 to 2nd January 2007, government suspended the load shedding exercise. From January 2nd to March 4th 2007, load shedding was resumed at the 12 hour light off every 5 days schedule. From March 4th to March 10th 2007, the load shedding exercise was again suspended.
From 10th March to 27th March 2007, he load shedding resumed on the 12 hour light off every 5 days schedule.
From March 28th 2007 to the present, the exercise has been resumed at an intensified rate of lights off for 12 hours every two days.
According to the Energy Minister, the NPP Government “remained steadfast in the search for a solution to bring the problem to an end in the short term”. This it did by doing nothing to improve the supply situation for 8 solid months. For 8 whole months, no emergency power plants were introduced into the system to improve power supply until darkness completely engulfed the nation. For 7 out of those 8 critical months, the major consumer of energy in the country, VALCO, was allowed to operate, leading to a faster draw down of the lake.
The Volta Lake draw down
The Energy Minister states that the lake level has gone below 240 ft level 9 times over the last 25 years. During the 19 years of the PNDC/NDC period, the lake level went below the 240 ft level 5 times, so says the Energy Minister. Even though the Minister did not say so, the inference is that in the NPP's 6 year reign, the lake level has gone below the 240 feet mark 4 times. Is this the record the NPP is proud of and touting as an achievement?
During the PNDC/NDC era, when the lake was drawn down to levels below 240 ft, hydro power was the only source of power available to Ghana.
During the NPP era when the lake was drawn down 4 times to levels below 240 ft and has so been drawn down for the past 8 months with no end in sight, there has been the Aboadze Thermal Plant, which had been put in place through the foresight of the NDC government.
The Aboadze Thermal Plant
The Thermal complementation (Aboadze Thermal Plant) was undertaken to forestall the lake being drawn down to such dangerously low levels ever again.
The Energy Minister states “it is not possible to launch right into heavy investment area like energy when a country is buried in debt,” implying that Ghana was buried in debt during the NDC era. Yet, the Minister admits that the “VRA Aboadze 330 MW plant was initiated during the NDC era.” How did the NDC manage to undertake the US$300 million 330 MW Aboadze Plant which is a “heavy investment” when the country was “wallowing in debt” but the NPP government has not built even a 1 KW Power Plant when it is “swimming in money” under its so called good governance policies?
So-called US$1 Billion Energy Sector Investment
The Presidential spokesman says the NPP government has spent $1 billion in the energy sector. On what projects were these amounts spent? Where are these projects located, and what is the cost breakdown of each of these projects?
The “Miracle” Power from Nigeria and Cote d'Ivoire
President Kufuor promised a “200 MW power supply from Nigeria and Cote D'Ivoire within a fortnight” in his State of the Nation Address. According to the Presidential Press Secretary, this was based on discussions the President had with his colleague Heads of State from the two countries. This country is in deep trouble if policy is announced by our President after discussions with colleague Heads of State without subjecting such presidential talk to critical technical, economic and financial analysis and scrutiny by experts. No wonder the “heroic” announcement by the President was followed by the terse sober statement by the experts at VRA and ECG, who should have been consulted first before the President's announcement, that the interconnectivity was non-existent between the four West Africa countries.
According to Ghana News Agency report of 7 April 2007, the African Development Bank (ADB) has just approved a US$50 million loan to Ghana and Benin to connect the power grids between Ghana-Benin-Togo. According to the ADB, the “project would have the following outputs: 338 km of 330 kv single circuit line from Ghana through Mome Hagou in Togo to Sakete in Benin. The others are extension of 330 KV substation near Tema; a new 330 KV substation at Mome Hagou and extension at Sakete 330 KV substation.” What more proof of the non-existence of interconnectivity do we need?
The President may not have wilfully and knowingly peddled falsehoods, but every one year old child in Ghana and Nigeria knows about the power generation and distribution problems Nigeria faces, and for our President to take the word of the Nigeria President as gospel truth and therefore give him the highest state honour and even name a street, constructed by the PNDC/NDC government, after him for making a promise of electricity which he knew he could not fulfil, is embarrassing, unfortunate and does not show an appreciation of the crisis.
