Dumso – the erratic electric power system of Ghana

by Kwabena Opong

The Electricity Company of Ghana (ECG) has decided to extend its load-shedding exercise to industrial companies, including Coca-Cola Company and Unilever NV, both significant employees in the country, according to a Bloomberg report early December. This is further to the worsening energy situation the country is experiencing. According to the Volta River Authority (VRA), the main supplier of energy to ECG, the water level of the river has reduced to levels making it unable to produce enough energy. Currently only four out of the six turbines are in operation. Bui dam according to unnamed sources, is virtually inoperative because water levels are too low and the alternative thermal sources are not adequately resourced to produce enough energy for the nation.
Electricity production, transmission and distribution in Ghana are vested in three main entities: the VRA combines hydro, thermal and solar plants to generate electricity for supply; Ghana Grid Company Limited (GridCo), wholly owned by the government is an independent transmission system operator. GridCo is responsible for the operation and maintenance (O&M) of all transmission lines throughout Ghana; and the Electricity Company of Ghana (ECG), a limited liability company, wholly owned by the Government of Ghana and operating under the Ministry of Energy provides energy in the southern sector of the nation. NEDCo is a subsidiary of VRA responsible for the distribution of electricity in the northern part of Ghana. It serves the Northern, Upper West, Upper East and the Brong-Ahafo regions.
The prevailing situation in Ghana is a load-shedding exercise that is now extended to industry, and the obvious repercussions are the economic impact that is hampering development in the country. Reaction to the energy situation called dumso in local parlance is highly politicized and likely to determine the political future of the ruling NDC government. The opposition argues that in its time in government the NPP administration was able to sustain production by taking a proactive action to deal with the issue. The NPP opposition also breaks down the argument simply as the ruling government’s insensitivity to the situation. The party argues that the main problem is fuel to juice up generating facilities that are crude oil and gas which the government is incrementally withholding from them. An unnamed source from the VRA confirmed the opposition’s argument adding that the Mills administration could not sustain the trend set by the Kufuor administration because according to the government, funds for fuel were not enough.
Civil society bodies like the African Center for Energy Policy (ACEP) sees the problem in energy production from the following perspectives: Continuous reduction in the spinning reserves; over reliance on hydro and gas; transmission investment challenges; adequate regulatory framework in terms of pricing; and transmission and distribution losses.
ACEP seems to accept the opposition’s argument that lack of continuous fuelling has caused continuous reduction in the reserves that were available during and immediately after the end of the Kufuor administration. According to ACEP even reserve afforded by the seizure of VALCO operations has been wiped out obviously owing to lack of continuous supply of fuel in addition to the shortfall in the water level of the Volta Lake.
Further to the aforementioned is uncertainty in rainfall since 2012, and of course, the absence of continuous supply of gas and crude oil sourced from Nigeria. It seems too that Nigeria’s decision to increase its legendary electricity production has increased its gas supply and cannot meet the demand from Ghana at the same time. Operational inefficiency and lack of any regulatory regime to keep the lights on have also hampered the continuous provision of electricity.
Regarding transmission and investment challenges, low tariffs and lack of prompt payment of bills by consumers, including government, have retarded investment in energy. Tariffs are therefore highly subsidized by the government. Distribution losses are now higher than the benchmark of 18 percent issued by the Public Utility Regulatory Commission (PURC), the regulatory body. Issues of technical nature also remain unsolved for reasons spelt out above.
VRA provides on its website that the total capacity for power generation among the 12 facilities is 2,830 but their production capacity is below 35 percent. Bloomberg also reports that peak demand for power is about 2,000 but the gap between demand and supply has widened to as much as 600 megawatts earlier this year. The ECG therefore “is reducing supply to factories by 120 megawatts and by 300 megawatts to homes,” Bloomberg reports quoting Stephen Doku, director of power at the Ministry of Energy.
Facts on the ground and information emanating from ECG do not deny the incidence of lack of funding for fuel for the generating facilities. Between 2012 and now government borrowing has ballooned from nine billion US dollars to 23 billion dollars. It is obvious that not much of those moneys has been channeled to energy production and Ghanaians are questioning the rationale for the government’s disregard for energy as the driver for development and a buoyant economy. Apart from a half a billion dollars grant from the Millennium Corporation of the United States, there has not been any major move by government to address the situation. The government claims it is ordering more thermal generators from Europe to add to what is already available, but critics are wondering why it is not working to help improve the existing facilities.
Presently, several parts of the country are facing acute shortages of power. Some suburbs in the capital face as much as a week without power. ECG on the other hand claims that it has instituted a schedule that is going to run from January 1. Electricity would be available to residential areas for 24 hours, followed by 12 hours of cuts.
Ghana is an oil-producing country and also the second largest producer of gold in Africa. The country has no business finding itself in the mess it is in now. Only a few of the generating facilities fuel their plants with crude oil, while the rest are driven by gas. The West African Pipeline has so far failed to provide enough gas but efforts are being made to buy from other sources. The intriguing issue is the reason why the oil produced in the country cannot be utilized to power the dam and the few other generating plants.
Energy has now taken the center stage in the politics of the West African nation of 26 million. The NPP administration was able to handle the situation in its time. President J. A. Kufuor explains that he personally contacted then President Obasanjo of Nigeria in 2001 on a note of urgency and was able to ensure constant supply of fuel for the energy sector. Recent developments in the country and the likely fallouts demand a similar personal approach. The country’s economic takeoff is stunted by the energy shortfall. Ghana is in an energy crisis, if the government would admit.

1. From A statement by ACEP on “The Main Challenges Facing The Power Sector In Ghana.”
2. http://vraghana.com/about_us/profile.php

Kwabena Opong is the editor in chief of Amandla and Director of the African Bereau of the Center for Peace & Media Initiatives (CMPI)

Posted by on Dec 16 2014. Filed under African News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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