Comparative Analysis Of Take-Or-Pay And Take-And-Pay Pricing Options In Power Purchase Agreements In The Context Of Energy Security In Deregulated Electricity Market
Power Purchase Agreements (PPAs) are essential instruments in the deregulated electricity market, influencing energy supply decisions based on established demand for power, power generation technology desired, pricing dynamics and the Buyer’s economic ability to purchase power, the location of the power plant, shaping the dynamics of energy transactions and influencing overall energy security.
Traditionally, Take-or-Pay (ToP) and Take-and-Pay (TnP) transaction pricing options are the two dominant pricing structures used in PPAs, each with unique characteristics that can impact energy security considerations. These two pricing structures are not new. We apply and use it daily in our endeavors.
Given the nature of the power market and power projects, there are often credit and liquidity concerns on both sides of the PPA, resulting in various requirements for credit support for the buyers’ (off-taker) obligations and credit support for the Sellers’ (project company) obligations.
This paper provides analysis of the ToP and TnP pricing or structures in PPAs about energy security within the context of a deregulated electricity market. The analogy provided below to demonstrate the simplicity of the two terminologies should help the clear any one’s doubt.
‘Take-or-Pay (ToP) Power Purchase Agreement’.
Take or Pay is when you demand a ‘kenkey’ woman to supply 100 balls of ‘kenkey’ for 100 people for your ‘kenkey’ party costing GHS500.00. Based on your demand, the ‘kenkey’ woman organized all the needed ingredients to deliver your order on the agreed delivery date and point. If, on the day of the party, only 40 people turned up for the party due to a heavy downpour, you are still duty-bound to pay the GHS500.00 to the ‘kenkey’ woman for the 100 balls of ‘kenkey’ she made available to enable her to recover her costs and not only the 40 ‘kenkey’ consumed.
Under the Take-or-Pay PPA, the Seller builds, operates, and maintains the power plant by the requirement of the PPA and applicable law, and deliver the agreed amount of power by the PPA. Failure to deliver the agreed amount of power to the Buyer gives the Buyer the right to demand compensation for your failure to deliver the contracted energy. Likewise, the Buyer is obligated to pay for the electricity, whether it is consumed or not. It requires the Buyer to either take the contracted volume of energy or pay for it, irrespective of whether the energy is consumed.
In this case, the risk of demand volatility is borne by the Buyer, as they must pay even if they do not need or consume (Idle or Unutilized Capacity Charge – compensation for failure to receive the contracted energy).
Characteristics of ‘ToP Power Purchase Agreement’.
Revenue Certainty:
ToP PPA offers high level revenue certainty to power producers for the contracted capacity, ensuring that they receive payment even if the buyer does not utilize or consume the entire agreed-upon volume of energy. Revenue certainty offers several benefits to the power producers, such as, cash flow predictability, market stability, long-term viability, investment confidence for new capacity, and promoting a reliable energy supply that enhances energy security.
Risk Mitigation:
ToP PPA reduces the risk of revenue shortfalls due to foreseen changes in energy consumption patterns or market volatility. This stability enhances the financial resilience of the power producer. Buyers are obligated to either take the contracted energy or pay for it, reducing the risk of excess capacity in the market. This can lead to a better resource planning and system stability;
Price Stability:
Fixed pricing in ToP PPA provides the Buyer with predictable costs, aiding budgeting and financial planning. This can contribute to energy security by avoiding sudden cost spikes. It shields and assures a fixed or predetermined price for the energy consumed by the buyer, regardless of electricity market price volatility. To the buyer, it benefits in budget predictability, price risk mitigation, and financial planning etc. To the Seller, it shields and provides revenue assurance to the power producer to honor obligations when due.
Lack of Flexibility:
ToP PPA may not provide the Buyer with the flexibility to adjust energy consumption based on demand fluctuations. Similarly, the Seller is limited not to sell to anyone in case the Buyer did not consume or utilize all the contracted energy, hence one of the justifications to demand payment for the unused power. This could potentially lead to inefficiencies in energy utilization; and
Stranded Costs:
These are the costs incurred by the seller if the buyer fails to receive the contracted energy as per the contract. These costs typically include investments made by the seller to build and maintain the power plant or infrastructure required to meet the contracted energy. If energy consumption is lower than contracted, seller will be left with an idle capacity or unused assets that cannot be readily absorbed, leading to financial loses or stranded costs.
