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OFDUMSORANDGHANA'SENERGYSECTORCHALLENGES:PART1

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OFDUMSORANDGHANA'SENERGYSECTOR
CHALLENGES:PART1

TheoAcheampong
UniversityofAberdeen

4February2015at10:54

WhydoestheGovernmentcreatetheimpressionthatthemajorchallengewithGhanas
erraticpowersupplyevidencedbythepersistentdumsordumdumisduetothelackof
generationcapacityandthatsigningadditionalpowerpurchasecontractswithindependent
powerproducers(IPPs)willautomaticallyresolvethesechallenges?Folks,nothingcouldbe
furtherfromthetruth!Herewegowithsomebaselinestatisticsontheenergysituationin
Ghanainthisthreepartseries:
1. Theelectricitysupplymarkethasanestimated1015%yearonyeardemanddriven
byapressingneedfornewgenerationcapacity.AsGhanaseekstoexpandits
industrialbaseinthecountrysquestforeconomictransformation,adequatesupplyof
electricityplaysthecriticalfactorandcatalystforindustrialdevelopment.
2. Installedgenerationcapacityavailableforgridsupplyasattheendof2013wasabout
2,936Megawatt(MW)(EnergyCommission,2014).Hydroelectricgenerationfrom
Akosombo,BuiandKpongconstituted53.8%ofthisamountwhereasthermal
generationfromthedualfuelnaturalgas,lightcycleoilanddieselplantslocated
withintheTemaandTakoradienclaveprovided45.9%ofinstalledcapacity.
Renewablesconstitutedonly0.1%whereasLPGgenerationfromGenserpower
providedtheremaining0.2%ofinstalledcapacity.
3. However,onlyabout1,500MWor51%ofthe2,936MWinstalledcapacityhasbeen
availableinrecenttimesduetoamyriadoffactorstheprimaryonebeingthe
unavailabilityofgastopowerthethermalplantsandgovernmentsinabilitydueto
fiscalconstraintstopurchaselightcyclecrudeoilasanalternative.Thisis
compoundedbythedecliningrainfallpatternsforthehydrobasedplants.For
example,theBuihydroplanthaspredominantlyneverrunatmorethan40%ofits
installed400MWcapacitysinceitwascommissionedwithgreatfanfareinDecember
2013.
4. PeakpowerdemandinGhanacurrentlystandsatabout2,000MW.For2014,
Ghanaspeakloadrangedbetween1,9002,200MW(exthe1020%reservemargin
neededforsystemredundancy).
5. Grosselectricitysuppliedin2013wasabout12,871GWhanaverageof1,469MW
perdayagainstaforecastof16,113GWh(1,839MWperday)fortheyear.Ofthe
actualsupplyquantity,hydrocomprisedonly936MW(32%ofthetotalinstalled
capacityor59%ofhydrocapacity)whereasthermalsourcesconstituted527MW
(18%ofthetotalinstalledcapacityor39%oftotalthermalcapacity).This
imbalancecreateda20%supplydeficitbelowtheforecasteddemandnecessitating
loadshedding(a.k.adumsordumsor)tobecarriedoutin2013andbeyond.
6. Whatarethecauses?Thefactorsaremanybuttheyprimarilyboildownto:(a)the
verypoorcreditriskofECG(currentlythesoleofftakeronthemarket)(b)gassupply
challengesfromtheWestAfricangaspipelineasNigeria,ourmajorsupplier,
Chat(Off)
prioritizesherdomesticindustrializationagendaoverregionalintegrationideas(c)
poorinfrastructureplanning,maintenanceandlackofsystemredundancyresultingin
manythermalplantsgoingofflineonoraboutsimilartimes(d)distortedtariffregime
pushingIPPstoaskforsovereignguaranteesinpowerpurchaseagreements(PPAs)
beforecommencingoperations.
7. The2010WholesalePowerReliabilityAssessmentreportestimatedthatGhanaloses
between26%ofGDPannuallynotincludinganumberofindirectcostsoflost
economicoutputduetoinsufficientwholesalepowersupply.Thesechallengeshave
notbeenfullyresolved.Why?IwillexpandonthisinPart2ofthePowerseries!

