Unreliable power supply in Ghana has been a major issue for some time now.
The power sector has gone through various phases with various governments during their tenure adding on to the power grid to meet the growing energy demand.
In January 2016, Ghana’s total system installed capacity reached about 3,215MW with effective capacity around 2,995 MW.
Ghana however for close to three years experienced severe power crisis.
The development resulted in a massive slowdown in economic output leading to the close of small businesses and the downsizing of many medium and large scale private companies.
Part of measures rolled out by Ghana to deal with the power crisis was the bringing in of an emergency power ship from Turkey.
The Karpower ship was estimated to have added 250MW of power to the national grid.
In addition, a new power plant, the Ameri Power plant was brought in, the plant increased the installed capacity of the country to 3,215MW by January 2016.
The addition of these power plants eased the power crisis and retired a load shedding exercise that was ongoing during that period.
Apart from drops in the water level in the Akosombo Dam, the situation was also worsened by technical challenges.
At a point the GRIDCo off-peak load-relief request affected 210MW of power to the Greater Accra Region; 120MW to Ashanti; 120MW to Tema; 60MW to Western; 40MW each to Central and Eastern, and 20MW to the Volta Region.
The power crisis became so severe that it was christened “Dumsor” which means “Off-On”.
In 2015, a study conducted by the Institute of Statistical, Social and Economic Research (ISSER) revealed that businesses lost about $686.4 million annually due to the incessant supply of electricity at that time.
According to ISSER, the crisis lowered the annual sales of Small and Micro businesses by about 37% to 48%.
These figures were arrived at following the Opportunity Cost per Kilowatt analysis by ISSER’s economic division.
According to the opportunity cost per kilowatt analysis by ISSER’s Economic Division, the figure translates to about 2% of national output lost due to the energy crisis.
The report was carried out on over 1, 250 SMEs across all 10 regions of Ghana and it revealed that the crisis lowered the annual sales of companies by about 37% to 48%.
The report further pointed out that only 20% of all MSEs had backup generating sets to support their businesses anytime the power went off.
During the crisis, the VRA relied on the Ghana Gas Company and N-Gas in Nigeria to power its thermal plants in Takoradi, and Tema respectively.
However, the supply of gas was inconsistent due to intermittent technical challenges as well as inadequate funding to secure the product.
Evolution of the Power industry
The history of power production and mass distribution in Ghana started with the completion of the Akosombo Hydroelectric Dam.
Currently, the dam has an installed capacity of 1,020MW.
Since the Akosombo Dam was commissioned in 1965, it has experienced severe drops in the water level, forcing the managers of the plant, the Volta River Authority (VRA) to shut down some of the plants.
The first was in 1983 to 1985, followed by 1998 to 2000 and then in 2006 to 2007. In 2013 Ghana’s worst power crisis by far commenced and dragged on to late December, 2015.
Currently, Ghana’s energy mix include hydro and thermal, with the latter driving power production as the rain patterns become unreliable, leading to drops in the water level of the Akosombo dam.
The government of Ghana as part of measures targeted at reducing Ghana’s reliance on hydro power established the Takoradi Power Company (TAPCO 1), Takoradi International Company , Takoradi Thermal 1Power, and Tema Thermal 2 Power Plant generating 330,220, 132, 110 and 50MW respectively.
Ghana’s second largest hydro dam, the Bui Hydroelectric Dam was commissioned in 2013 with installed capacity of 400MW.
In addition, private power producers have joined government on an agreement basis to produce some amount of electricity for the nation.
Some independent power producers in Ghana include the Sunon Asogli Power Plant, CenPower and Cenit Power.
Power Related Companies
There are three main state-owned power companies in the production, transmission, and distribution of power in Ghana.
These companies are the VRA, the Ghana Grid Company(GRIDco) and the Electricity Company of Ghana(ECG).
Volta River Authority (VRA)
VRA is the major power generation company, solely owned by the Government of Ghana and established in 1961 by an Act of Parliament.
