Ghana: Fuel Pricing: Some Facts You Need To Know (Article)

Michael Creg Afful
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By: Abass Ibrahim Tasunti   The price of fuel at the pump is of interest to every Ghanaian because of its direct impact on our daily lives. Whether you drive a personal car or use public transport, the changes in the prices of fuel affects your cost of living. Fuel is a key ingredient required to power the economy, and therefore its level of consumption has a direct relationship with how strong an economy is; a rise in the consumption of petroleum products is usually an indication of a growing economy. The United States of America (U.S.A) consumes the most oil in the world and is the world’s biggest economy, followed by China which is the world’s second largest oil consumer and therefore the second largest economy in the world. Therefore, a product of this nature which has such a direct impact on every citizen’s life, and has no close substitutes will always be of utmost importance to consumers, and hence the need to know what goes into how much we pay for it and what drives the changes in its price.  Who Determines The Price Of Fuel In Ghana? The price of fuel in Ghana is determined by a formula that takes into consideration the following factors:
  1. The world market price of each petroleum product;
  2. The freight cost from source to Ghana, storage costs and all other associated costs incurred before supply to retail outlets (referred to as the Suppliers’ Premium);
  • The Ghana Cedi (GHS) to US Dollar (USD) exchange rate;
  1. The taxes/levies on each petroleum product; and
  2. The margins on each product.
The National Petroleum Authority (NPA) regulates the petroleum downstream industry in Ghana. One of its core mandates is to ensure that the pricing of petroleum products is done in conformity with the prescribed petroleum pricing formula which is made up of the components listed above. Until July 2015, the pricing of all petroleum products was regulated by the NPA. Therefore, before the start of every pricing window on the 1st or 16th of each month, the NPA will compute and announce the prices at which each petroleum product should be sold. This allowed government to control prices and subsidised the prices for consumers when it deemed it fit to do so. However, due to the challenges that price control brought on the economy and the threat it posed to the continuous availability of petroleum products, the pricing of petroleum products in Ghana was deregulated in July 2015. Price deregulation allowed market forces to determine the prices of petroleum products without the direct control of government. This resulted in the removal of subsidies on petroleum products, and the prices change in response to price changes on the international market and the strength of the GHS against the USD. The pricing of Premix Fuel and Residual Fuel Oil (RFO) have not been deregulated. The NPA is still responsible for the computation and announcement of the prices of these two products which are highly subsidised by government. Premix Fuel is the fuel used by fisherfolk in their outboard motors while RFO is used by local manufacturing companies in production of goods. Government made a policy to continue to support these two critical sectors of the economy, particularly because the end-users can easily be targeted. The pricing of Aviation Turbine Kerosene (use by aeroplanes), the gasoil used the mining sector, oil rigs and international marine vessels that bunker in Ghana are also regulated by the NPA. Even though pricing of petroleum products is deregulated, the NPA plays a supervisory role by ensuring that the Bulk Import Distribution and Export Companies (BIDECs) and Oil Marketing Companies (OMCs)/Liquefied Petroleum Gas Marketing Companies (LPGMCs) who are now responsible for pricing the other products such as petrol, diesel, and LPG do so in conformity with the prescribed petroleum pricing formula. The NPA also conducts regular price monitoring exercises and analyses the prices determined by the BIDECs and OMCs/LPGMCs on a regular basis to ensure that the interests of both consumers and Petroleum Service Providers are protected, with regards to pricing, as required by Section 2(e) on the NPA Act. Components Of The Ex-Pump Price Of Fuel The price at which a consumer buys fuel at the retail outlet or filling station is called the ex-pump price. The ex-pump price is arrived at by adding the ex-refinery price of the product to the taxes, levies and margins imposed on the product. The ex-refinery price is the price at which the importers (Bulk Import, Distribution and Export Companies) sell the product to Oil Marketing Companies (OMCs) and LPG Marketing Companies (LPGMCs). It is made up of the world market price also called the FOB (Free On Board) price of the product and the cost of landing the product into Ghana or producing the product locally before it is sold to the OMCs/LPGMCs for supply to their retail outlets. The Ghana Cedi to US Dollar (GHS/USD) exchange rate is used to convert the ex-refinery price from USD to GHS before sale to the OMC/LPGMS. Currently, the ex-refinery price represents about 75% and 81% of the ex-pump price of petrol and diesel respectively. The taxes and levies represent about 17% and 14% respectively, while the various margins together represent about 8% and 6% of the pump prices of petrol and diesel respectively. Why Does The Price Of Fuel Change Frequently? In Ghana, there are two pricing windows in a month (1st – 15th and 16th to end of month) within which both the BIDECs and OMCs/LPGMCs generally review the prices of petroleum products. The prices