Business News of 2014-04-23

Looming crisis: Akosombo Dam water level to drop

The Akosombo Dam is expected to record poor inflow of water in the next two years, which will lead to a shortfall in electricity generated from hydro, an informed analysis of water inflow into the dam has shown.

The minimum operating water level for the Akosombo Dam is pegged at 240 feet. However, the water inflow into the lake has recorded consistent reduction in year-end inflow since 2010. The water level in December 2010 was 275.40 ftt; 271.97 ft in 2011; 268.50 ft in 2012; 257.80 ft in 2013.

For the first quarter of 2014, the water level has continued to dwindle. January recorded an inflow of 256 ft; 254 ft in February; and 252 ft in March.

Historical analysis of the water inflow into the Akosombo Dam indicates that there are 24 years out of 47 years (51%) that average-to-above inflows were recorded. Typically, one year of below average inflow is followed by another year of below average inflow.

The worrying trend has raised concerns about mitigation measures put in place to bridge any potential shortfall in hydro power generation.

This portends an increase in thermal power generation and a cutback on hydro power --reversing the current energy mix of 63 percent hydro and 36 percent thermal power generation going forward.

Given the cost of generating power with crude, consumers are ultimately expected to pay more for power going by the Public Utilities Regulations Commission’s (PURC) automatic tariff adjustment formula if gas supply from both Nigeria and the Jubilee Field is not available in the required quantities.

“We will experience challenges come 2015 and 2016 if we don’t manage the reservoir well. The earlier we get an alternative source of fuel the better. About 41-42 percent of global electricity generation is coal-based. We need to explore alternatives now,” Dr. Kwabena Donkor, Chairman of the Parliamentary Select Committee on Mines and Energy told the B&FT

The Akosombo Hydro Generating Station, the largest hydro installation in the country, generates 1020 Megawatts of power. Each of the installation’s six turbines generates 170MW of electricity. The Kpong Hydro Generating Station also generates 160 MW from four installed units.

The Station, according to sources, has been over-drafting for the last six years. In 2013, the Station exceeded its planned generation of 7,100 GWh by 780GWh to supplement the thermal power generated by the VRA plants and other independent power producers. The Station is also expected to over-draft about 780GWh this year.

The over-drafting of waters of the Akosombo Lake for power generation has been necessitated by the power challenges brought on by the shortage of gas from fields in Nigeria. The country's energy-mix is made up of 1180 Megawatts hydro by the Volta River Authority; Bui Hydro 400MW; thermal (VRA) 922MW; thermal -- Independent Power Producers 310MW; and solar 2.5MW.

Rising electricity demand, which is driving a shift from hydro power generation to thermal power generation, according to energy experts requires more investors in the oil and gas sector that will produce gas to power thermal plants.

The largest power producer, the VRA, has had to rely on the importation of expensive crude oil to power its plants.

Source: B&FT
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