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OFDUMSORANDGHANA'SENERGYSECTORCHALLENGES:PART1

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AnthonyDuke,NeenyiAyirebiAcquah,KojoAnanAnkomahand34otherslikethis.
8shares
KofiBlanksonOcanseyBrilliantlylucid..
13hrsLike 3

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OFDUMSORANDGHANA'SENERGYSECTORCHALLENGES:PART1

KofiNyarkoGreatpiece
13hrsLike 2
EvronHughesAbsolutelyonpointmydearTheo:"WhydoestheGovernmentcreatethe
impressionthatthemajorchallengewithGhanaserraticpowersupplyevidencedbythepersistent
dumsordumdumisduetothelackofgenerationcapacityandthatsigningadditionalpower
purchasecontractswithindependentpowerproducers(IPPs)willautomaticallyresolvethese
challenges?Folks,nothingcouldbefurtherfromthetruth!"...hereinliestherub.Lookingfowardto
Series2&3
13hrsLike 6
KwakuAzarItboilsdowntolackofstrategicthinkingandpoorplanning.Governmentsareelected
toanticipateandsolveproblems.DUMSORshouldnotcrippleGhanain2015.Itisamassive
failureofgovernment.Unfortunately,inourpartoftheworld,onecanbeineptforaverylongtime
withoutanyconsequence!TheoAcheampong
13hrsLike 11
TheoAcheampongHmm,Evron!Wehavecloseto3,000MWofinstalledcapacityanddemandat
onlyabout2,000MW,however,only1,500MW(50%oftheinstalledcapacity)iscurrentlyavailable
tosupplyelectricitythuscreatingasupplydeficitof~500MW.Theotherhalfliesidlenofueland
ongoingmaintenanceactivities.LikeProfKwakuAzarsays"itboilsdowntolackofstrategic
thinkingandpoorplanning".ItreallybafflesmymindthatacountrylikeGhanawithallthebrainsat
herdisposalshouldbegoingthroughthisMADNESSofdumsor.Notcoolatall!
13hrsLike

KwadwoNyambaGreatandinsightfulbuthowdoespoorcreditconstraintsupplywhenitis
evidentNigeria'sconcentratingontheirlocalmktfirstisnotnecessarilydrivenbylackoftrustin
collectingreceivablesbasedonthewriteup?AlsoifBui'sissuesismostlyduetolackofadequate
rains,wouldagoodcreditofECGchangeanything?RegardlessIthinkthereexistsomecausation
btnthelackofpoorcreditoftheECGtothepoormaintenanceculturewhichleadstowasteof
essentialpowersupply
12hrsEditedLike 1
EvronHughesTheo:weallknowthat.YettheGovernmentwillhavecitizensbelieveotherwise.At
currentdemandlevels,weHAVEinstalledcapacityplusmore.Whileweallagreethatweneedto
increaseinstalled(andbyextensiongenerating)capacitytomeetfuturedemand,thecurrentcrisis
inpowersupplyhasnothingtodowithinstalledcapacity.Iknowthat.Youknowthat.Everybody
elseknows,except,itseems,theverypeoplewhoshouldknow...andtheyKNOW.
12hrsEditedLike 2
TheoAcheampongBroKwadwo,Iwilluntangletheseissuesinpart2sochillformesmallwai.
Thesearemutuallyexclusiveeventswhichsumuptocurrentmesswe'rewitnessing.Dayie!
12hrsLike

KwadwoNyambaTheoAcheampong,itrustyouandlookingforwardtothenext.....
thinkKwakuAzarshouldstartcollectingroyaltieson"DaYie"now
12hrsLike

."DaYie".i

MarciaMamaaKayieAshongTheo,wasteisamajorissuewithourseverestconcernsbeingthe
verypoortransmissionanddistributioninfrastructureandfunctions,however,Iwouldnever
categorizeGhanaasanoncapacityshortenvironment.DemandforpowerinGhanagrowson
average1015%annuallyduetotheexpansionofcertainindustries(ofwhichsupplyisdoesnot
movefastenoughtomeet).OntheotherhandIcompletelyagreethatwemustfirstaddressthe
majorinefficienciesinordertoadequatelysupplyinstalledcapacity,butontheflipendadditional
installedcapacityisnecessarytosupportadevelopingnationwhichwishestodevelopatafast
enoughpace...
12hrsEditedLike 3
KwamenaEssilfieAdjayeTheo,let'spublishthisasaCINpronto!!
12hrsLike 3
KwameSarpongAsieduWhenmenputtheirbrainsandnotmouthstowork.Thanksforsharing
TheoAcheampong
12hrsLike
KwameAgoogiYoucannotbutfallinlovewithintelligentanalysiswhenyoumeetone.Thankyou
Theo.Thishasbeenputforthinseveralwaysbutthegovernmentkeepsdenyingandshiftingthe
postsonthereasonsfor"dumsor".Ijustwishsomeofthosenitwitsisreadingthisjustfor
enlightenment.
12hrsLike 1
MikeyOmaneAchamfuorTheo,dotheseconsumptionfiguresincludewhatweexportto
neighboringcountries,ifany,aswellorisitpurelylocalconsumption?
12hrsLike
AnthonyDukeScottishTheodeliversoncemore
11hrsLike

