{"id":100205,"date":"2015-03-17T14:26:33","date_gmt":"2015-03-17T14:26:33","guid":{"rendered":"http:\/\/4cd.e16.myftpupload.com\/?p=100205"},"modified":"2015-03-17T14:26:33","modified_gmt":"2015-03-17T14:26:33","slug":"analysis-why-govts-reasons-for-dumsor-are-not-tenable-ggdp","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/2015\/03\/analysis-why-govts-reasons-for-dumsor-are-not-tenable-ggdp\/","title":{"rendered":"Analysis: Why govt\u2019s reasons for dumsor are not tenable &#8211; GGDP"},"content":{"rendered":"<p>The impression being created by the Government is that the major challenge with Ghana\u2019s erratic power supply evidenced by the persistent \u2018dumsor-dumdum\u2019 is the lack of generation capacity, and so signing additional power purchase contracts with independent power producers (IPPs) will automatically resolve this challenge. We are instead of the opinion that the current round of power outages has nothing to do with the lack of generation capacity, but more to do with fuel availability \u2013 light cycle crude oil and natural gas to power the thermal plants &#8211; and other causal factors.<strong>\u00a0<\/strong><\/p>\n<p><strong>Installed Supply Capacity<\/strong><\/p>\n<p>According to the Energy Commission, installed generation capacity available for grid supply as at the end of 2013 was about\u00a02,936 Megawatt (MW).<\/p>\n<p>Hydroelectric generation at Akosombo, Bui and Kpong constituted 53.8% of this amount whereas thermal generation at the dual fuel natural gas, light cycle oil and diesel plants located in Tema and Takoradi (Aboadzi) provided 45.9% of installed capacity. Renewables constituted only 0.1% whereas LPG generation from Genser power provided the remaining 0.2% of installed capacity.<\/p>\n<p><strong>Historic Demand Condition<\/strong><\/p>\n<p>Demand has been estimated\u00a0to increase 10-15% year-on-year in the past three decades.\u00a0Thus, new generation capacity must increase by at least the same percentage per year in order to support expanding industrial, institutional, commercial, household and other needs as the country grows and develops.<\/p>\n<p><strong>Current Supply And Demand Condition<\/strong><\/p>\n<p>However, only about\u00a01,500 MW<strong> or 51% <\/strong>of the 2,936 MW\u00a0installed capacity has been available in recent times due to a myriad of factors, the primary one being the unavailability of gas to power the thermal plants and government\u2019s inability due to fiscal constraints to purchase light cycle crude oil as an alternative. This is compounded by the declining rainfall patterns which affect the hydro plants. The Bui hydro plant, for example, has predominantly seldom run at more than 40% of its installed 400MW capacity since it was commissioned with great fanfare in December 2013 due to the water level being low. Thus, the dry season we are in currently has to end before rainfall can increase the water level to allow for a higher level of generation.<\/p>\n<p>Peak power demand in Ghana currently stands at about 2,000 MW. For 2014, Ghana\u2019s peak load ranged between 1,900-2,200 MW (ex the 10-20% reserve margin needed for system redundancy).<\/p>\n<p>Gross electricity supplied in 2013 was about 12,871 GWh (an average of 1,469 MW per day) against a forecast of 16,113 GWh (1,839 MW per day) for the year. Of the actual quantity supplied, hydro comprised only\u00a0936 MW (32% of the total installed capacity or 59% of hydro capacity)\u00a0whereas thermal sources constituted\u00a0527 MW (18% of the total installed capacity or 39% of total thermal capacity). This condition created a\u00a020% supply deficit\u00a0in relation to forecasted demand, thus necessitating the load-shedding (a.k.a \u2018dumsor\u2019) that has been carried since 2013.<\/p>\n<p>The 2010 Wholesale Power Reliability Assessment report estimated that Ghana\u00a0loses between 2-6% of GDP annually\u00a0due to insufficient wholesale power supply, which excludes a number of indirect costs of lost economic output.<\/p>\n<p><strong>Current Supply Deficit<\/strong><\/p>\n<p>What are the causes of this supply deficit?<\/p>\n<p>The main factors responsible for the current supply condition stated above are: (a) the very poor credit risk of ECG (currently the sole offtaker on the market); (b) gas supply challenges from the West African gas pipeline as Nigeria, our major supplier, prioritizes her domestic industrialization agenda over regional integration needs; (c) poor infrastructure planning, maintenance and lack of system redundancy resulting in many thermal plants going offline on or about similar times; and (d) distorted tariff regime pushing IPPs to ask for sovereign guarantees in power purchase agreements (PPAs) before commencing operations.<\/p>\n<p>The low level of supply from Bui currently, which is a leading reason why the \u2018dumsor\u2019 has worsened since December 2014.<\/p>\n<p>&nbsp;<\/p>\n<p>By: The Ghana Growth and Development Platform<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The impression being created by the Government is that the major challenge with Ghana\u2019s erratic power supply evidenced by the persistent \u2018dumsor-dumdum\u2019 is the lack of generation capacity, and so signing additional power purchase contracts with independent power producers (IPPs) will automatically resolve this challenge. We are instead of the opinion that the current round [&hellip;]<\/p>\n","protected":false},"author":25,"featured_media":100207,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[8],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Analysis: Why govt\u2019s reasons for dumsor are not tenable - GGDP - Citi 97.3 FM - Relevant Radio. 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