By on April 6, 2015
Ghanaians have been experiencing erratic power-supply for the last three years. The problem first reared its ugly head in 2009 when the water levels of the Akosombo dam dropped. Ghanaians have nicknamed the crisis ‘dumsor’: to depict the erratic supply of power, as the Twi word ‘dumsor’ literally means off/on.
A country’s energy mix refers to its sources of energy either renewable or nonrenewable. In Ghana, we derive energy from both renewable sources and nonrenewable ones. The only renewable source of energy in Ghana is the Navrongo Solar Power Plant (a 2 megawatt facility). The nonrenewable sources of power are classified into Hydro and thermal sources. Hydro power is derived from the Akosombo, Bui and Kpong dams. While thermal power is derived from the Tema and Atuabo thermal plants.
The government of Ghana has created the impression that dumsor is caused by a lack of generation capacity. Nevertheless, according to a research done by Ghana Growth and Development Platform, that is not the major cause of the erratic power supply. Ghana Energy Commission stated that installed generation capacity available for grid supply by the end of 2013 was 2936 megawatt (MW). This refers to the maximum electric output a generator can produce under specific conditions. However, only about 1500 MW or 51% of the 2,936 MW installed capacity has been available in recent times. Clearly, there has been a supply deficit. Causes of this supply deficit will be stated and explained as follows:
Poor Infrastructure planning, maintenance and lack of system Redundancy:This has resulted in many thermal plants going off almost concurrently. The load-shedding situation has been worsened by some maintenance and retrofit works on some of the thermal plants. This is due to a poor infrastructure planning which would have prevented maintenance at critical moments.
Poor credit risk of ECG:ECG is currently the sole off-taker (buyer) of power on the market but its poor credit risk has forced Independent Power Producers (IPPs) to demand sovereign guarantees in power purchase agreements before commencing operations. Thus, many potential IPPs do not consider ECG as a credible, bankable off-taker because it has ran at a loss most years in the last three decades.
Gas and fuel supply challenge:88% of gas demand in Ghana is from the power sector. This glaring fact reveals how dependent the power sector of the economy is on gas. Ever since the West African Gas pipeline was commissioned in 2008, Ghana has struggled to get her contractually mandated quantity of 123 mmscfd from Nigeria to the Aboadze Thermal Power Plant. This has prevented the thermal plants from being efficiently run.
Distorted Tariff Regime:The Public Utilities and Regulatory Commission (PURC) sets tariffs (determine electricity prices). In 2011 the PURC introduced a quarterly automatic tariff adjustment formula which incorporates fluctuations in crude/gas prices, foreign exchange rates, the hydrothermal generation mix and changes in the consumer price index. But the formula has not been allowed to adjust automatically due to government interference in the market price setting mechanism to ensure some subsidization of prices.
Low Water level:The low level of water has made it difficult for the Bui dam to produce at a high level, and this low level of supply from the Bui dam has been one of the reasons Dumsor has aggravated since December 2014. Below average rainfall over the past three years has reduced the water level in the Volta Lake, which in turn has reduced the water level in the Volta reservoir that feed the Akosombo hydro station.