of petroleum products on the world market and the exchange rate change daily, however, because of the bi-weekly pricing window policy practiced in Ghana, the daily prices on the world market are averaged for a two-week period and used in the pricing formula. The world market prices and the exchange rates used in the pricing formula to determine ex-pump prices in Ghana vary for every pricing window due to the daily changes mentioned above. In view of this, the ex-pump prices in Ghana change in response to the level of changes in these components of the pricing formula. Thus, when prices on the world market rise, it leads to increases in ex-pump prices in Ghana and vice versa. The depreciation of the Ghana Cedi (GHS) against the US Dollar (USD) also results in increases in ex-pump prices. The NPA publishes the “Petroleum Price Indicators” daily on its website (www.npa.gov.gh) and on the front pages of several newspapers, to keep consumers informed of the changes in the world market prices and the exchange rates for every window. An example is shown below: Prior to the implementation of the Price Deregulation in July 2015, when the pricing of petroleum products was controlled, government often intervened in the pricing of petroleum products by subsidising, and thereby preventing the passing on of the full price changes, particularly price increments, to consumers. As a result of these interventions by governments, ex-pump prices used to remain unchanged over longer periods, while the level of subsidies kept accumulating. This sometimes created the impression that fuel prices were stable during those periods, when it was rather the interventions by government that were preventing the changes from being seen at the pump. However, after the implementation of the price deregulation policy which removed government’s direct intervention in the pricing of petroleum products, in the form of subsidising, ex-pump prices have been changing frequently (i.e. almost every pricing window) in response to the changes in the world market prices and the exchange rates. Why Price Deregulation? How Has It Benefited The Country? Regulation of prices allowed governments to intervene in the pricing of petroleum products by preventing the BIDECs and OMCs/LPGMCs from passing on price increases to consumers at the pumps. To ensure that these companies were able to recover their cost of investment to be able to pay their suppliers and continue supplying products regularly to consumers, government was required to reimburse them. However, because governments did not make budgetary provision for subsidies, these payments were mostly delayed and resulted in liquidity challenges for oil importers (BIDECs) and thereby threatening their ability to supply products to meet demand. The removal of subsidies has addressed this threat and has allowed the suppliers of petroleum products to fully recover their investments which have led to the interrupted supply of petroleum products to Ghanaians. The growth of the economy relies on the availability of petroleum products and therefore this threat to supply had to be addressed. Also, the discomfort that accompanied shortages of petroleum products is highly undesirable and after several consultations, it was generally agreed that it was better for petroleum products to be available at the right price than to subsidise their prices and not have them available. Another major challenge faced by the petroleum downstream industry when prices were regulated had to do with exchange rate losses. The NPA used to determine the exchange rates for the pricing of petroleum products. Due to the rapid depreciation of the Ghana Cedi against the US Dollar, the exchange rate used by the NPA was mostly below the rate at which the BIDECs eventually procured US Dollars to pay their suppliers. The BIDECs used to make claims for these exchange rate losses from government because they could not apply the actual exchange rates at which they procured US Dollars in pricing their products. This burden was taken off government because Price Deregulation allows the BIDECs to determine the exchange rates to use in pricing their products and therefore they are required to manage this risk by themselves. The implementation of the Price Deregulation policy has introduced keen competition to the petroleum downstream industry which has benefited the consumer. Prior to the implementation of this policy and companies enjoyed the same suppliers’ premiums and margins, and ex-pump prices were the same at almost all retail outlets. However, due to the level of competition that has accompanied this policy there are variations in ex-pump prices which benefits the consumer. Most companies seek strategies that will enable them offer products to consumers at the least possible cost and price. Conclusion Bringing transparency to the pricing of petroleum products in Ghana has become necessary to ensure that consumers are well-informed and empowered to understand what goes into how much they pay for fuel. This article has shown what the components of the pricing formular used in Ghana are and which of these components that are the main drivers of the frequent changes seen in fuel prices at the pumps. It has also provided some background information on the price deregulation policy. The goal of this article and future ones like it is to make a concept which for a long time has been considered very technical easily understandable to the layman. About the Author: Abass Ibrahim Tasunti heads the Economic Regulation Department at the National Petroleum Authority (NPA). He has over 11 years’ experience in the petroleum downstream industry in Ghana.  

