The former Chairman of the Management Team, Volta River Authority (VRA), Kweku Andoh Awotwi, has raised, questions about the government's commitment to developing the infrastructure base of the energy sector to ensure adequate supply of electricity.

He said government's inactions and delays have left heavy users of electricity such as the mining industry and steel-mill firms to pay high tariffs for operating power.

Government has said that it will need about US$400 million this year to develop the energy sector.

However, Awotwi, who is now the Chief Executive Officer of Triton Group, explained at an energy and mining conference in Accra that poor decisions made in the sector is what caused the energy crisis experienced last year - which pushed the government to secure 126 megawatts of power at the expense of the taxpayer while the mining companies built an 80¬megawatt power plant.

The consortium of mining companies that built the 80¬megawatt mining sector power plant last year - at a cost of US$400 million - is negotiating with the VRA to transfer the power plant to the Authority to augment the energy supply shortfall of about 300 megawatts.

"If the VRA several years ago had been able to dispatch Takoradi 1 and brought online Takoradi 2 for the combined cycle of the thermal plant, which has been on the drawing board for the past 5 years, the general public would not have had to pay for the 126 megawatts of power hastily brought into the country last year," he said.

He said government's announcement of plans to build the VRA's capacity to prevent any future occurrence of the energy crisis is still not clear and questioned: "How does government propose to shore-up VRA's balance sheet and reduce its gap levels, currently estimated at US$750 million, if it is to build the capacity of the energy sector?

"And if the private sector is to participate in the sector, are there legal and regulatory frameworks currently in place to allow for their timely investment and participation in the sector, and what credit solutions and payment securities are being offered to the host of private sector participants seeking to supply power to the general public?

"What is the status of the VRA deregulation? Has GRIDCO been operationalised, and how soon would they be providing power to the grid? And why has it taken them so long to operationalise after the VRA Act was reviewed a couple of years ago?

Awotwi said government has also done little to reduce the operational losses of about 30% faced by the Electricity Company of Ghana (ECG) in the distribution of electricity, which has to be paid by the public year after year.

"As the mining sector is being asked to pay more tariffs what steps are taken to make the ECG and VRA more cost-competitive, customer-focused and efficient," he asked.

Currently, mining firms and steel mills are paying about 22 cents per kilowatt hour (kwh) up from 11 cents per kwh - a move government officials have described as necessary to ensure full cost recovery of power to resource the VRA.

He said as the country goes into elections later this year, it is incumbent on the general public to query power-seeking parties on how they would provide adequate energy infrastructure for the country.
"Sadly, the manifestos of the parties have been expansive on the 'what' and not the how.

"We have been promised gas and coal powered electricity, but what role the Ghana National Petroleum Corporation, VRA, ECG and regulatory institutions like the PURC will play in these, we have no idea," he said.


Source: B&FT