Business News of 2013-12-02

Jinapor urges thermal power boost

John Abu Jinapor, the Deputy Minister of Energy and Petroleum, has said the country must increase its thermal power production capacity in order to mitigate the potential impact of expected poor water inflow into the Akosombo and Kpong dams next year.

Currently, the country generates the bulk of its energy requirement of 1,800 megawatts from hydroelectric sources -- mainly Akosombo (1,020 megawatts), Kpong (145 megawatts) and recently Bui (133 megawatts). The total installed power capacity of the country stands at about 2,500 megawatts.

“If we do not increase generation by 2016 we are going to have major problems, because as it stands the Akosombo Dam is not being filled the way we would have wished. The weather pattern seems to be catching up with us in terms of that cycle, so we are likely -- based on the records we are seeing -- to have problems with the water level of the Akosombo Dam around 2015 and 2016,” the Deputy Minister said.

He was speaking at an advocacy programme organised by the Institute of Financial and Economic Journalists (IFEJ) and the Ministry of Finance on the 2014 budget presented to Parliament last week.

Government in its 2014 budget said it plans to add an additional 342MW to the expected installed capacity of 2,845.5MW by completing the first phase of the 220MW Kpone Thermal Power Plant (KTPP), the 110MW T2 (Tico Expansion) and VRA’s 12MW Solar PV project.

Overall, it intends to raise the country’s installed power generation capacity to 5,000 megawatts by 2016 on the back of increases in thermal power generation and solar energy.

“We must begin to take steps now so that by then, if the hydro doesn’t support us, we can have other sources of energy. That is why we are undertaking some of these projects,” Mr. Jinapor said.

An energy expert, Dr. Charles Wereko-Brobbey, said electricity demand now exceeds the capacity of Akosombo and Kpong by several megawatt hours.

“Nobody should get the notion that even if Akosombo was full today it would bring us cheaper energy; the mix will continue to be more and more driven by thermal energy. If we want to get cheaper power, then Ghana’s gas should go into power generation and not fertiliser production.”

He argued that the consumers should be prepared to pay realistic tariffs for power in order to attract investors into the energy sector. “If the bottom line is not providing a rate of return to the investor -- a clear signal that they can recover their cost -- then we have a problem. What I want to see is a rapid move-away by government from the actual provision of these things [utilities].”

Dr. Wereko-Brobbey added: “Government simply cannot pay or find the money to build the kind of energy infrastructure we need in the country. If we really want to avoid blackouts, we must pay the right price for the product we get. There is a direct relationship between how much energy goes into an economy and the state of development in the economy.

We need to infuse energy into our system if we want to be a proper middle-income country.”