Gov't to split VRA

Government intends to split the Volta River Authority (VRA) into two separate entities to make it more efficient in the generation of power for the country.

A new publicly owned entity will be carved out of the existing VRA to concentrate on thermal generation in partnership with the private sector actors while the remainder will concentrate on hydro generation.

The new arrangement is to fundamentally alter the country's main power generation utility to respond quicker to the changing electricity landscape, an African Press Organisation (APO) news release sent to the Public Agenda, has revealed.

The revelation comes ahead of the Powering Africa Ghana Meeting to be held in Accra on 17-18 September 2015. The Powering Africa Ghana Meeting has confirmed a strong delegation of public and private speakers, giving participants an insight in to Ghana's power development plans and highlight opportunities for private sector investors.

The national interconnected transmission network is also being upgraded with the Grid Company of Ghana Ltd (GridCo) investing massively in new 330, 225 and 161kv lines.

Ghana's total demand including export far exceeds available power generation capacity. Current suppressed peak demand is about 2,400MW, however only 1,600MW of capacity is available at peak and 1,400 MW at off-peak leaving a deficit of about 800MW at peak.

According to the statement, Dr Kwabena Donkor, Minister of Power for Ghana, announced at Africa Energy Forum (AEF) in July 2015 plans to push through Emergency Power arrangements to beef up the supply situation. They will add about 1,000MW by the end of the current year and provide the platform to pursue medium to long term solutions.

The Ministry is also taking steps to add in excess of 5,000MW generating capacity from natural gas, clean coal and renewable energy sources within the next five years.

To accelerate investments, Ghana is restructuring the Electricity Company of Ghana Ltd (ECG) and the Northern Electricity Company Ltd (NedCo) to deliver effective customer service to consumers and to strengthen their financials to be better off-takers of Power Purchase Agreements.

In a related development, a new report by Price water house Coopers (PwC) says power utility companies and stakeholders across Africa anticipate a brighter and different outlook for the sector in the decade ahead.

Fifty one senior power and utility sector executives from 15 African countries took part in PwC's Africa power & utilities survey. They report continued concern about some of the immediate risks to the power system, but are also optimistic about the longer term prospects for electricity in Africa.

Two-thirds (67%) of those interviewed cited ageing or badly maintained infrastructure as a high or very high concern. Encouragingly, many felt this situation would improve, with only 39 per cent predicting that it would be a similarly high or very high concern in five years' time. And looking ahead to 2025, they anticipate definite step changes in a number of key issues:

An overwhelming majority (96%) say there is a medium or high probability that load shedding will be the exception rather than the norm by 2025.

Indeed, nearly three-quarters (72%) are confident enough to rate that scenario as a high probability.

94% say there is a medium or high probability that, by 2025, the challenge of finding a market design that can balance investment, affordability and access issues will have been largely solved.

70% expect cross border electricity flows to be significant by 2025, accounting for a third or more of electricity generated.

Angeli Hoekstra, Africa Power & Utility Leader, PwC, said: “There is much to be optimistic about and the results point the way to improvements ahead. But security of electricity supply and cost reflective tariffs continue to be the number one challenges. Until they are resolved, power systems will remain stretched, as investments in the power sector will be limited. Addressing cost reflective tariffs while ensuring social equity is a key challenge.”

The survey also highlights the energy transformation that is taking place, as the market vision for the future will be a mixture of large scale centralised generation and local mini-grid and off grid distributed generation according to the fast majority of survey participants (83%).

This is supported by that seventy per cent of the survey respondents believe there is a medium to high probability that advances and cost reductions in green renewable off-grid technology will deliver an exponential increase in rural electrification levels by 2025.

And there is consensus that power companies will need to change their business models to respond to energy transformation. Eighty eight per cent expect that future power utility business models will be transformed by 2030 with a quarter of them saying they will be unrecognisable from those operating today.

Hoekstra commented further: “Technological and regulatory change and new investments present very exciting opportunities to increase electrification access and electricity supply.

“New businesses and business models will be created and Africa will leapfrog into a better and more sustainable energy future if all stakeholders in the sector, from customers to governments, new businesses, regulators and utilities will embrace the opportunity”