UK Energy Crisis Is ‘Bigger Than The Pandemic’

Michael Creg Afful
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The United Kingdom will have to find an answer to soaring energy bills soon or risk a humanitarian crisis. But freezing gas and electricity prices over the next two winters could cost the government over £100 billion ($118 billion), more than it spent paying millions of people’s salaries during the pandemic. Earlier this year, the UK government tried to protect households against 90% of the expected increases in energy bills through tax cuts, energy bill rebates and direct payments. But natural gas and power prices have shot up since then, as forecasts of future increases. Researchers at the Institute for Government said Tuesday that the government would need to spend an extra £23 billion ($27 billion) to protect households against about 90% of the expected rises in energy bills until April 2023. Offsetting the same proportion for the year to April 2024 would cost another £90 billion. That forecast chimes with the cost of a proposal by Scottish Power, one of the UK’s biggest energy companies. It has called on the UK government to protect millions of households by freezing their bills for two years, according to report by the Financial Times. The average annual bill currently stands at £1,971 ($2,318) — up 54% so far this year — but is forecast to shoot past £3,500 ($4,117) when the upper price limit is fixed Friday for the last three months of this year. Analysts at Auxilione, a research firm, say the average household could be paying as much as £6,433 ($7,579) a year for natural gas and electricity come next spring if the government doesn’t intervene. Scottish Power says the UK government should cap energy bills at £2,000 ($2,356) and give money to suppliers to meet the much higher costs of gas and electricity on wholesale markets. The £100-billion cost of the subsidy would come from increased government borrowing, funded by general taxation over the next decade or more, the Financial Times said, citing unnamed sources familiar with the matter. “It is going to be truly, truly horrific for a large number of people,” Keith Anderson, CEO of Scottish Power told STV, a Scottish TV station, on Monday, referring to the price increases. “This is bigger than the pandemic. It’s a big national crisis,” he added. The UK government’s pandemic furlough scheme, which ran for 18 months, cost almost £70 billion ($82 billion). In March 2020, when the outbreak of the coronavirus pandemic shuttered businesses, the government agreed to subsidize workers’ salaries to prevent mass layoffs. So far this year, the government has offered about £33 billion ($39 billion) in support to households to help with energy costs, through a mix of tax cuts, energy bill rebates and direct payments, the Institute for Government said in its report published Tuesday. The UK government says it is doing more. “We know the pressures people are facing with rising costs, which is why we have continually taken action to help households by phasing in £37 billion worth of support,” a spokesperson for the Department of Business, Energy and Industrial Strategy said. “We are giving a £400 discount on energy bills this winter and eight million of the most vulnerable households will see £1,200 extra support. While no Government can control global gas prices, over 22 million households are protected by the price cap, which continues to insulate households from even higher prices,” the spokesperson added. But alarm is spreading within the UK energy industry. On Tuesday, Philippe Commaret, an executive at France’s EDF, a major player in the UK market, told the BBC that, without more support, about half of UK households could fall into fuel poverty from the start of next year, meaning that they would have to spend more than 10% of their disposable income on energy. Leaders of the UK National Health Service warned last week of a “humanitarian crisis.” Many people could fall sick this winter as they “face the awful choice between skipping meals to heat their homes and having to live in in cold, damp and very unpleasant onditions,” they said. Wholesale natural gas prices started increasing last year as countries reopened from their pandemic lockdowns, causing a global spike in demand. Russia’s invasion of Ukraine in late February, and the resulting energy crunch, has only pushed prices further up. Western countries have banned Russian coal and oil imports, and Europe is desperately trying to wean itself off Russian natural gas. June was the first month on record that the United Kingdom did not import any fuel from Russia, traditionally one of its major suppliers, according to data released Wednesday by the Office for National Statistics. Eye-watering prices have caused 29 smaller energy suppliers in the UK to go bust since last summer. Those that have survived have passed on much of the cost onto their customers.       Source: CNN

