These savings will come from the utilization of gas from the Sankofa fields.

[contextly_sidebar id=”rUk7wTuiKssKwXHgLFNF9GL6QfVX4pUm”]Mr. Aidoo justified the Akufo-Addo’s administration’s extension of the deal it once criticized, and said the previous deal was not cost-effective because of the 10-year duration.

It is unclear what the new terms are, but the company recently announced it will move from using Heavy Fuel Oil [HFO] to natural gas when it moves the vessel from Tema to Takoradi.

The Karpowership from Turkey has the capacity to supply 470 megawatts (MW) of power to Ghana.

“The basic structure of the deal then was totally wrong. It was nothing to write home about… We’ve renegotiated the Karpower deal and stretched it over 20 years to ensure value for money,” Mr. Aidoo said on Eyewitness News.

“If you sign a power purchase agreement over a short period of time; that was 10 years, what it meant was that the good people of Ghana would virtually have to pay through the nose over a 10-year period which necessarily means they would have to pay higher tariffs. To stretch over a longer period will [see tariffs] come down to somewhere in the region of 10 cents per [kilowatt hour].”

The tariffs under the previous deal stood at around 15 cents per Kilowatt hour.

Aside from the reduced tariffs, Mr. Aidoo added that, extending the deal also “stabilized the power in the west and at the same time utilizes gas from the Sankofa fields, which if we didn’t will cost the government somewhere in the region of $60 million dollars per year.”

Retort from Minority

The Member of Parliament for Damongo Constituency, Adam Mutawakilu, however said the renegotiation was nothing exciting.

He also said the reduced tariffs as a result of the extension was no surprise.

“We know Karpower is a ship. The moment you extend the period, the tariff will come down so it is not magic that they have done. But what they have done is that, by going that way, they will not be able to build an asset for the country. That means after 20 years, the ship goes back.”

The MP also maintained that the ship was not needed after 10 years “because we have excess capacity and that becomes an asset to the nation.”

‘Karpower barge deal makes no sense’ – Bawumia

In December 2015, Dr. Mahamudu Bawumia, then running mate to Nana Addo Dankwa Akufo-Addo, said it “made no sense” for government to secure the power barge as an emergency solution to the power crisis, explaining that the deal did not give the country value for money.

The 225 megawatts power barge docked at the Tema Port in December 2015, to augment the shortfall in power supply at the time.

Per Dr. Bawumia’s analysis, “A 225 megawatts plant like the Karpower Plant that we are renting, will cost some 225 million dollars if we wanted to purchase it; and we will own it. Under the Karpower deal, we will pay for the power from the barge for the next ten years whether we use it or not. The African Center for Energy Policy (ACEP) estimates that based on the capacity charge alone which is 5.6 percent per kilowatt hour, it will cost Ghana close to one billion dollars over the next ten years for the energy from the barge. This, however, excludes the cost of fuel which will require about 35,000 tones every month. After ten years, the barge will sail away and with this one billion dollar, we could have built a 1,000-megawatt plant for ourselves. Power from the barge will also cost at least twice what it cost to supply power from Takoradi. This really does not make sense” he concluded.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post We’ll save $60m yearly from renegotiated Karpower deal – Dep. Minister appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to the Minority, the Special Petroleum Tax must be scrapped to ensure a reduction in the price of fuel.

Speaking in an interview with a section of the media on Wednesday, Minority spokesperson on Mines and Energy, Adams Mutawakilu said there is no justification for keeping that tax because “the purpose for its introduction is no more needed.

[contextly_sidebar id=”DirzphHfghB4Pxv2QYWvB35HVQwQa3YQ”]He said that tax was introduced in 2015 to boost government’s revenue from the oil sector because prices of oil dropped from $60 per barrel to $28 “per barrel which displaced government revenue.”

