Challenges in the energy sector which have occasioned the current load shedding and power rationing in the country are two-fold: the lack of investment into the sector and inadequate generation capacity reserve, at least from the standpoint of the VRA.
The Electricity Company of Ghana (ECG), the country’s power supplier and distributor, also sees the lack of revenue to finance critical capital investment projects in the distribution chain as one of the major factors contributing to the inadequate power supply in the country.
On the production side, the recent challenge has been exacerbated by the lack of gas supply, which limits the thermal generation capacity of available thermal plants. The Sunon Asogli Power Plant, one of the country’s IPPs which runs on gas, with a generating capacity of 200 MW, has for some time now not operated at optimum capacity due to the lack of gas.
The company has also put on hold the second phase of its power project in Ghana, involving some 360 MW, due to the lack of fuel. The company recently disclosed that it lost approximately $15m due to the interruption of gas supply from Nigeria between August 2012 and July 2013.
The West Africa Gas Pipeline (WAGP), a project jointly commissioned by Nigeria, Ghana, Benin and Togo to transport gas from Nigeria’s oil producing enclaves to feed power generating plants in the aforementioned countries has been more of a drain than beneficial to the partner countries.
With the huge investments pumped into the project, proponents were hoping for a constant supply of gas from Nigeria which at the time its conception, was flaring its gas resources. However, with demand for gas increasing on the world market and Nigeria suddenly finding a need for this resource, the price of the product has become an issue and supply has sometimes ceased for lengthy periods.
The picture looks even bleaker if one considers that Nigeria has started its $20bn Trans-Saharan project, which, when completed, will transport about 30bn cubic metres of natural gas from its Warri oil fields to
Europe. This would mean that its gas supply to Ghana through the WAGP might reduce further from the current supply.
Apart from generation challenges in the energy sector, one other factor that has affected energy delivery in the country is transmission. The country’s transmission lines need massive upgrades. The old worn-out lines are contributing hugely to the generation losses in the system.