Gabon: Solen Lauches Construction Of 120 MWp Solar Power Plant At Ayémé Plaine

Michael Creg Afful
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Solen SA Gabon, a subsidiary of Solen Renewable Dubai, has launched the construction of the Ayémé Plaine photovoltaic solar power plant, a locality located some thirty kilometres from the capital Libreville. The future facility will have a capacity of 120 MWp. The launch of the Ayémé Plaine solar photovoltaic power plant in Gabon comes almost six months after the signing of the related framework agreement (in March 2022) between the Gabonese Minister of Energy and Hydraulic Resources, Alain-Claude Bilie-By-Nze, and Praveen Pai, Solen’s Operations Manager. The company, which is implementing the power supply project, has until July 2023 to deliver the future installation. Initially, Solen SA Gabon, the subsidiary of Solen Renewable Dubai, will install solar panels with a combined capacity of 60 MWp, equipped with a 15-hour battery energy storage system. In its second phase, the project will install an additional 60 MWp of solar photovoltaic panels, also equipped with a 15-hour battery energy storage system. This will form a 120 MWp solar power plant spread over a 251 hectare site in the locality of Ayémé Plaine, located some thirty kilometres from the capital Libreville. The aim is to complete the electricity mix in the Estuaire region in order to provide the population of this province with electricity that is both competitive and that will effectively help to solve the problem of load shedding. In addition, the future solar power plant will help reduce carbon dioxide (CO2) emissions in the target area. For the future solar power plant, Solen will finance, install and operate it. The company will sell its output to the Gabonese Water and Energy Company (SEEG) for 25 years under a power purchase agreement (PPA). In the long term, the Gabonese government aims to increase the share of renewable energy in its electricity mix to 80% by 2030.

Ghana: Group Welcomes Hikes In Electricity And Water Tariffs; Says It Could Have Been Worse

