Energy Commission Gives Advice on 2023 Power Outages

In December 2023, the Energy Commission issued an important advisory addressing the irregular power outages that occurred throughout the year.

The Commission emphasized the urgent need for the government to invest in maintaining a reliable gas supply, which is critical for the country’s power generation.

Over the last month, many areas in Ghana have experienced sporadic power outages, causing concern among citizens and businesses.

The Electricity Company of Ghana (ECG) has faced calls to release a blackout schedule so people can better plan for these disruptions. Businesses, in particular, are worried about the power situation, especially after years of stability in the energy sector.

A review of the Energy Commission’s 2024 Energy Outlook report, released in December 2023, reveals that the Commission had already raised the alarm about this issue.

According to the report, the “security and adequacy of fuel supply to thermal plants remain the single most important risk to power supply reliability in the country.” The Energy Commission advised the government to invest in improving gas supply reliability, especially as Ghana’s power generation relies increasingly on natural gas.

The Commission also recommended that the government speed up the construction of a gas pipeline to connect the power enclaves of Tema and Takoradi.

Additionally, it proposed the creation of a new power generation enclave in Kumasi. To address short-term gas supply shortages, the Energy Commission suggested increasing hydroelectric power generation beyond its current limits.

Recent power cuts have mainly been linked to financial constraints in fuel procurement. The Cash Waterfall Mechanism (CWM), designed to ensure liquidity in the energy value chain, has not been able to meet the required financial flows.

According to Dr. Mohammed Amin Adam, Ghana’s Finance Minister, the energy sector faces a financing gap of around $1.9 billion. Despite this, he assured investors that efforts are being made to make the sector profitable.

The Public Utilities Regulatory Commission (PURC) reported that the ECG currently collects about GHS850 million each month, falling short of the required GHS1.9 billion to ensure smooth operations. This shortfall has further complicated efforts to maintain reliable power supply.

The Energy Commission’s report forecasts that grid-connected power generation capacity in 2024 will reach 5,194 MW, with a total dependable capacity of 4,756 MW.

However, because of scheduled maintenance and fuel supply challenges, only about 4,400 MW of dependable capacity is expected to be available.

This is projected to meet the peak demand of 3,788 MW, but it will leave a reserve margin of 16%, which is below the recommended 18% safety margin.

The report also highlighted that natural gas, both domestic and imported, will continue to be the primary fuel for thermal power plants. The total consumption of natural gas for the year is expected to reach 137.5 TBtu (trillion British thermal units).

In response to the recent power outages, Mr. Herbert Krapa, Board Chairman of the ECG, announced that the government is taking immediate actions to restore stable power supply.

He shared this update following the commissioning of the Volta River Authority’s (VRA) 15MW solar plant in Kaleo, reassuring the public that “we’re fixing it, and we’re nearly there.”

To further address the issues, the government is purchasing one million revenue-efficient meters through the World Bank’s Programme-for-Results (PforR) initiative. This move aims to improve revenue collection.

Additionally, all 61 of ECG’s revenue collection accounts are being merged into a single fund to increase transparency and ensure smoother distribution of revenue across the energy value chain.

These measures are in line with the recommendations made by the Energy Commission, which remains a critical body in guiding Ghana’s energy policies and ensuring the country’s power needs are met sustainably.

As the energy landscape continues to evolve, the Commission’s role will be even more important in maintaining a stable and reliable power supply for the nation.