State of the Nation Address; Matters arising on energy

The writer President John Dramani Mahama, on Thursday, February 25, 2016, delivered the State of the Nation Address to Parliament. In this address, the President declared that his vision to make Ghana the energy hub of the West African sub-region was on course. Specifically, the President expressed delight that the promise he made last year to “fix” the dumsor problem was on track.

In his 2015 State of the Nation Address delivered to Parliament last year, the President, acknowledging the generation capacity inadequacy, the over-reliance on hydro, and the fuel supply challenges as the underlying challenges that had faced the power sector, forcefully declared that he did not want to merely manage the problem, as has been done in the past, but rather wants to “fix” it, once and for all.

Progress made

The President noted the tremendous progress made in addressing the crisis through the mobilisation of emergency power but was, however, quick to point out that more needed to be done to attain sustainability in power supplies.

Way Forward

In that regard, the President recounted what is needed in order to attain long-term stability of the system, including:

•The requirement that more thermal generation be quickly added to the system.

•Achievement of corporate reorganisation of the Electricity Company of Ghana(ECG) to make it more efficient.

•Introduction of more indigenous and non-depletable solar and other renewable energy resources for power generation.

•Deployment of Energy conservation and Energy Efficiency Technologies.

From his address, the programme to resolve the challenges in the power sector, and fix it, can be divided into three phases of implementation: Phase I (Short Term – Managing the crisis); Phase II (Medium Term – Consolidating the gains) and Phase III (Long Term – Fixation of the problem).

Phase I (Short Term – Managing the crisis) has been achieved and now the disparity between supply and demand has been removed.

Phase II (Medium Term – Consolidating the gains) is ongoing and involves initiatives such as:

1.Continuation of the progressive additions of thermal generation units until available generation capacity exceeds demand plus adequate reserve margins of about 15-25 percent of the installed capacity, at all times.

2.Expediting investments to achieve a robust transmission network, to facilitate efficient evacuation of the power produced by the generation segment of the value chain.

3.Expediting the restructuring and reorganisation of ECG to become a reliable off-taker of power.

4.Working towards the achievement of an acceptable cost-reflective tariff, to ensure the financial health of all the utility companies.

5.Introduction of automatic timers to be fitted to deep freezers and set to isolate freezers during the peak period of 6p.m. to 12midnight. For every one million freezers fitted with this device, 250 - 300MW of power could be off the peak load. This will complement the system reliability management in a sustainable and cost-effective manner.

6.Implementing a nationwide retrofit programme to replace all lighting systems with LEDs to further boost the efficiency of power consumption for lighting needs in Ghana.

7.Implementing the President’s National Rooftop Solar Programme to cover 200,000 rooftops which will shave off 200MW of power from the grid and additionally, enable beneficiaries of the programme to interconnect with the grid, through net-metering to transfer excess solar power into the grid and making each of such buildings a small generation plant that supplies self-generated solar power into the grid.

Phase III (Long Term – Fixation of the problem) will work towards the removal of other system bottlenecks. On the policy side, the issues include:

•Challenges in procuring natural gas from WAGP due to indebtedness.

•Absence of pipeline linkage to transport the locally processed gas from Aboadze to Tema;

•Non-adherence to capacity expansion plans.

•Delayed investments.

•Over drafting of the hydro dams (reservoirs).

•Non-adherence to maintenance schedules.

•Non-existence of private sector investments in the transmission system.

From the regulation side, the Energy Commission is to expedite the full implementation of all outstanding issues in the regulatory framework established under the Energy Commission Act 1997 (Act 541) and the establishment of the Electricity Market Oversight Panel (MOP) as required by the Electricity Regulations 2008 (L.I. 1937), and others in the national electricity grid code.

Conclusion

In conclusion, President John Dramani Mahama’s vision of fixing Ghana’s perennial power crises is feasible and is a medium to long-term process that requires robust policies and planning schedules, effective regulatory practices, enforcement of existing legislations and the practice of prudent financial management and discipline of all the utilities along the whole value chain of the power industry.is Chairman, Energy Commission