‘Take-and-Pay (TnP) Power Purchase Agreements (PPAs)’.
Take and Pay (TnP) is when you walk to the ‘kenkey’ woman and offer to buy 100 balls of ‘kenkey’ out of the 1000 balls made available for sale to the public at a determined price, served and you walk away. You have no obligation to contribute to or compensate the ‘kenkey’ woman, if other potential buyers do not turn up on that day to make a purchase. She takes personal responsibility of what to do with it.
The above implies the Take-and-Pay PPA allows the Buyer to choose the volume of energy they wish to take or consume based on their demand. The obligation to pay is linked to the consumption of electricity, in the case of unsolicited generation capacity. Likewise, the Seller has the right to explore the Wholesale (WEM) or Regional Electricity Market (REM) for on-the-spot or day-ahead transactions in which pricing and assurance of settlement on time may be a preferred and better option to the detriment of the traditional off-taker or Buyer in supply guarantee. However, it holds that if it is a contracted or solicited generation capacity, the buyer is obligated to pay for the entire contracted or solicited capacity, regardless of how much energy they actually consumed. That is, a fixed MW charge (Capacity/Capital Recovery Charge) plus the actual energy consumed charge.
Characteristics of ‘Take-and-Pay (TnP) Power Purchase Agreements (PPAs)’
Flexibility:
TnP PPA offers buyers the flexibility to choose the volume of energy they wish to take, allowing them to align consumption with actual demand. This aspect of TnP can provide several benefits, such as, cost efficiency, grid stability, demand fluctuations, load management and resource optimization etc;
Market Responsiveness:
The Buyer can take advantage of spot market prices under TnP PPAs, potentially benefiting from lower prices during periods of lower demand. In contrast, buyers can choose to reduce consumption to manage costs. This occurs due to various factors, including changes in supply and demand, fuel prices, weather conditions, regulatory changes, and geopolitical events;
Supply Uncertainty:
Given the creation of the Wholesale (WEM) and Regional Electricity Markets (REM), the Seller will consider the option of spot market transactions that provide more trading opportunities and are thus more liquid and efficient. TnP PPA might expose the Buyer to supply shortages during peak demand periods, potentially impacting energy security. Insufficient available capacity could lead to service interruptions; and
Price Volatility:
TnP Pricing Structure does not lock in a fixed price for the energy, buyers are subject to the prevailing market prices at the time of consumption. It means, if electricity prices in the spot market are high, the buyer will pay a higher rate for the energy consumed. Conversely, if prices are low, the buyer also benefits from paying a lower tariff. This introduces the risk of pricing volatility due to exposures and offerings in the spot prices in the Wholesale (WEM) or Regional Electricity Markets (REM). Fluctuating prices can make budgeting and financial planning challenging for Buyers.
Balancing Trade-offs:
The choice between Take-or-Pay (ToP) and Take-and-Pay (TnP) Power Purchase Agreements involves a delicate balancing act between Electricity Market Price Dynamics, Generation Asset Characteristics, Demand Uncertainty, Policy and Regulatory Environment, Operational Flexibility, Financial Strength and Risk Appetite and Energy Security considerations. Ultimately, selecting the right PPA structure requires a comprehensive evaluation of the trade-offs and alignment with overall energy security objectives.
ToP PPA provides stability and revenue predictability for power producers, fostering investment in a reliable capacity. However, TnP PPA offers the Buyer flexibility and potential cost savings by aligning consumption with demand.
Source: Dr. Elikplim Kwabla Apetorgbor, Power Systems Economist & CEO of Independent Power Generators, Ghana.
South Africa, China Signs Power Deals During BRICS Summit
South Africa and China have signed deals covering emissions technology, electricity transmission and distribution and nuclear power on the sidelines of the BRICS summit.
The agreements are part of the South African government’s efforts to end record power cuts that are a major constraint on economic growth.
