POWER DEMAND GROWS OVER 10% P.A.-Says Ministry of Energy

The annual growth rate for electricity demand in the country has exceeded 10% in the last three years, posing a major challenge to the implementation of distribution due to shortfall in capacity.

The revelation, which was contained in a rejoinder by the Ministry of Energy, to a publication accusing the Volta River Authority (VRA) Board of sabotaging the Volta Aluminium Company Limited (VALCO), with inadequate power supply, said:

“Between the first quarter of 2012, and the same period last year, for instance, the system's peak demand has grown by 100 MW (from 1609 MW to 1710 MW).”

According to the Ministry, supply capacity, however, has not kept pace with this growth in demand, thereby putting the power system under great stress in 2012, with the system and its operating reserve margins now lower than professionally acceptable.

“For instance, the system reserve margin for the month of April 2012 was about 3%, which is far below the required margin of 20%,” the Ministry revealed, adding that

“Given the current margin, any slight drop in the available supply or increase in the forecast demand will result in a frequency decay, which can lead to a total system shutdown.”

It said additionally, given the current tightness of the system, VRA is compelled to run its higher-cost diesel plants to meet peak demand, for which extra cost they receive no tariff compensation from the PURC, thus compromising their financial position.

The ministry explained that the system has been forced to shed load from time to time to ensure demand/supply balance, when any units in the system become unavailable due to the erratic gas supply from Nigeria or “for any other technical reasons.”

“Under these circumstances, it would not be prudent for VRA to supply VALCO any additional power at this time, as it would further weaken the system, render it more vulnerable to outages, and threaten general system stability,” the Ministry cautioned.

It said desirous of ensuring that VALCO operates optimally to contribute to employment generation among other benefits, it had been holding frequent meetings with all the parties to assess the situation and explore the possibility of ensuring that VALCO runs the second pot line.

“In fact, the possibility of giving VALCO power to run an extra half pot line at off-peak periods has been discussed by a technical committee, including GRIDCo, VRA and VALCO, set up by Minister for Energy, Dr Joe Oteng-Adjei,” the statement said.

According to the Ministry, “GRIDCo, as the system operator, in its Report dated January 2012, titled, TECHNICAL ASSESSMENT OF THE VIABILITY OF RUNNING VALCO ON ADDITIONAL POT LINES IN THE YEAR 2012, indicated that more electric power capacity has to become available before VALCO's request for additional power during off-peak could be safely met.”

It said even though the report in question pointed to August 2012 as the ideal target date for additional power to VALCO, with May 2012 as the earliest date for such a consideration to be made, Nigerian gas volumes have since “fallen 33% from 2011's levels and the supplies have also become increasingly erratic and unreliable.”

According to the Ministry of Energy, the situation has further reduced system availability, not only by reducing VRA's ability to operate its machines with comfort, switching its fuel use back and forth, depending on the availability of gas, but also by reducing electricity output from Sunon Asogli's 200MW plant when gas volumes have fallen to very low levels.

It said under the circumstances, “the recommended schedules in GRIDCo's report will have to be pushed back further if these recent events are to be factored in,” adding that all parties involved clearly understand that the best option to provide sustainable power to VALCO will be to speed up expansion in generation.

GENERATION EXPANSION PROGRAMME
The Ministry of Energy explains further that with the steam turbine of Takoradi 1 (110 MW) and the new Takoradi III (132 MW) projected to come online in the second half of 2012, VRA will place an additional generation capacity of 240 MW on to the system.

It stressed however, that even though these additions, together with 400MW from Bui in 2013, will go a long way to improve the stability of the system, to make it safe for VALCO to increase its power offtake, “given the rapid growth of electricity demand in the country, the generation capacity additions mentioned above will not be sufficient to ensure system complete stability unless there is a sustained programme to add to the country's electricity capacity,” which is precisely what the Government is committed to doing.

The rejoinder, titled 'Ministry of Energy States Position on Supply of Power to Operate a Second Pot-Line,” were in reference to two stories on the front pages of the Monday, April 30, and Tuesday May 15 2012, issues of The Enquirer, captioned, VRA Fingered for Sabotaging VALCO, and Concerns Grow over VRA Inaction respectively.

CABINET DECISION AND VRA COMMITMENT
The statement said the decision to re-start VALCO was made by Cabinet, with the specific details left to be sorted out by VRA/GRIDCo/VRA, under the coordination of the Ministry of Energy and the Ministry of Finance and Economic Planning.

Signed by Alhaji Inusah Fuseini, Member of Parliament (MP) for Tamale Central and Deputy Minister of Energy (Power), the statement continued that a series of meetings “led to agreement by all parties, including VALCO, on the amount of power to be supplied to VALCO and the rate to be charged for it.”

It said under the agreed arrangement, VALCO's request to have sufficient electricity to run two pot-lines was to be graduated, starting first with VRA guaranteeing to provide sufficient power to run one pot-line, and then for two pot-lines when additional generation capacity comes on stream.

“This,” according to the statement, “was expected to happen on the return of the Takoradi steam turbine and the completion of the Takoradi III project” and “VRA has since January 2011 complied fully with the agreement by supplying VALCO 70MW of electricity, sufficient to run one pot-line.”

The Ministry of Energy said it was committed to “working together with VRA to fulfil its mandate of generating adequate and reliable power for industrial, commercial and domestic use in Ghana.”

It therefore took strong exception to the attempt to personalize the issue in the said publication by singling out VRA's Board Chairman for blame, emphasising that “failure to supply VALCO power to run beyond one pot-line under the present conditions is NOT a case of 'VRA Chairman and Board being adamant', nor sabotage by VRA Management and staff, but one of prudent and responsible management of our vital but delicate national energy system.”

It assured the public that VRA, GRIDCo and VALCO are sister agencies under the same Ministry and are complimenting each other's efforts at meeting the power needs of the country's rapidly growing economy for the benefit of all stakeholders. [[email protected]]