VRA combines hydro, thermal and solar plants to generate electricity for supply to the local and export markets.
The local market consists of the Electricity Company of Ghana (61% of market consumption), the mines, and industrial establishments (who purchase electricity directly from VRA) with the export market comprising Communauté Electrique du Benin (CEB) (for the Republics of Togo and Benin) and SONABEL (Burkina Faso).
VRA reaches its customers and neighboring countries through GRIDCo’s transmission system.
This transmission system covers the entire country and is connected with the national electricity grids of Compagnie Ivoirienne d’Electricité (CIE) of La Cote d’lvoire, (CEB) of Togo and Benin and SONABEL of Burkina Faso.
These interconnections now serve as part of the arrangement under the West Africa Power Pool (WAPP).
Northern Electricity Distribution Company (NEDCo), a subsidiary of VRA, undertakes the distribution function in northern Ghana covering the Upper East, the Upper West, Northern and Brong Ahafo regions, as well as parts of the Ashanti and Volta Regions.
NEDCo was developed as an integral part of a larger scheme, designated the Northern Electrification & System Reinforcement Project (NESRP) to extend the national electricity grid to northern Ghana.
Historically, the Electricity Supply Industry (ESI) in Ghana has been dominated by hydro power, which accounted for all generation until the late 1990s.
That situation has now changed and since the end of 2010, Ghana’s total installed thermal generating capacity has almost equaled the existing hydro generation capacity.
VRA, hydroelectric power generation plants, the Akosombo Hydroelectric Power Plant and Kpong Hydroelectric Power Plant are situated in the Eastern region.
The thermal plants are situated mainly in Tema and Takoradi.
In addition to those owned by VRA, independent Power Producers (IPPs) support the electricity supply market.
Thermal generation plants gained consistent prominence in VRA’s power generation mix, since the mid 1990’s when VRA commenced the diversification of its generation source beyond the Akosombo Hydro-electric plant.
Crude oil and gas used in powering VRA’s thermal plants are imported through various suppliers.
There are currently nine (9) main operating generation facilities in Ghana, as detailed below, with a total installed generation capacity of 2,846.5MW, of which VRA contributes 75%.
The Northern Electricity Distribution Company (NEDCo)
The Northern Electricity Distribution Company (NEDCo) since its establishment has been responsible for the supply of electricity to the Northern Sector of the country.
The Northern Electricity Distribution Company (NEDCo) of the Volta River Authority (VRA) is responsible for the supply of power to the Northern parts of Ghana.
NEDCo operates at 34.5kV, 11kV and 400V voltage levels.
It has over 350,000 customers.
GRIDCo was established in accordance with the Energy Commission Act, 1997 (Act 541) and the Volta River Development (Amendment) Act, 2005 Act 692.
It provides for the establishment and exclusive operation of the National Interconnected Transmission System by an independent Utility and the separation of the transmission functions of the Volta River Authority (VRA) from its other activities within the framework of the Power Sector Reforms.
GRIDCo was incorporated on December 15, 2006 as a private limited liability company under the Companies Code, 1963, Act 179 and granted a certificate to commence business on December 18, 2006.
The company became operational on August 1, 2008 following the transfer of the core staff and power transmission assets from VRA to GRIDCo.
GRIDCo’s main functions are to undertake economic dispatch and transmission of electricity from wholesale suppliers (generating companies) to bulk customers, which include the Electricity Company of Ghana (ECG), Northern Electricity Department (NED) and the Mines.
It also provides fair and non-discriminatory transmission services to all power market participants, acquires, owns and manages assets, facilities and systems required to transmit electrical energy.
GRIDco provides metering and billing services to bulk customers, carry’s out transmission system planning and implement necessary investments to provide the capacity to reliably transmit electric energy; and manage the wholesale power market.
The establishment of GRIDCo is intended to develop and promote competition in Ghana’s wholesale power market by providing transparent, non-discriminatory and open access to the transmission grid for all the participants in the power market particularly, power generators and bulk consumers and thus bring about efficiency in power delivery.