Electricity Minister, Kgosientsho Ramokgopa said one of the deals would see Chinese companies sharing technology to help South Africa’s struggling state utility, Eskom, cut emissions from its coal-fired power plants.
Other agreements would see Chinese firms helping Eskom upgrade its power transmission and distribution infrastructure and share expertise on nuclear power.
The summit of the BRICS group of emerging economies, comprising Brazil, Russia, India, China and South Africa opened on Tuesday and ends tomorrow, Thursday, in Johannesburg, South Africa’s biggest city and commercial capital.
BRICS members are seeking to use the summit to forge the grouping into a counterweight to Western dominance of global institutions.
Source: https://energynewsafrica.com
Nigeria: Ex-Oil Minister Charged With Bribery Offences In UK
A former Nigerian Oil Minister, Diezani Alison-Madueke, has been charged with bribery offences by the United Kingdom police.
She is suspected to have received bribes in return for awarding multi-million-pound oil and gas contracts during her tenure.
The 63-year-old woman served as Petroleum Minister from 2010 to 2015, under former President Goodluck Jonathan.
She also acted as president of the Organisation of the Petroleum Exporting Countries (OPEC) from 2014-2015.
“We suspect Diezani Alison-Madueke abused her power in Nigeria and accepted financial rewards for awarding multi-million-pound contracts,” said Andy Kelly, Head of the National Crime Agency’s (NCA) International Corruption Unit, as carried by Reuters.
“These charges are a milestone in what has been a thorough and complex international investigation.”
Alison-Madueke was arrested in London in October 2015, a few months after leaving office, and has also been the subject of investigations in Nigeria and the United States.
She has previously denied allegations of corruption.
Reuters reported that an attempt to speak to a London lawyer who was acting for her in 2015 to comment on the issue failed.
The NCA said she was currently living in St John’s Wood, an upmarket area of west London, and would appear at the Westminster Magistrates’ Court on October 2.
It said Alison-Madueke was accused of benefiting from at least 100,000 pounds ($127,000) in cash, chauffeur-driven cars, flights on private jets, luxury holidays for her family and the use of multiple London properties.
Charges against her also detail financial rewards including furniture, renovation work and staff for the properties, payment of private school fees and gifts from high-end designer shops such as Cartier jewellery and Louis Vuitton goods, the NCA said.
It added that assets worth millions of pounds relating to the alleged offences had been frozen and that it had provided evidence to the U.S. Department of Justice that enabled them to recover assets worth $53 million linked to Alison-Madueke.
Nigerian courts have also ordered the seizure of tens of millions of dollars worth of assets including properties, cars, large quantities of jewellery and a gold iPhone in a series of rulings in recent years.
Source: https://energynewsafrica.com
Tanzania: System Error At Gas-Fired Plant Causes Power Outages In Parts Of Tanzania
Parts of Tanzania are currently experiencing a power outage as a result of a system error which occurred at a gas-fired plant operated by Tanzania Electric Supply Company (Tanesco).
A journalist in Mwansa, one of the towns in Tanzania, told this portal that “since yesterday, we have not had power.”
On Tuesday, Tanesco warned of possible power outages in parts of the East African nation due to a system error which occurred.
The company said the error resulted in a shortfall of 268 megawatts of power in the transmission system, a statement signed by Tanesco’s Directorate of Communications and Public Relations on Tuesday, August 22, 2023, indicated.
As of 2021, Tanzania’s power generation capacity was around 1,500 megawatts from various sources, therefore, the shortfall would lead to a lack of electricity service at different times across the country.
“Efforts to fix the problem are ongoing and we will notify our customers every four hours as the power availability improves,” part of the statement said.
Source: https://energynewsafrica.com
Ghana: Ghana Gas, Quantum Terminals Cut Sod To Upgrade Anyinase Health Centre With US$2 Million
Ghana National Gas Company (GNGC) and Quantum Terminals Limited (QTL) have jointly cut sod to upgrade the Anyinase Health Centre to a 20-bed-capacity health facility with US$2 million.
This upgrade is a direct response to the deteriorating state of the Anyinase Health Centre’s infrastructure and its limited service offerings, which currently cater for over a quarter of the population in the Ellembelle District of the Western Region.