The Ivorians have over the past ten years, been exporting power to Ghana. In fact, it is Ivorian exported power, which Ghana transmits to Togo and Benin. For example in 2005, Ghana bought 814 Gwhr of power from Cote D'Ivoire out of which 394 Gwhr was transferred to Togo and Benin. In 2006, Cote D'Ivoire supplied only 629 Gwhr to Ghana of which 261 Gwhr was transferred to Togo and Benin. The VRA owes the CIE (The Ivorian Electricity Company) tens of millions of dollars for power supplied and not paid for. It is the height of naivety therefore to expect the CIE to continue to supply extra power to an insolvent VRA and in the process, bankrupt themselves.
The Thermal Complementation Programme
The Minister of Energy states that power generation studies for the introduction of thermal complementation into the system was completed in 1986 and that it was “not until 1998, five years after the NDC came to power” that the first unit was put to service. Going by the logic of the Minister's argument, we would ask the question: why is it that for the 21 years that the generation plan has been in existence and for the almost six and a half years that the NPP has been in power, it has not added even 1 KW of power to the electricity generation system?
The West Africa Gas Pipeline Project (WAGPP)
Initial pre-feasibility studies on the WAGPP were undertaken by Italian consultants with a World Bank grant financing in 1989 following a Ghana government (PNDC government) request that the natural gas flared at Nigerian oil fields could be used to produce electricity. Between 1989 and 1994, detailed studies were undertaken to establish the viability of this project. Discussion among the four governments – Nigeria, Benin, Togo and Ghana – took a long time. Discussion with the oil multinationals, which were exploiting the gas in Nigeria, also took a long time. The multinationals wanted assurance that if they spent money to lay pipelines to evacuate the natural gas, there would be takers of the gas. It was not until the 550 MW Aboadze Plant was built, under the NDC government, that the multinationals were convinced that there was a major buyer of the gas within the four countries and then decided to fully commit their resources to the project. Due to lack of appreciation of the intricacies of project development, the Energy Minister states that “NDC had dilly-dallied on the project from 1995”. The NPP government should better check with the other three governments and the multinational companies.
The NDC government is not like the NPP government, which would announce that it has undertaken projects even when no critical studies have been conducted.
It was during the NPP era in government that shares in the WAGPP were called up and it is only the NPP government that has to pay for the called up shares but even then, the NPP government had to borrow funds from the Nigerian government, a project participant, to pay for these shares.
The Natural Gas/Crude Oil Price Correlation
The Minister states that Prof. Mills, in complaining about the “linkage between the price of gas and the price of crude oil” is “misleading the public”. Unfortunately, the Minister does not state how Prof. Mills is misleading the public on this issue. The Minister then goes on to state that “the pricing formula for gas in the WAGP was part of the treaty document approved by Parliament of which his party is part.”
We admit that our party is part of Parliament but is it not this same Parliament which approved the infamous IFC and CNTCI loans, approved the ROPA Act, approved the $35 million Presidential palace project loan, approved the $20 million facility for the [email protected] celebrations, when we have no water so guinea worm infestation is now on the ascendancy? Is it not this same Parliament which approved the NHIS Bill even when people are detained at our hospitals due to lack of funds to pay their bills?
We are all witnesses to how the NPP executive arm of government has been manipulating Parliament to do its bidding using its praise singing majority. Parliamentary approval of bills, loans, etc, does not put a stop to any other person commenting on those issues or bills.
The Bui Dam Project
The Energy Minister said that “there is a distinction between feasibility studies, technical studies and actual construction which the NPP is undertaking n June.” We trust and hope that the construction of the Bui Dam would actually start in June 2007 and that this will not turn out to be one of the usual NPP “promise and fail” platitudes, which Ghanaians have now gotten used to. The Minister says that the “Professor would be invited to the sod cutting ceremony.” We know that the NPP government's stock in trade is sod cutting ceremonies. This is a government, which can cut the sod four times on a 50 km road. This is a government, which cuts the sod numerous times as soon as a project is dreamt up. We know that the good Professor will not waste his time on such useless propagandist grandstanding.
