Ghana: Constructive Planning Needed To Prevent Costly Excess Power Supply — Energy Minister

Ghana’s Minister for Energy, John Peter Amewu, has called for constructive energy planning practices in the medium to long term, to ensure that Ghanaians are not burdened with the cost of excess energy supply.

According to him, the current high cost of energy for Ghanaian households and businesses is as a result of the excess energy capacity in the system which Ghanaians have to pay for whether the power is used or not.

His comments come at a time the government is engaging with Independent Power Producers (IPP) and Gas Suppliers (GS) to reassess all take or pay contracts and as well as resolve other energy-related issues.

Ghana currently has an installed power generation capacity of 5,083 MW, a dependable capacity of 4, 593 MW, and a peak demand of around 2,700 MW.

In effect, Ghana’s installed capacity is almost double its peak demand. Moreover, with current tariffs not at full cost recovery for power and gas, the 2019 sector shortfall is expected to grow to approximately USD$1.3 billion, and without urgent Government action, the sector shortfall will continue to increase and accumulate to more than USD$12.5 billion (more than 25% of 2017 GDP) by 2023.

Delivering the keynote address at the 2019 edition of the Ghana Energy Awards, John Peter Amewu said all steps must be taken to protect Ghanaians from any unnecessary costs in the energy sector.

“As a country, we should begin to decide whether we want to wait for demand to meet supply or to create supply in excess for demand to grow and meet. Any country that refuses to undertake constructive energy planning practices, will always create excess supply where the cost of socialization will be borne by Ghanaians.”

He went on to mention that his Ministry was committed to putting in place systems to ensure that going forward excess energy capacity is only added at a sustainable rate.

“While there are steps being taken to make sure that going forward as a country we would be mindful of our generation, transmission, distribution, supply, and metering analysis, we at the Ministry have begun to put in measures and policies that will make sure that we bring in generation at the time that demand begins to grow.”