Despite the vital role that the Anyinase Health Centre has played in the lives of residents and the convenience it provides to GNGC employees due to its proximity to the operational headquarters, the facility’s conditions have deteriorated, leaving it capable of providing only outpatient department (OPD) services.
Stephen Donkoh, Head of Community Relations and Corporate Social Responsibility (CR & CSR) at GNGC, highlighted during the sod-cutting ceremony that the US$2 million upgrade is a testament to the company’s commitment to supporting community health.
With an estimated completion period of 12 months, this undertaking underscores GNGC’s dedication to enhancing healthcare services.
In the realm of community development, Ghana Gas focuses on five thematic areas: provision of educational infrastructure, health, sports, water and sanitation and skill building.
On this occasion, the company is fulfilling its health delivery policy for the Ellembelle District for the first time, in recognition of the community’s unwavering support.
Following the upgrade’s completion, the revitalised Ayinase Health Centre is projected to provide a significant 80 per cent of the services offered by the Ekwe District Hospital.
Samuel Bonuedie, Head of Brands and Communication Manager, QT, emphasised that this initiative is a turning point in their ongoing commitment to enhancing the lives of communities in the catchment areas where the company operates.
“Ghana Gas and Quantum Terminals PLC share a common objective in addressing this need and raising healthcare standards. Successful completion of this project is anticipated to significantly elevate healthcare provisions for Anyinase and its neighbouring communities,” he said.
The Ellembelle District Health Director Dr. Augustine Kwesi Amoako commended GNGC and QTL for their transformative project.
He stated that the upgraded health centre is projected to offer comprehensive emergency obstetric care (C-EOC) and in-patient services for over 48 hours, greatly expanding its capabilities.
During the event, the Member of Parliament for Ellembelle, Emmanuel Armah Kofi-Buah, and the District Chief Executive, Kwasi Bonzoh, expressed appreciation to GNGC and QT for their outstanding corporate citizenship in Ellembelle
On this occasion, the company is fulfilling its health delivery policy for the Ellembelle District for the first time, in recognition of the community’s unwavering support.
Following the upgrade’s completion, the revitalised Ayinase Health Centre is projected to provide a significant 80 per cent of the services offered by the Ekwe District Hospital.
Samuel Bonuedie, Head of Brands and Communication Manager, QT, emphasised that this initiative is a turning point in their ongoing commitment to enhancing the lives of communities in the catchment areas where the company operates.
“Ghana Gas and Quantum Terminals PLC share a common objective in addressing this need and raising healthcare standards. Successful completion of this project is anticipated to significantly elevate healthcare provisions for Anyinase and its neighbouring communities,” he said.
The Ellembelle District Health Director Dr. Augustine Kwesi Amoako commended GNGC and QTL for their transformative project.
He stated that the upgraded health centre is projected to offer comprehensive emergency obstetric care (C-EOC) and in-patient services for over 48 hours, greatly expanding its capabilities.
During the event, the Member of Parliament for Ellembelle, Emmanuel Armah Kofi-Buah, and the District Chief Executive, Kwasi Bonzoh, expressed appreciation to GNGC and QT for their outstanding corporate citizenship in Ellembelle Texas Electricity Prices Soared 6,000% As A Fresh Heat Wave Is Expected To Shatter Records.
Texas power prices soared 6,000% on Thursday as a fresh heat wave is expected to shatter temperature records in the coming days.
Spot electricity prices jumped to $4,750 per megawatt-hour Thursday afternoon from the average of $75 on Wednesday afternoon, according to data from grid operator Electric Reliability Council of Texas (ERCOT) cited by Bloomberg.
At that level, prices neared the $5,000 cap and represented the highest in more than five weeks, the report said.
The price spike came as an excessive heat warning was issued for north Texas, which includes the Dallas-Fort Worth area.
The warning for the region will remain in effect through Sunday night, and during that span high temperatures are expected to range between 105 and 113 degrees.
This summer has seen brutal heat waves for Texas and large swaths of the US, as well as Europe and other parts of the Northern Hemisphere. In June, Texas power prices doubled in a single day ahead of an earlier record-breaking streak.