“As such, President Mahama and his government thought that they should introduce what they called the Special Petroleum Tax of 17.5% with the intention that when petroleum prices rise up to 60 and above, this tax will go off. Looking at the current situation, I think that the government is taking Ghanaians for granted. In our budget, they estimated $57 is what they expect to see in terms of revenue in the oil that we sell. Today it is $63.29 when I checked this morning. Now that is beyond the expected revenue. That means the government is making more revenue than expected in terms of our domestic oil,” Mutawakilu explained.

Mutawakilu, who is also the Member of Parliament for the Damongo Constituency in the Northern Region made the call following pressure from civil society organizations on the government to reduce prices of petroleum products.

Hundreds of commercial drivers and consumers of petroleum products took part in a demonstration organized by the Chamber of Petroleum Consumers (COPEC) in collaboration with the Industrial and Commercial Workers Union (ICU) in Accra.

The demonstration was to force the government to reduce taxes on petroleum products.

NPP gov’t taking Ghanaians for granted

Mutawakilu in the interview further accused government of taking Ghanaians for granted.

“ When circumstances are tough, Ghanaians will understand you but when circumstances are comfortable, please don’t overstretch Ghanaians. They were patient when petroleum prices were low…The Vice president, then running mate, said government was insensitive and that when they come they will take off the special petroleum tax. Today we cannot say prices are low, the prices have risen and therefore there is no reason or excuse leaving this special petroleum tax as revenue. There is no reason for it unless they have changed its objective,” he added.

Govt’s revenue structure will collapse if…

But the Chief Executive Officer of the National Petroleum Authority (NPA), Hassan Tampuli, has insisted that government cannot scrap or review taxes on petroleum products downward any further.

According to him, the taxes have been incorporated into government’s revenue projections for the year and any attempt to scrap any of them could spell doom for the current revenue structure.

“You would agree with me that government has some obligations and these obligations are based on the projected revenue and the revenues that we have accrued. These revenues include the price stabilization and recovery levy. Now that lots of revenue for the government.”

“If you are saying that we should remove completely the Special Petroleum Tax, price stabilization levy among others, then you are just asking for the collapse of the revenue as far as government projects are concerned. What government is doing is in a way responding to the needs and concerns of the Ghanaian people by reducing the price figure by 3%,” he added.

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By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
Follow @AlloteyGodwin

The post Fuel price hikes: Gov’t taking Ghanaians for granted – Minority appeared first on Citi 97.3 FM - Relevant Radio. Always.

John Mahama’s then National Democratic Congress government had targetted the setting up of 200,000 rooftop solar projects for small businesses and residential users.

[contextly_sidebar id=”hSzi6OKQUduYiBsOcp2Plvu8NvS5h0gG”]The status of the project is unclear, and the NDC MP, speaking on Eyewitness News, questioned if the solar rooftop project would not rather provide better consumer relief than the recently announced average of a 14 percent reduction in electricity tariffs for non-residential users.

Mr. Mutawakilu noted that, the solar project also targeted small businesses like tailors and hairdressers, which President Akufo-Addo announced were to be the immediate beneficiaries of the tariff reduction.

During then-President Mahama’s State of the Nation Address in 2016, he indicated that “several small and medium enterprises have been provided with rooftop solar following my announcement of a target of 200,000 rooftop solar projects for small businesses and residential users.”

Mr. Mutawakilu said the solar project, “by the end of 2015 covered about 1,000 customers where solar rooftops are mounted on these hairdressers’ shops so that, at the end of the day, they don’t depend on the national grid, thereby giving the relief.”

“So we would like to know government’s position on that. Have they cancelled it? If they have cancelled it, is it actually benefiting compared to the solar rooftops where they will no more depend on the national grid and they don’t pay any electricity bills? Which of these will be better? Government should state its position. If they are still going on with it, they should let us know. If they have abandoned it, they should let us know,” the MP stated.