The Akosombo Retrofit Project
The Minister stated at his press conference that “it is not true that the retrofitting of the turbines was done by the NDC government. It is on record that one turbine was done by the NDC government. It is on record that one turbine out of the six was done by the PNDC/NDC. It is the NPP government which retrofitted the 5 remaining turbines and increased the capacity by 90 MW.” What Prof. Mills stated at his press conference was this: “again it was under the NDC government that resources were made available for the Volta River Authority to begin retrofitting the turbines at the Akosombo Dam one after the other, so as increase their power generation capacity from 912 MW to 1020 MW, an increment of 108 MW.”
It is clear that Professor Mills never said what the Minister attributed to him. The knowledgeable Prof. Mills chose his words carefully. It must however be emphasized that the retrofitting project started under the NDC government's watch.
Solar Power
The Energy Minister challenged Prof. Mills' assertion that during the NDC era, thousands of solar systems were installed in the country and stated that during the NDC period, “only 290 systems were deployed in the country. However, between 2001 and now, the NPP government has installed 2200 systems throughout the country”.
Dr. Paa Kwesi Nduom, then NPP Energy Minister, at his press conference on December 16th 2003, stated that “you may already be aware that 4000 solar installations have been made in rural communities by the ministry.”
If by the end of December 2003, a total of 4000 solar systems had been installed and between 2001 and 2007, the NPP government had installed 2200 solar systems, then the inference is that at least 1800 solar systems were installed under the NDC government. Prof Mils spoke the truth. It is the Energy Minister who is being mendacious.

Sahara Energy Resources Co.
We challenge the Energy Minister to a transparency test on the Sahara Energy crude oil supply monopoly deal. The Minister must publish the names of all the companies which participated or have been participating in the crude oil supply tenders. When were these competitive bidding processes held? What were the quotations of all the bidders? Who are the local agents of Sahara Energy in Ghana? Can the Minister publish the price at which each parcel of crude oil was sold to VRA by Sahara Energy?
Strategic Reserve Plant
The Energy Minister, speaking on the Strategic Reverse Plant (SRP), stated that the SRP is “a well intentioned project that was not well executed and had to be stopped to cut Ghana's losses.” The SRP was leased for three years at a cost of US$35 million but produced not one KW of power during the lease period. The Minister's defence of this reckless dissipation of public funds is that the SRP was a well intentioned project poorly executed. Was the Quality Grain Project also not a well intentioned project that suffered execution reversals?
VALCO
The Minister was at his diversionary best when instead of addressing issues raised about VALCO, and how its operations have depleted the Volta Lake and how VRA has been forced to sell power to VALCO at tariffs far below its average cost of production, he decided to rather go into tariffs paid by the Kaiser Aluminium controlled VALCO under the PNDC/NDC era and tariffs paid by the Ghana Government 90% shareholder-controlled VALCO under the NPP era without comparing the cost of generating power under the two regimes. The average cost of generating power now according to the VRA is 589.38 cedis/kw (US 6.27 cents/KWhr) whilst power is sold to VALCO at 253.8 cedis/KWhr (US 2.70 cents/KWhr). For every KWhr of energy sold to VALCO, VRA loses 335.5 cedis/KWhr (US 3.57 cents/KWhr).
During the PNDC /NDC era when power to VALCO was sold at US 2.3 cent/KWhr (not US 1.8 cents/KWhr), the cost of generating power was around US 2.5-US 3.5 cents/KWhr. The effect VALCO's operations have had on the depletion of water in the Volta Lake cannot be played down and the President must accept blame for a bad decision taken to bring VALCO on stream at that particular time.
We rest our Case.
These are the reasons why we are where we are in the electricity sub-section. These are the reasons why the country is in darkness. We rest our case.

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