MarciaMamaaKayieAshongGhanaisanetexporterofelectricity,itexportsapproximately0.7
billionkWhandimportscirca0.1bkWh(theseare2012datahowever),butthefundamentalsstill
holdtrue.
11hrsLike
MarciaMamaaKayieAshongSomenotesonthetypicalnatureofacapacityshortenvironment
whichGhanais:
Mainproblemisthebearingofmarketrisks(volumeandprice)bygenerators(G)(inthiscase
VRA)
Ifthereisno(competitive)marketenvironment,thereisnoopportunityforGtomitigatetheirrisk
Gwillthereforenotbuildwithoutwaystomitigaterisk
Theseenvironmentsstifleinvestmentthatiswhymostinvestmentincapacityshortsystemsare
backedbyafullofftake(govtguaranteed)PPA
11hrsEditedLike 2

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OFDUMSORANDGHANA'SENERGYSECTORCHALLENGES:PART1

MikeyOmaneAchamfuorIwonderifwearestillexporting,giventhelevelofdumsoranddumkoraa
Ghanaiansarefacing.
11hrsLike 1
MikeyOmaneAchamfuorIfthisgovernmentwasthinkingthey'dhavedesignatedcentral
businessdistrictsinourRegionalandDistrictscapitalsas"CriticalDemandAreas"between
workinghoursandensuredthatelectricitysupplytosuchareasdon'teverfail.Theycouldalso
establishIndustiralandBusinessParksacrossthecountryasa"safeheaven"forindustryand
businessesandchargethemaspecialratefordaytime/peakconsumption,especiallyinthe"Free
Zones"areas,andasanaddedincentiveforatractingFDIsinthemanufacturingandagro
processingsectors.Thenextthingafterreducinginefficienciesandlossesintransmissionwould
betoencouragehomeownersandcommunitiestosourceindependentfunding[contributionsby
membersofthecommunityi.e."ntoa",bankloans,contributionsfromDistrictCommonFundsand
selfhelpprojectcontributions]forindividual/communitybased[favoured]electricitygeneration
solutionstorangefromwindandsolarfarmstowasteincineration[addedbenefitofreducingour
mountainsofwasteandgeneratingjobsintheprocess]andfossilfuelbasedplants,theformer
beingpreferred.It'sneverbeenrocketsciencebutourpublicofficersmakeitseemso.
11hrsLike 5
MarciaMamaaKayieAshongMikeytheUKmarketachievessomethingverysimilartowhatyou
aresayingexcepttheUKisinacompetitivemarketenvironmentwhichisalsoincapacityexcess,
thegeneratorsinthesecriticalareasintheUKjoinapowerpool,butthoseintheseareas(where
theybidwithinthepoollimitprice)getpaidadditionalvalueoutputprice,itslikerewardingthemfor
beingindemandheavyenvironmentsTheonlywaytoachievewhatyouhavesaidwouldbeto
incentivizethegeneratorsbuttheonlywaytoincentivizegenerationistohaveamyriadof
generationcapacitynotcontrolledbyoneentity....Therearealsoreallygoodexampleswecan
learnfromEuropeintermsofincentivizingrenewablesthroughFeedInTariffschemes
10hrsEditedLike 1
AnthonyDukeMikeyOmaneAchamfuortheEstimationexpert.Charleyniceone.
11hrsLike 2
GoldaNaaAdakuAddoTheo,archivingontheGhanadatasite,alongwithyourothernotes.
Thankyou,mybrother.
10hrsLike 3
JuliusRKSowuJustonecaveatwhenquotingInstalled,Capacity,PeakDemands,and
redundanciesinanaccountantslanguage,GenerationandtransmissionofElectricity
unfortunatelyfollowsprinciplesofPhysics.
Peakiswhatitsaysitis"peak",inlaymentermsyesyourcarwillthrottleuptomanufacturers
recommendation,howeverholdittherelongenoughandifheatdon'tbreakyourengine,
vibrationswill"analogy"
The"system"wearetalkingaboutissuchanengine"metaphor"andduetoageofsomeparts
"decadesofslackmaintenanceandinvestment"thissystemoftransmissionwhichisahierarchical
structurehasweaklinkspronetothebaneofelectricitygenerationandtransmissionheat.
Todefinetheproblemswehaveyouhavetolookatthewholestructureasawholetodefine
capacity,#JustSaying
10hrsLike 2
MikeyOmaneAchamfuorThankyouSirDuke,millionaireinthemaking,"purveyorofallthathe
surveys"andentrepreneurextraordinaire.
9hrsLike