Non-residential classifications

The President, in his well-received tariff reduction announcement, revealed that barbers will have tariffs reduced by 18 percent; 15.7 percent for hairdressers and beauticians, and for tailors, 9.8 percent.

Following this, Mr. Mutawakilu also questioned the basis of specific reductions for specific non-residential groups in light of the fact the Public Utilities Regulatory Commission [PURC] had six broad consumer groups; residential, non-residential, special load tariff (low voltage), special load tariff (medium voltage), special load tariff (high voltage) and high voltage mines.

“We have not reclassified them to individuals such as barbers, tailors and hairdressers,” the NDC MP remarked.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Mutawakilu demands answers on NDC’s solar rooftop project appeared first on Citi 97.3 FM - Relevant Radio. Always.

The announment was made by President Nana Akufo-Addo, but Mr. Mutawakilu contends that “announcing the reduction when PURC hasn’t even done the major tariff review is taking over the work of PURC.”

[contextly_sidebar id=”cmje5mne9lbH9xDQjjYasTt72vxzxZIk”]”Government doesn’t direct PURC. Government gives input to PURC. That is why it [PURC] is independent, and I have continued to warn that they are treating PURC as an agency or department under the Ministry of Energy,” he said on Eyewitness News.

Before this assertion, Mr. Mutawakilu had claimed that proposals had not been made to the PURC to reduce electricity tariffs, as captured in the 2018 budget.

But responding to the claims, the Energy Minister, Boakye Agyarko, said there were documents available to prove the proposal for reduction was sent as far back as November 2017.

Mutawakilu’s claims baseless

Also speaking on Eyewitness News, the Spokesperson for the Energy Ministry, Nana Damoah, said the Minority MP was only trying to smear the President.

“The President is not saying that he as President has unilaterally taken a decision to review prices, so I wonder what Mr. Adams Mutawakilu is talking about. There is absolutely no basis whatsoever for him to be attempting to make the claims he is making.”

According to Mr. Damoah, the President would not have made the announcement without “knowing the state of all of these processes and procedures.

He also reminded that it was clear in the budget statement that these were proposals and according to him, the PURC acknowledged receipt of proposals and “kicked into gear its own processes.”

“The president has done nothing but reinstate that point that was made in the budget of 2018 that was read in November 2017,” Mr. Damoah said.

The government announced that it had recommended the review of electricity tariffs in the country to the PURC.

It said it is hoping for an average reduction of 13 percent in electricity tariffs for residential consumers, whilst it is targeting a 21 percent drop for industrial consumers.

Reducing electricity tariffs was a major promise of the New Patriotic Party (NPP) ahead of the 2016 elections.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Mutawakilu slams Nana Addo over tariff reduction announcement appeared first on Citi 97.3 FM - Relevant Radio. Always.

These proposals were meant to seek a revision of the tariff setting methodology and cost structure for power production.

[contextly_sidebar id=”ELH0OYfLj6K0EITmGb8rEqvhUWs1LZrO”]Responding to the claims at a meeting of Ghanaian CEOs, the Energy Minister, Boakye Agyarko, said there were documents available to prove the proposal for reduction was sent as far back as November 2017.

Mr. Agyarko also chided Mr. Mutawakilu for making assumptions on the matter, and said the MP could have simply pushed for him to be summoned to Parliament to provide clarity.

“The Ministry sent a proposal to the PURC on the 17th of November, and he is welcome to see copies of these matters. Indeed, it is within his power as the ranking member to summon me to the Mines and Energy Committee [of Parliament] for such a verification.”

“…We have submitted our proposal and I can say that without the fear of contradiction, because I know that is what the truth is. The PURC responded to the proposals we have sent, and he is welcome to see copies of these because he is an officer of Parliament and an officer of State,” the Minister said.

The government announced that it had recommended the review of electricity tariffs in the country to the PURC.

Government said it is hoping for an average reduction of 13 percent in electricity tariffs for residential consumers, whilst it is targeting a 21 percent drop for industrial consumers.

