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Apr 10, 2015

Government prepares to receive power barges from Turkey


There are preparatory works ongoing at the Tema harbour toward receiving two power barges being imported from Turkey to supplant power production in Ghana, Deputy Minister of finance Cassiel Ato Forson has told Ultimate Breakfast Show host Prince Minkah.

Mr Forson said he is “aware that some preparatory works have just started at the dock in Tema, the fishing harbour where the ship is going to dock and they are going to erect the cables and sometimes do underground cables to evacuate the power to the national grid.”

“So some work has started, and I can assure you it’s really going to be good and it’s going to help resolve the power outages,” he said.

Ghana is currently shedding between 400 and 700 Megawatts of power depending on supply and demand.

As part of measures to mitigate the crisis, the Government of Ghana began processes to bring in the two barges, which are expected to dock at the quayside by April this month.

The barges cost $250 million. Each has a generating capacity of 225 Megawatts. The Ghana National Petroleum Corporation (GNPC) is financing the procurement.

This is not the first time Ghana is procuring power barges to help the power situation. A 125-Megawatt barge, christened Osagyefo Barge procured by the Kufuor administration in 2007 has remained dormant.

According to Mr Forson, the finances to the Turkey barges have been provided, “so we have performed the part of our bargain.”

Ghana is currently reeling under a worsening power crisis, which the President and the Minister of power have explained is the result of poor water levels in the three hydro-electric power plants – Akosombo, Bui and Kpong – as well as lack of gas from the West Africa Gas Pipeline coupled with faulty equipment and plant shutdowns for routine maintenance.

According to the Energy Commission, Ghana’s installed generation capacity available for grid supply as of 2013 was about 2,936 Megawatts. Hydroelectric generation at Akosombo, Bui and Kpong constituted 53.8% of this amount whereas thermal generation at the dual fuel natural gas, light cycle oil and diesel plants located in Tema and Takoradi (Aboadze) provided 45.9% of installed capacity. Renewables constituted only 0.1% whereas LPG generation from Genser power provided the remaining 0.2% of installed capacity.

A recent analysis done by some economists belonging to the Ghana Growth and Development Platform (GGDP) said power demand has been estimated to increase 10-15% year-on-year in the past three decades. Thus, new generation capacity must increase by at least the same percentage per year in order to support expanding industrial, institutional, commercial, household and other needs as the country grows and develops.

Current supply and demand condition

1. However, only about 1,500 MW or 51% of the 2,936 MW installed capacity has been available in recent times due to a myriad of factors, the primary one being the unavailability of gas to power the thermal plants and government’s inability due to fiscal constraints to purchase light cycle crude oil as an alternative.

This is compounded by the declining rainfall patterns which affect the hydro plants. The Bui hydro plant, for example, has predominantly never run at more than 40% of its installed 400MW capacity since it was commissioned with great fanfare in December 2013 due to the water level being below the level needed for generation. Thus, the dry season we are in currently has to end before rainfall can increase the water level to allow generation.

2. Peak power demand in Ghana currently stands at about 2,000 MW. For 2014, Ghana’s peak load ranged between 1,900-2,200 MW (ex the 10-20% reserve margin needed for system redundancy).

3. Gross electricity supplied in 2013 was about 12,871 GWh (an average of 1,469 MW per day) against a forecast of 16,113 GWh (1,839 MW per day) for the year. Of the actual quantity supplied, hydro comprised only 936 MW (32% of the total installed capacity or 59% of hydro capacity) whereas thermal sources constituted 527 MW (18% of the total installed capacity or 39% of total thermal capacity). This condition created a 20% supply deficit in relation to forecasted demand, thus necessitating the load-shedding (a.k.a ‘dumsor’) that has been carried since 2013.

4. The 2010 Wholesale Power Reliability Assessment report estimated that Ghana loses between 2-6% of GDP annually due to insufficient wholesale power supply, which excludes a number of indirect costs of lost economic output.

In the first of a three-part analysis on the crisis, GGDP said the main factors responsible for the current supply condition are: “(a) the very poor credit risk of ECG (currently the sole off taker on the market); (b) gas supply challenges from the West African gas pipeline as Nigeria, our major supplier, prioritises her domestic industrialisation agenda over regional integration needs; (c) poor infrastructure planning, maintenance and lack of system redundancy resulting in many thermal plants going offline on or about similar times; and (d) distorted tariff regime pushing IPPs to ask for sovereign guarantees in power purchase agreements (PPAs) before commencing operations.”

The group added that the “unavailability of supply from Bui currently, is the primary reason why the ‘dumsor’ has worsened since December 2014.”—StarrFMonline.com