The Texas power market is deregulated and on its own electricity grid. But while it has experienced massive spikes in demand this summer, with Thursday nearing the record high of 85.5 gigawatts, supplies have held up.
That’s due in part to gains in renewable energy. Texas generated about 40% of its power from natural gas last year, with wind accounting for about 25% and solar energy also contributing, according to ERCOT.
South Africa: BRICS Ministers Of Energy Resolve To Increase Efforts For Energy Access
The Energy Ministers of BRICS, a group of the world economies comprising Brazil, Russia, India, China and South Africa have resolved to significantly increase efforts to ensure access to affordable, reliable, sustainable and modern energy.
The group resolved this during the 8th Annual Meeting in Johannesburg, South Africa, last Friday.
The resolution is given to the 733 million people who lack access to electricity globally, a statement from the Department of Mineral Resources and Energy, South Africa, said.
According to the statement, BRICS Energy Ministers believe that an inclusive, diverse and holistic approach to energy mix is important to achieve sustainable energy supply while averting potential future disruptions in the sector.
“Deliberations at the Ministers’ meeting focused on programmes and initiatives that seek to promote cooperation, growth and sustainable development of the member states’ energy sector. These include enhancing energy security, advancing universal access to energy, minerals for energy transitions and research and technological cooperation,’’ the statement said.
On energy security, the BRICS countries intend to pursue balanced and economically sound energy policies based on their respective national circumstances, plans and priorities, building up capacities to safeguard the energy supply.
On minerals for energy transitions, BRICS Energy Ministers undertook to exchange best practices and standards in the development and beneficiation of minerals in the country of origin that have been identified as critical for clean energy sources and technologies.
Furthermore, the delegates committed to exploring various technologies and new materials that are central to global energy transitions and carbon reduction.
In this regard, BRICS would leverage the existing, as well as new and emerging energy technologies.
Source: https://energynewsafrica.com
Ghana:VRA Books Gh¢110.8M Profit In 2022
Ghana’s state’s largest power generation company, Volta River Authority (VRA), recorded a profit of Gh¢110.893 million in 2022, according to the Auditor General’s Report which has also been confirmed by the company.
The 2022 profit is about a 1.7 per cent decline over the previous year.
In 2021, the Authority registered a profit of Gh¢112.758 million.
According to the 2022 Auditor General’s Report, total income increased by 34 per cent to Gh¢5.628 billion in 2022, from Gh¢4.199 million in 2021. The increase in total income was due to a 38.7 per cent increase in revenue from power sales.
On the other hand, total expenditure increased by 35.0 per cent, from Gh¢4.086 billion in 2021 to Gh¢5.517 billion in 2022.
This was mainly due to increases in the cost of sales and depreciation.
In terms of the balance sheet, Non-Current Assets increased from Gh¢18.380 billion in 2021 to Gh¢26.008 billion in 2022, representing an increase of 41.5 per cent.
The increment was due to revaluation gains and the acquisition of property plants and equipment during the year.
The company’s current Assets also increased by 36.1 per cent from GH¢8.631 billion in 2021 to Gh¢11.751 billion in 2022 due to an increase in trade and other receivables.
Similarly, Current Liabilities recorded an increase of 26.2 per cent from Gh¢6.861 billion in 2021 to Gh¢8.659 billion in 2022. This was due to an increase in trade payables from GH¢6.404 billion in 2021 to GH¢8.363 billion in 2022.
For liquidity, the current ratio increased to 1.4:1 in 2021 (2020: 1.3:1).
Source: https://energynewsafrica.com
Ghana: PURC Increases Electricity Tariff By 4.22%, 1.18% For Water In September
The Public Utilities Regulatory Commission (PURC), the economic regulator for electricity and water in the Republic of Ghana, has announced an increase in electricity and water tariffs by 4.22 per cent and 1.18 per cent respectively, for non-life residential consumers effective 1st September 2023.
The Commission, however, did not approve tariff increases for industrial consumers, non-residential consumers notably hairdressing salons, barbering shops and local restaurants.