Reducing electricity tariffs was a major promise from the New Patriotic Party (NPP) ahead of the 2016 elections.

Skepticism from NDC

Members of the Minority in Parliament were not shy in expressing their skepticism of the government’s pledge to reduce electricity tariffs in the budget.

Mr. Mutawakilu previously noted that, the expectation of gas coming on stream to power thermal plants as a means of driving down electricity cost for the ordinary Ghanaian would not materialize.

The Minority Leader in Parliament, Haruna Iddrisu, also said the proposed average reduction of 13 percent in electricity tariffs for residential consumers will ultimately be insignificant when approved.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post We didn’t lie about ‘reducing’ electricity tariffs – Agyarko appeared first on Citi 97.3 FM - Relevant Radio. Always.

This follows government’s decision to terminate 11 Power Purchase Agreements (PPA), with the justification that it would save the country some $7.2 billion dollars over a 13 year period.

Redundant plants

[contextly_sidebar id=”rnEbGunFZemNKndxeH5VPyBoSsbeVj7G”]Energy Minister, Boakye Agyarko, who has described some of the agreements as knee-jerk reactions to the dumsor crisis, explained that the agreements would be providing excess power.

He said the review of the agreements revealed that, “the projected capacity additions from the PPAs were far in excess of the required additions inclusive of the 20 percent system reserve margin from 2018 to 2030, and would result in the payment of capacity charges for undispatched plants.”

With all the power projects signed by Ghana, the total capacity is estimated to be 10,800 megawatts, even though the country needs 5,000 megawatts.

But Adams Mutawakilu, the Minority’s Spokesperson on Mines and Energy, believes the government could have leveraged facilities such as the West African Power Pool to export excess power from the country in a move that would increase foreign exchange earnings as envisaged by the Former President.

Under the ECOWAS Energy Strategy, the first phase of the West Africa Power Pool APL3, aims to curb imbalances between domestic energy resources and the needs of member states with specific emphasis on Burkina Faso.

Adams Mutawakilu suggested to Citi News that the Akufo-Addo government is not being ambitious enough when it comes to power.

“They have narrowed it to the national demand, per the minster’s [Boakye Agyarko] response. He never included government’s vision to make Ghana an energy exporter or a power exporter, and I think that we need to look at it broadly than just limiting it to Ghana’s needs.”

“Currently, we consume at peak 2225 MW, but currently we have 4500 MW… if we don’t take time, the vision President Mahama had for this country of being a net exporter of power might not be achieved,” Mr. Mutawakilu added.

As part of efforts to integrate national power systems in West Africa, Ghana in 2012 procured a $25.9 million loan facility from the International Development Association (IDA), under the West Africa Power Pool APL3.

The facility is to enable the construction of a 225-kilovolt-transmission line interconnection, and associated sub-station in Ghana and Burkina Faso, as part of the first phase of the World Bank backed Inter-Zonal Transmission Hub Project of the APL3 programme.

Disclosure on terminated PPAs

However on the matter of exporting power, a former deputy Minister of Power, John Jinapor, believes that it would not make sense for Ghana to have excess power with the view to exporting at all times, since the countries with insufficient power, are equally working on improving their situation.

He said when this happens over time, these countries will  no longer need to buy Ghana’s excess power, which means the country would have lost and wasted investments in its generation capacity.

Mr. John Jinapor has however called for more details on the cancellation of the PPAs.

The terminations are to come at a cost of $402 million, but Mr. Jinapor believes some of the payments may not be warranted.

According to Mr. Jinapor, some of the companies in deals with Ghana have breached agreements and are not deserving of any form of compensation.

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By: Duke Mensah Opoku & Delali Adogla-Bessa/citifmonline.com/Ghana

The post NPP ‘stopping’ Ghana from exporting electricity – Mutawakilu appeared first on Citi 97.3 FM - Relevant Radio. Always.