Electricity Company of Ghana (ECG)
The Electricity Company of Ghana is a limited liability company wholly owned by the Government of Ghana and operating under the Ministry of Power (MoP).
The company was incorporated under the Companies Code, 1963 in February 1997.
It began as the Electricity Department on 1st April 1947 and later became the Electricity Division in 1962.
It was subsequently converted into the Electricity Corporation of Ghana by NLC Decree 125 in 1967.
Until July 1987, the responsibility for distributing and supplying power in the country rested on ECG.
Government created the Northern Electricity Department (NED) as a subsidiary of Volta River Authority (VRA) in 1987 which took over from ECG, the responsibility for running and development of electric power systems in Brong Ahafo, Northern, Upper East and Upper West Regions.
The Company is responsible for the distribution of electricity in the southern part of Ghana namely, Ashanti, Central, Eastern, Greater Accra, Volta and Western Regions.
Power Generation in Ghana
Currently, Ghana’s energy mix includes hydro power, thermal and solar.
Investors have shown interest in wind power as well, with feasibility studies ongoing.
There are also a number of independent power producers constructing power plants to add to the national grid .
Figures published by the Energy Commission of Ghana, indicate that thermal generation of electricity has increased substantially, compared to hydro.
Prior to this, Ghana’s energy mix was dominated by hydropower.
In the year 2000, hydropower contributed over 60% of the energy mix.
Currently, it is below 40% and experts are attributing the development to low water levels in Ghana’s foremost hydro power dam, the Akosombo due to poor rainfall pattern.
Electricity consumption in Ghana has increased over the years as industries and commercial ventures grow.
Electricity consumption has grown from millions of kilowatts to billions.
Supply, however, has not matched demand for electricity.
ECG’s technical losses are mainly attributed to inadequate equipment capacity and old and obsolete cables.
Commercial losses have been identified to illegal connections, metering problems, billing and collection challenges.
A careful analysis of Ghana’s energy mix shows that as electricity generation per available capacity drops for hydro, thermal power generation was on the ascendency.
This is a deliberate policy by government to gradually reduce the nation’s reliance on hydro as the water level in the Akosombo Dam drops.
As part of efforts directed at enhancing the energy needs of Ghana, government has been advised to effectively expand the capacity to at least 3,500MW to meet demand and reserve requirements for the next 3 years.
Also, it is important for government to further sort out the tariff system to give incentives for the IPPs to produce and compete at a wholesale level.
There have been calls to focus attention on expanding the distribution infrastructure with a fully cost action plan with private sector participation under a Private Public Partnership (PPP) scheme while rigorous regulatory enforcement is encouraged to ensure that consumers are protected from arbitrary price mark ups and inefficiencies from the utilities being passed onto them.
A report published in 2015 by the Energy Commission stated that to eliminate load-shedding in the future, Ghana would require a minimum generation of 16,398-17,350 GWh which translates into additional capacity requirement of 450-550 MW annually.
This is expected to allow for a minimum of 10-15% of spinning reserve that would bring the total capacity shortfall to 800-1,000 MW translating into an overall national installed capacity requirement of 4000-4,200 MW in the short term.
The high-side could arise if VALCO operates more than two pot lines.
In the light of the foreseen electricity supply shortfall, Government was urged to be proactive in going for international thermal power contracts.
The report, however, pointed out that there may be challenges in securing adequate gas which is a less expensive fuel for the thermal plants.
One issue that energy experts have cautioned Ghana on is a deliberate move to improve gas supply to make power supply cheaper.
The Energy Commission report further urges Ghana to target gas supply from the WAGP to be above 60 mmscfd.
It estimated that the gas flow required for fuelling the thermal plants would range between 77,103 mmscf (77 Tcf) or 211-350 mmscfd, in the near future.
Below is Ghana power demand forecast, 2000-2025