Michael Creg Afful
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A civil society group— Coalition of Stakeholders in Electricity Concession and Arrangements (COSECA)—in the Republic of Ghana has welcomed the increment in electricity and water tariffs announced by the country’s utility regulator, Public Utilities Regulatory Commission (PURC). According to the group, the increases in electricity and water tariffs would save the situation, stating that it could have been worse. The PURC, on Monday 15th August 2022, announced a 27.15 per cent and 21.55 per cent increment in electricity and water tariffs respectively. This is expected to be implemented by the utilities from 1st September 2022. In a statement issued and signed by Dr Steve Manteaw on behalf of the group, COSECA noted that although the Association of Ghana Industries (AGI) and Ghana Hoteliers Association have complained about a potential negative impact of the tariff on their members’ operations, their analysis shows that the new tariff regime is more business-friendly than the previous tariff regime.
Dr. Steve Manteaw
Citing paragraph 6.5 of the PURC’s publication of electricity tariffs published on 16th December 2020, which states: “The distribution service charges (DCS) provided in the third schedule are the rates applicable to the distribution of electricity by DISCO from 1st January 2021 as follows: a. DSC 1 is the rate for DISCos to recover the cost of distribution network operations. b. DCS2 is the rate for DISCos to recover distribution losses,” the group alleged fraud in depriving ECG of this vital revenue stream that would have allowed it to operate efficiently without requiring as much as the 148 per cent increase in tariff. From the group’s calculations, the restoration of DSC-2 would automatically translate into a reduction in water tariffs, as electricity constitutes about 30 per cent of the cost of producing water. “Our checks have revealed that the DSC-2 has been restored as part of the current major tariff review exercise, and this might have formed the basis for the reduction in ECG’s requested hikes in tariffs.”    While COSECA welcomed this development, it believes the newly announced tariffs for water and electricity could come down or go up during the quarterly automatic adjustments, if other concerns raised in its press statement of 2nd June 2022 are addressed. COSECA also noted with concern the non-residential customer classification of 0-300kwh. This classification affects Small & Medium Scale Enterprises (SMEs) such as hairdressing salons, barbering shops, beauty parlours, tailoring and dressmaking shops, welding, mechanic shops, vulcanizing and carpentry workshops. The current customer classification systems of ECG, NEDCo and ENCLAVE power, per the above PURC categories, cannot differentiate them from non-residential customers and potentially could see them pay very high tariffs which could drive them under the current economic conditions. This needs to be urgently addressed by both the PURC on one hand and the power distribution companies on the other. “COSECA has some solutions we are willing to bring to the table to help address this problem to ensure SMEs do not suffer unduly due to high tariffs. “We are open to further discussions on this matter before the 1st September implementation of the new tariffs,” it said. The additional measures COSECA wants to be implemented are investments into efforts at reducing commercial losses, effective revenue collection initiatives, curtailment of political interferences in the affairs of the companies, especially in the procurement activities of ECG; improvement in the government’s management of the macro-economic performance indicators, and taking the fight against illegal mining (Galamsey) and its consequential pollution of water bodies more seriously, as it has led to an increased cost of water treatment for GWCL.    

Ghana: GSTS Crowned Southern Zonal Champion Of SHS Renewable Energy Challenge

Michael Creg Afful
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The Southern Zonal Competition of the third edition of the Energy Commissions’ Senior High Schools Renewable Energy Challenge ended on Saturday with the Ghana Secondary Technical School (GSTS) from the Western Region beating other competing schools to be crowned the winner. GSTS won with a total of 80 points. Presenting a project on ‘Tescan Smart Solar Oven’, the team representing the school explained how the environmentally friendly prototype device meant for the hygienic preservation of food, was designed and developed using local materials. In all, eight schools participated in the zonal competition under the theme: ‘Clean Cooking and Food Processing Using Renewable Energy Technologies’. The participating schools were awarded marks based on project ideas, innovation, environmental and social impact, objectives and challenges, why the implementation of the novelty is important and its relation to renewable energy. The participating schools took home a plaque, certificates, branded T-shirts and some souvenirs provided by the Energy Commission, organisers of the Challenge, with support from the Ghana Education Service (GES). Yaa Asantewaa Senior High School (SHS), representing the Ashanti Region, placed second with 79.3 points, while Kpedze SHS (Volta Region) finished third on 74.2 points. Both were presented with certificates and souvenirs. The first three schools have all qualified for the grand finale of the competition, which aims at promoting the efficient use of renewable energy resources and technologies. Other participating schools were the Presbyterian Boys’ SHS (Greater Accra Region), Bueman SHS (Oti Region), Mfantsiman Girls’ SHS (Central Region), Mamfe Methodist Girls’ SHS (Eastern Region) and St Joseph SHS (Western North Region). Executive Secretary of the Energy Commission, Ing Oscar Amonoo-Neizer, explained the rationale of the programme, stating that the Challenge aims at promoting creative thinking and providing mentorship to young and brilliant students. The Challenge highlights various competitions by students in the second cycle institutions and provides a platform for the exhibition of their innovative projects. “It is vital that we eliminate the ‘Chew, pour, pass, and forget’ phenomenon in the educational system of Ghana and promote the practical application of theoretical knowledge. Ing Amonoo-Neizer said one unique thing about the challenge is that the good projects would not end upon the shelves. “There is an arrangement with the Council for Scientific and Industrial Research (CSIR) and the Clean Cooking Alliance (based in the USA) to provide mentorship to the winning projects, and other equally good ones to develop and improve on them to become commercially viable. One likely legacy of this competition is that, in future, some schools are going to hold patent rights to technologies that will be a major source of income to them,” he said. In a speech read by the Director of the Commercial Services Department, Mr Pascal Kanbonnabah, on behalf of the BPA CEO, said, “BPA is happy to join forces again with the Energy Commission, together with other partners, to sponsor the SHS RE Challenge.” To further advance the development of renewable energy in the country, Mr Kanbonnabah said, “BPA is collaborating with the University of Energy and Natural Resources, Kwame Nkrumah University of Science and Technology, and the Berlin Technical University of Germany DAAD to undertake capacity building and Research in renewable energy for students, lecturers and professionals in the RE sector.” Ms Olivia Serwaa Opare, Director, Science Education Unit of the GES, affirmed the resolve of the authorities to advance science, technology, engineering and mathematics education. This, she said, was critical to nurturing the needed future scientists capable of spearheading Ghana’s development agenda. The programme was sponsored by GIZ, an international development organization, Clean Cooking Alliance, Volta River Authority, Bui Power Authority and French Development Agency (AFD).                     Source: https://energynewsafrica.com

