Power sector ready for take off

Despite the challenges the power sub-sector of Ghana is facing currently, it can be noted that many achievements have been chalked up in the sector.

On the generation front, following the inauguration of the Bui Hydroelectric Project in 2013, the Ministry of Energy and Petroleum has been working closely with the respective power generators to bring about the needed generation additions. 

The TICO Expansion Project (110 MW) is currently about 90 per cent complete and is expected to be inaugurated by the end of this year.

Generation challenges and opportunities

The Kpone Thermal Power Project (220MW) will see the inauguration of one of the two units in December 2014. Both units will begin commercial operations by the first quarter of 2015. 

The project was about 80 per cent complete as of September 2014.

Noting the fact that water inflows into the Bui and Akosombo reservoirs has not been encouraging during the last few years, the Ministry of Energy and Petroleum, in order to eliminate the consequential effect on power supply in 2015, is working with the Electricity Company of Ghana (ECG) to bring into the country power ships of capacity 2x225MW to be operational by the second quarter of 2015. 

The above-mentioned projects form part of the government’s objective of achieving 5,000MW of installed generation capacity by 2016.  

The Ministry of Energy and Petroleum has, therefore, been working assiduously with the relevant stakeholders towards the achievement of the objective, with many power generation projects lined up, some at the construction phase and others in the preparatory stages prior to commencement.

Jacobsen and Amandi Thermal Power projects

One significant milestone that was achieved recently was the parliamentary approval obtained on December 12, 2014 for government consent and support agreements (GCSAs) for the construction of two thermal power plants by independent power producers, namely Jacobsen Jelco (Gh) Limited and Amandi Energy Limited. 

This approval will allow for the achievement of ‘financial closures’ that will pave the way for the commencement of construction work.

The reason for the request for approval for the GCSAs is as follows: Owing to the current financial position of the ECG, the respective lenders to the two projects want to ensure that their investments will be secured. For that matter, they are requesting GCSAs to backstop the ECG’s payment obligations under the PPAs. 

Under the GCSA, the government undertakes to assume the payment obligations of the ECG if the company defaults and the default is not cured. 

To ensure that this does not happen easily, payment security arrangements have been provided for in the power purchase agreements (PPAs) between the ECG and the companies. 

Jacobsen and Amandi have gone through the necessary processes in order to operate as IPPs in Ghana. For the avoidance of doubt, the companies have obtained approved tariffs from the Public Utilities Regulatory Commission (PURC),  licences from the Energy Commission and environmental permits from the Environmental Protection Agency (EPA) and also concluded inter-connection agreements with the Ghana Grid Company (GRIDCo).

The companies have also concluded PPAs with the ECG.

Jacobsen

The Jacobsen project is a 360MW dual-fired combined cycle power plant to be located at Aboadze in the Western Region. The total estimated cost for the engineering, procurement and construction (EPC) for the 360MW combined cycle power plant is US$637.4 million.

Amandi

The Amandi project, on the other hand, is a 190-240MW dual-fired combined cycle power plant to be located also at Aboadze. 

It is to be noted that following the parliamentary approval, Amandi will have to select, through a procurement process, either a 190MW GE plant or a 240MW Siemens plant. 

The total cost for the 190-240MW plant is estimated at between US$409.12 million and US$528.82 million.  

Other IPPs that are at advanced stages for construction work to commence include but not limited to: Sunon Asogli expansion, 360MW; Cenpower, 350MW; and GE, 1,000MW.

Transmission improvement projects

To ensure a robust transmission network for the growing power demand, GRIDCo is implementing the Sub-stations Reliability Enhancement Project (SREP) to improve operational reliability, security, control, among other such initiatives.  

The following projects are, therefore, worth mentioning: the Sunyani–Mim 161kV line upgrade was completed in February this year, while the Kumasi 2nd Bulk Supply Point (BSP) was also completed. 

Work on the Tumu-Han-Wa 161kV line is 80 per cent complete. The Wa and Tumu sub-stations are to be inaugurated by the end of 2014. 

The Prestea-Bogosu 161kV line is 90 per cent complete, while the Kpando-Kadjebi 161kV line is 35 per cent complete. 

Another critical transmission project being pursued by GRIDCo, with the support of the Ministry of Energy and Petroleum, is the proposed Prestea-Kumasi transmission project to be funded by a facility from the Korean EXIM Bank.

The loan agreement is currently before Parliament for approval.

Distribution improvement projects

On the distribution front, the ECG undertook the following activities to improve supply reliability, reduce system losses and improve operational reliability: system loss and network improvement project in Accra West and Teshie, which is expected to  significantly reduce losses; upgrade of eight primary sub-stations and migration of 2,100 out of 2,555 MDAs to the prepayment metering system. 

Three new BSPs and 11 new primary sub-stations are under construction, just to mention a few.

Several other distribution projects are currently ongoing in order to keep up with the increasing demand for power.

Rural electrification

In line with the goal to achieve universal access to electricity by 2016, over 1,000 communities were connected to the national electricity grid in 2013. 

As of October 2014, 1,134 communities had been connected to the national electricity grid. 

The national electricity access rate had increased from 72 per cent in 2013 to 76 per cent as of September 2014. For 2015, over 1,500 communities will be connected to the national grid from various interventions, with the expected average access to electricity to be 80 per cent.

Conclusion

The Ministry of Energy and Petroleum is very much aware of the challenges Ghanaians are facing in respect of power supply and it is sustaining relentless efforts with its stakeholders to improve the situation.