This follows the conclusion of the regulatory process for the quarterly adjustment of tariffs by the PURC.
The quarterly tariff review mechanism seeks to track and incorporate changes in key factors used in determining natural gas, electricity and water tariff.
These factors are the Ghana/Dollar exchange rate, inflation, electricity generation mix and the weighted average cost of natural gas (WACOG).
Source: https://energynewsafrica.com
Africa Oil Week 2023 To Welcome World Leaders To SA To Chart Africa’s Energy Destiny
Industry leaders from across the international oil-and-gas sector, government representatives, energy policymakers, financiers and dealmakers will converge in Cape Town in October, when Africa Oil Week (AOW) 2023 takes place, under the theme, “Maximising Africa’s Natural Resources in the Global Energy Transition”.
AOW 2023, billed as “Africa’s Leading Upstream Event” comes at a pivotal moment, as the world navigates a complex energy transition towards Net Zero.
The event brings together major global decisionmakers to help map a sustainable, realistic transition path that supports Africa’s energy needs, stimulates socio-economic growth, and ensures Africa retains control of its own natural resources.
For more than a quarter of a century, AOW has been the premier global platform for sharing industry developments and stimulating transactions across the African oil-and-gas upstream, bringing together governments, national and international oil companies, independents, investors, the geological-and geophysical community and service providers.
“We are proud to provide a platform to discuss how Africa can develop its oil and gas sector through strong, sustainable carbon-management strategies,” says Ore Onagbesan, Head of Energy for AOW.
“We remain committed to this event – as we have been for the past 29 years – as an energy forum that makes a positive global impact, and which leaves a legacy of socioeconomic development across the African continent.’’
This year, more than 2000 industry leaders including African governments and the private sector will be attending the five-day event, which offers pioneering industry-leading insights, and unrivalled deal-making opportunities.
AOW 2023 will feature prominent, highly influential speakers at the core of energy-sector development. This year’s speakers include Maggy Shino, Commissioner for Energy, Ministry of Mines and Energy; Phuthuma Nhleko, Chairman of Tullow; Paulino Fernando de Carvalho Jerónimo, CEO of ANPG; Luca Vignati, Head of Upstream at Eni; Dennis Zekveld, Country Chairman, Shell Namibia; and Nina Koch, Head of Africa, Equinor.
A new platform at AOW 2023 is the Finance and M&A Forum, sponsored by Herbert Smith Freehills, which will look at innovative project-financing models emerging to meet evolving ESG requirements. The forum will see banks, traders, advisors, and operators sharing knowledge on debt and equity financing in oil and gas during the transition, with practical examples from successful partners operating in challenging jurisdictions.
Another new feature is the Gas Forum, with Roger Brown, CEO of Seplat Energy; Unni Fjaer, Vice President and Country Manager for Tanzania, Equinor; and Duncan Wallace, Technical Director, Chariot.
The full day programme focusses on the potential of gas as Africa’s transition fuel, beginning with “Monetising Africa’s Gas in the Next 7–10 years”.
This year, Africa Oil Week again takes place alongside Green Energy Africa Summit 2023, billed as “the global platform for unlocking Africa’s sustainable energy potential”.Africa Oil Week 2023, Africa’s leading upstream event, runs from October 9–13 at the Cape Town International Conference Centre.
Ghana: NPA Changes Logo In Rebranding Move
Ghana’s petroleum downstream regulator, National Petroleum Authority (NPA), is currently rebranding its corporate image to make the organisation more visible to industry players and the public, both in Ghana and across the West African sub-region.
As part of the rebranding effort, the NPA has redesigned its corporate logo to reflect the regulatory mandate of the Authority.
The previous logo of NPA had two circles with the map of Ghana inside the first circle and the acronym NPA written on the map.
However, the current logo, which is more reflective of the work of the Authority, has the map of Ghana with the symbol of oil inside the map. And inside the oil symbol is an eye with NPA written beside it at the right side.
Energynewsafrica.com spotted the new logo in a post on Facebook by the CEO of NPA, Dr Mustapha Abdul-Hamid, on Monday, August 21, 2023.