BismarkAmponsahDoesGhanasupplyElectricitytoanyofourneighboringcountries?Wehave
sunatleast8hoursadayandIcantellthatwehave5hoursofgoodsolarinsulation,whycan'twe
lobbyformoreofthose...allthemoneygoingintocreate.lootandsharecouldeasilyfixatleast2/3
oftheseelectricityissue
6hrsLike 1
PatrickStephensonTheoyoushouldhaveheardtheresponsefromMawuenyegahFuiofBui.....
whenpushedtothewallwiththesamefacts....smh...nowwehaverainfallcomingin...and
governmentisdoingitsbesttoincreaseipp....andBuihasbeenproducingpowerthewhole
time....blablabla....likeIsay...Thenumbersanddatawillalwaysexposethepolitical
expediency....Weawait2and3wai
5hrsLike 2
PatrickStephensonnumbersalwaysexposeinefficientreasoning.....Weawait2and3wai....asfor
thesecrazythinkerstheirtimewillcome
5hrsLike 2
MarrickeKofiGaneMygoodfriendOnkuTheo,thanksforthe"wickedgraphs"love'em!!Youare
rightaboutonethingthegovernmenthasbeenpaintingthepicture"weneedmoreMWsofpower,
generated".OK,here'saslightlytwistedangletothediscussion:theUSAhasbeentryingtoget
intotheGhanaenergymarketforawhileforobviousreasons.Wehavethestartinginfrastructure
andifitcanbemanagedwell,theycouldbeanevenlargernetexpoter.Potentiallyprofitable?
Very!TheUSAoriginallyattemptedtointroduce$900millionintotheGhanaenergystream2years
backasagranttostrenghten"energyregulation"butIbelievetheygotgoodadviceofcoursetheir
realintentwouldhavebeenobviouswhostructuresaregulatorysystemforawhole$900million
grantmoney?(IknowbecauseacompanyIusedtoworkforhadsubmittedabidtobeawardedthe
roleofGrantmanagers).Sothenextbestapproachwastofindajustifiablereasontodoso
"ManufacturePublicConsent"fortheneedtogeneratemorepowerbecauseitsthereasonforthe
"Dumsomnia"andthatswheretheopeningstatementofyourexcitingwriteupcomesin.Yes,the
governmenthadtopaintthatpictureandmakeitcreativelyjustifiableenoughforGE,General
Electrictocomeintothesystemwitharevised$1billionwhichhasjustbeensigned.Weallknow
whatwillfollowafterthatdontwe?VodafoneoriginallycameintosupportGhanaTelecomwe
knowhowthatended.Notnecessarilybadbut.........
2hrsEditedLike 1
GuyFoxxWhendisdumsorbusinessstarted...someofwewonderedwhygovt...whichitselftoldus
figuresforgenerationcapacity&peakpowerdemandwasgoingroundtryingtogivethe
impressionthatgenerationcapacitywastheissue...whentherealitywasdatthewaterlevelsforall

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damsweretoopoortogiveenoughoutput...&also...thatwithfuel@about$100$120perbarrel
wasjusttooexpensivefordaGHgovttopurchase&alsosubsidise...seeingasourfinanceshad
beenheavilymismanagedoutofsync...!!...Generationrequiresfuel...&inourcase...naturegas
renderedhydroelectricityineffective...whilsteconomicmismanagementhastieddagovt'shands
perthermalgeneration...!!...Thuswearewhereweare...!!
33minsEditedLike 1
GuyFoxxHmmm...!!...Suchencouragementtoreturnhome&helprebuilddanationIguess...!!...

32minsLike
TheoAcheampongExactly,GuyFoxx.It'sallaboutfuelavailability.Simplicita!
22minsLike 1
TheoAcheampongOnkuMarrickeKofiGane,IwillwriteabouttherecentGE1,000MWandother
powerdevelopmentsinparts2and3oftheseriessostaytuned.You'rebangonthemoney!
18minsLike
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