Turkey to generate 450 megawatts of power in ships to Ghana

Turkey is building two electricity-generating vessels to produce power to Ghana that is equivalent to more than one-fifth of the West African country's electricity needs.

Karadeniz Energy Group, the energy wing of the Turkey-based Karadeniz Holding, is spearheading the construction project and when it becomes operational will contribute up to 450 megawatts of power to Ghana's national electricity grid.

"Karpowership Ghana Company will be supporting the Electricity Company of Ghana and the Ministry of Energy and Petroleum, while providing a turnkey solution to deliver fast-track electricity to meet the country's high energy demand," company director Patrick O'Driscoll told Anadolu Agency.

Karpowership Ghana Company Limited, a subsidiary of Karadeniz Energy Group, the energy wing of the Turkey-based Karadeniz Holding, signed a ten-year power purchase agreement in June with the state-run Electricity Company of Ghana (ECG).

The company will build two floating power stations at a total estimated cost of $1.2 billion.

"The cost of a ship is $600 million, but this has been pre-financed by Karpower because it is an independent power producer," Ebenezer Baiden, a member of the tariff team at ECG, told AA.

"Ghana will only have to pay them every month when they start generating power from May 1, 2015," he added.

ECG, which does not generate power and depends on various state-owned and private power producers, has made a $50-million commitment to the deal.

"It is collateral to say that when they sail from Turkey to Ghana, we will not relent on the deal," Baiden explained. "We produced the bank guarantee to Karpower to prove our commitment."

The deal is believed to be the largest Turkish investment project in Ghana.

Karadeniz is the developer, owner and operator of a fleet of power ships with an overall capacity of more than 1,100 megawatts.

It currently has three ships in Iraq, two in Lebanon, one in Pakistan and one in Dubai.

The company reportedly supplies 10 percent and 20 percent of Iraq's and Lebanon's respective electricity needs.

Much needed

The power ships will dock at Tema and Takoradi – Ghana's two port cities – near suitable grid interconnection points.

They will contribute up to 450 megawatts of power to Ghana's national electricity grid.

"It is projected that with the two power ships, Karpowership Ghana will eventually supply 21 percent of the country's [power] generation [based on 2013 figures]," O'Driscoll asserted.

Karpowership Ghana said the deal would be an economical solution to Ghana's existing electricity supply – which relies on expensive crude oil – while providing employment and attracting badly needed foreign direct investment.

"With the use of low-cost fuel, the power ships will deliver a total cost of electricity into the grid that will enable a competitively priced tariff to deliver savings for the government," said O'Driscoll.

He added that the power ships would initially use economic – and abundant – Heavy Fuel Oil (HFO) to generate electricity, but would transition to natural gas during the project's second phase.

Baiden, the Ghanaian official, said the power ships would run on HFO for the first five years, switching to natural gas in the sixth year.

While the ships are running on HFO, Ghana will pay $0.19 for each unit per kilowatt. When they start running on natural gas, the cost will fall to $0.15.

Edward Bawa, an Energy Ministry spokesman, said the power ships would help improve the West African country's energy situation.

"There is an issue where the load demand is almost the same as the amount of power available, so the reserve margin is non-existent," he told AA.

"Technically, we are supposed to have about 20 percent of our installed capacity being our reserved margin," Bawa said.

"If we are able to have this facility, anytime we have a challenge with any of our plants, we can rely on it," he added. "So this will come in to plug that gap of deficit that we have."