The post, which was intended to promote LPG, which is clean energy compared to charcoal or woodfuel, sought to ask consumers what else could be harming their respiratory health.
“Let’s dive into the surprising culprit that poses a risk to your respiratory system,” his post said.
Speaking to Abdul-Kudus Mohammed, Corporate Communications Manager at NPA, about the logo, he said the previous logo did not reflect the work of the Authority, hence, the decision to change it.
“If you look at the present logo, it has a symbol of oil which talks about the industry within which we operate. And then, it carries an eye in-between, showing that we are regulator or having the eye on the industry and is situated within the Ghana map, meaning our jurisdiction is within Ghana. It clearly tells you that we oversee and regulate the activities of oil marketing industry in the downstream. Logos tell a story, so this new logo tells our story,” he explained.
According to him, the Authority would also properly name its head office located around the Dzorwulu traffic light to make it easier for consumers and industry players to locate it.
“This is part of a bigger corporate image,” he added.
The National Petroleum Authority was established by an Act of Parliament (NPA Act 2005, ACT 691) to regulate the petroleum downstream industry in Ghana.
As a regulator, the Authority ensures that the industry remains efficient, profitable, fair and at the same time, ensuring that consumers receive value for money.
Source: https://energynewsafrica.com
Alberta Halts New Wind And Solar Projects As Resistance To Renewables Grows
Alberta, Canada’s oil heartland, this month instituted a moratorium on new wind and solar power projects for a period of seven months.
The moratorium only concerns installations of over 1MW in capacity and its purpose is to give Alberta’s government time to study the impact of such installations on the grid, on the environment, and “Alberta’s pristine viewscapes”, according to the Wall Street Journal.
Alberta, however, is not the only one pushing back against wind and solar projects.
Reports from earlier in the year suggest that there is growing opposition in rural America against windmills and solar farms.
At the time, the WSJ suggested that this opposition could jeopardize the goals of the Inflation Reduction Act which represents the bulk of subsidies allocated for transition-related projects, with a heavy focus on wind and solar power.
Representatives of the wind and solar industries in Alberta are now expressing similar concerns.
The CEO of the Canadian Renewable Energy Association said that the moratorium will put at risk some 80 projects worth a combined $15 billion.
The WSJ notes in its report that most of the wind and solar installations in Canada are located in Alberta.
The oil province’s share of Canada’s total is 75% as of 2022, Vittoria Belissimo told the WSJ, with the total new additions last year in Alberta reaching 1.39 GW.
This fast buildout may be part of the problem. In its earlier report from May, the WSJ noted that opposition to wind and solar installations is coming from areas that have seen massive buildouts already.
The report cited Kansas as an example, with wind power capacity expanding fast over the past 20 years, coming to account for 45% of the state’s electricity output.
What followed was a moratorium on new wind and solar projects in more than a dozen counties in Kansas amid concern for the environment and the effect these installations are having on local ecosystems.
Source: Oilprice.com
The Unintended Consequences Of Severing Electricity Supply To Niger Amidst Recent Coup (Article)
Niger’s economy is based largely on subsistence crops, livestock, and some of the world’s largest uranium deposits. Drought cycles, desertification, a 3.4% population growth rate and the drop in world demand for uranium have undercut an already marginal economy. Traditional subsistence farming, herding, small trading, and informal markets dominate an economy that generates few formal sector jobs. It is a least developed and low-income economy for that matter.
I have four (4) very basic questions demanding answers from the ECOWAS Leaders on the decision to severe electricity to Niger: Is this the kind of country you opted to deny electricity access because of the recent coup? Where is the intercept of your action with the Sustainable Development Goals? What is the expected gain at the end of your action to Niger and ECOWAS? What is the real justification for your decision to cut the power supply to this nation?
The recent coup in Niger has not only ignited political turmoil but has also cast its shadow on vital sectors like energy, with the abrupt severing of electricity supply. This paper delves into the negative impact of disconnecting electricity supply to Niger in the wake of the coup. As electricity constitutes a lifeline for essential services and socio-economic activities, the disruption has far-reaching consequences that demand urgent attention.
