Business News Sat, 28 Feb 2015

SOTN: Mahama tempers energy crisis with promises

The President, John Mahama on Thursday delivered his third State of the Nation address with a promise to solve the country’s energy supply challenges that have and continue to ravage business confidence and outlook in the country.

In about two and half long speech that provided little evidence to convince the public and business operators of what it’s being done to fix the energy challenges in the short term, the President declared: “In the past what we have done has been to manage the situation.

I do not intend to manage the situation as has been done in the past. I intend to fix it! I owe it to the Ghanaian people. I, John Dramani Mahama, will fix this energy challenge,” amidst cheers from members of the ruling National Democratic Congress and despondency from the opposition New Patriotic Party who were dressed in black and red, a turnout which the minority leader said was in protest against the erratic power crisis and the deplorable state of affairs in the country. He promised to present the true state of the nation address next week Wednesday.

For many Ghanaians who recollect last year’s State-of the-nation address, there will likely be a feeling of boring familiarity with the President’s promises--which do not seem to be fulfilled quickly enough.

This time, the President’s hopes largely rest on the development of the Sunon-Asogli Phase 2, which will add 350 megawatts to the country’s installed capacity and a 750MW from coal to be produced by Asogli.


Additionally, CenPower will bring on-stream 350MW and 1,000MW from General Electric while VRAs T4 will add 185MW and Kpong plant at Tema will also add 220MW. Jacobsen and Amandi will also add 360MW and 240MW respectively.

Other plants and power sources are also expected to add about 330 to country’s generation capacity to bring the total installed capacity to more than 6,500MW.

However, none of the aforementioned projects are expected to be completed by the third quarter of 2016, according to the timelines of the developers.

Nonetheless, the President says three emergency power barges to be procured from Karpower ship in Turkey and APR from United Arab Emirates as well as one from General Electric will help to add 1,000MW to address the energy shortfall in the next few months.

But an energy expert with the Africa Center for Energy Policy, Dr. Mohammed Amin have argued that the emergency power barges will likely be ready within the last two months of this year.


Currently, businesses and consumers are faced with an intense erratic power supply situation as the Electricity Company of Ghana- the country’s main power distributor- continues to cut supply by about 450MW everyday resulting in a debilitating 24 hours of lights out against 12 hours of light- the worse load shedding schedule in country's history.

This is in addition to widespread unplanned power outages in various parts of the country, to the disgust of domestic consumers and industry alike.

President Mahama observed: “I know businesses are suffering. I understand the impact of the energy shortfall”.

He noted that even though the energy supply challenges have periodically confronted the nation, the impact this time is perceived to be enormous as access to electricity has been widened to a lot more communities, making Ghana the second country after South Africa to have the highest access to electricity in sub-Saharan Africa.

“Perhaps the impact of the energy shortage is felt much greater today not only because of the growth of our economy, but also because many more people have access to electricity than in the past. Access to electricity in Ghana is 76% and ranked 2nd only to South Africa in sub-Saharan Africa,” he added.


Surging domestic and industrial demand for electricity in Ghana increased to an all-time high of 12.38 percent in 2013, growing from the 2012 peak of 1,728.9 MW to 1,942.9MW at the close of last year.

Over the last four years, however, the average year-to-year growth in demand for electricity has been about 10 percent and the President added: “It means that conservatively, we would have to double our electricity supply capacity every eight years if we are to keep up with demand.”

The peak demand for 2011 was 1,664.3MW -- a 10.52 percentage growth over the 2010 demand of 1,505.9MW.

The estimated demand is growing and current projections indicate that the country’s requirements for electricity will hit 2,764.2MW this year.

For a country currently using under 2,000MW of electricity, Ghana ought to be bringing on-stream 200MW of new capacity every year. This additional capacity requires US$200million of investment.

The President promised to also complete reform in the power sector saying: “We will transform ECG into a customer responsive unit. Government cannot continue to subsidize power.”

He said the government as part of efforts to reduce reliance on hydro source of energy will undertake other renewable energy projects beginning with a prepaid solar meter scheme, for people in rural areas, to help the country to save “200megawatts of power daily.”

He said the rollout of this project will also target micro enterprises in the countryside.

“We have also started the conversion of CFL bulbs to LED bulbs. In many areas, solar powered LED street lights have been installed. This has the potential to reduce consumption of power by lighted bulbs by up to 60%. In addition, the LED bulbs last longer, in some cases up to15years,” he added.

Source: B&FT