Electricity’s Crucial Role
Electricity access in Sustainable Development Goals is a necessity of life and not a privilege towards eradication of poverty. Electricity is the heartbeat of modern societies, powering health care facilities, communication networks, water supply systems, and economic activities. The abrupt cessation of electricity delivery in Niger due to the coup ripples through every facet of daily life, exacerbating existing challenges and creating new ones.
Impact on Healthcare
Medical Facilities:
Hospitals and clinics heavily rely on uninterrupted electricity supply for medical equipment, life-saving procedures, and refrigeration of medicines. The sudden disruption threatens patient care, potentially leading to critical situations.
Vaccine Storage:
In the midst of a pandemic, the lack of electricity imperils the storage of vaccines, endangering ongoing vaccination efforts and public health initiatives.
Socio-Economic Disruption
Business Operations:
Industries, businesses, and commercial establishments are paralyzed without electricity. The halt in economic activities contributes to reduced incomes, unemployment, and economic instability.
Education:
Schools and universities heavily depend on electricity for online learning, digital resources, and administrative tasks. The outage disrupts education, impacting future human capital development.
Public Safety and Communication
Security Services:
Electricity is crucial for surveillance cameras, communication systems, and emergency response mechanisms. A power vacuum weakens public safety infrastructure.
Communication Networks:
Electricity outage affects telecommunications, impeding information dissemination and contact with loved ones during times of crisis.
Food Security and Water Supply
Agriculture:
Without electricity, agricultural operations are hindered, affecting food production, processing, and distribution. This can exacerbate food insecurity.
Water Supply:
Electricity powers water pumping and treatment systems. The lack of water compromises hygiene, sanitation, and access to safe drinking water.
Humanitarian Concerns
Vulnerable Populations:
The most vulnerable – children, elderly, and marginalized communities – suffer disproportionately during such disruptions, as they lack resources to cope.
Humanitarian Assistance:
The ability to deliver aid, medical supplies, and relief efforts is compromised, aggravating the impact of the coup on affected populations.
The Urgent Need for Remediation
The negative impact of severing electricity supply to Niger in the aftermath of the coup cannot be underestimated. As the nation grapples with political transitions, mitigating the collateral damage to essential services, healthcare, education, and socio-economic stability is paramount. International organizations, neighboring countries, and diplomatic efforts must collaborate to restore electricity supply swiftly, ensuring that the crisis does not morph into a humanitarian catastrophe. By prioritizing the restoration of electricity, Niger can begin the journey towards stability and recovery. Given the commissioning of the West Africa Power Pool (WAPP) and the Regional Electricity Market (REM), we do not expect to see political issues to become a barrier to the regional electricity trade.
Source: Dr. Elikplim Kwabla Apetorgbor, Power Systems Economist & CEO of the Independent Power Generators, Ghana.
Ghana: WAPCo’s New MD Calls On GRIDCo’s Chief Executive Officer
The newly appointed Managing Director of the West African Gas Pipeline Company (WAPCo), Ms Michelle Burkett, has visited Ghana’s power transmission company, GRIDCo, to officially introduce herself to the company.
She replaced Mr. Gregory Germani, who this portal understands transitioned to a new role at Chevron Pipeline & Power in Houston, Texas, USA.
Ms Burkett, who was accompanied by Dr Isaac Adjei Doku, General Manager of Corporate Affairs at WAPCo, held a meeting with the Chief Executive of GRIDCo, Ing Ebenezer Kofi Essienyi.
During the meeting, Ms Burkett praised the collaborative relationship between the two entities and emphasised transparent communication, especially in challenging circumstances.
She recognised GRIDCo as a vital downstream partner and pledged her dedication to strengthening this partnership.
Dr. Doku mentioned WAPCo’s efforts to enhance engagements with their key stakeholder, the media.
Ing Mark Baah, the Director of Southern Network Operations, revealed GRIDCo’s plans for Safety and Risk Management training sessions in support of WAPCo’s operations.
Also in the meeting were Mr Samuel Nkansah, the Director of Finance; Ing Stephen Debrah, the Manager for Dispatch; and Wofa Kojo Kwarteng, the Manager of the Executive Office.
Source: https://energynewsafrica.com