Japan Signals Return To Nuclear Power To Stabilise Energy Supply

Michael Creg Afful
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Japan will restart more idled nuclear plants and look at developing next-generation reactors, Prime Minister Fumio Kishida said on Wednesday, setting the stage for a major policy shift on nuclear energy a decade after the Fukushima disaster. The comments from Kishida – who also said the government would look at extending the lifespan of existing reactors – highlight how the Ukraine crisis and soaring energy costs have forced both a change in public opinion and a policy rethink toward nuclear power. Japan has kept most of its nuclear plants idled in the decade since a massive earthquake and tsunami in 2011 triggered a nuclear meltdown at the Fukushima Daiichi power plant. Quake-prone Japan also said it would build no new reactors, so a change in that policy would be a stark turnaround. Kishida told reporters he had instructed officials to come up with concrete measures by the year end, including on “gaining the understanding of the public” on sustainable energy and nuclear power. Government officials met on Wednesday to hammer out a plan for so-called “green transformation” aimed at retooling the world’s third-largest economy to meet environmental goals. Nuclear energy, which was deeply opposed by the public after the Fukushima crisis, is now seen by some in government as a component for such green transformation. Public opinion has also shifted, as fuel prices have risen and an early and hot summer spurred calls for energy-saving. “It is the first step towards the normalisation of Japan’s energy policy,” said Jun Arima, a project professor at the University of Tokyo’s graduate school of public policy. Japan needs nuclear power because its grid is not connected to neighbouring countries, nor is it able to boost output of domestic fossil fuels, he said. Last month the government said it hoped to restart more nuclear reactors in time to avert any power crunch over the winter. As of late July, Japan had seven operating reactors, with three others offline due to maintenance. Many others are still going through a relicensing process under stricter safety standards imposed after Fukushima. Kishida also said the government would look at extending the lifespan of existing reactors. Local media earlier reported this could be done by not including the time reactors remained offline – years in some cases – when calculating their operating time. Under current regulations, Japan decommissions plants after a predetermined period, which in many cases is 60 years.       Source:Reuters

Ghana: President Akufo-Addo Commissions VRA’s 13MW Peak Solar Power Project

Michael Creg Afful
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Ghana’s President Nana Addo Dankwa Akufo-Addo has commissioned the Volta River Authority’s 13MW peak solar power plant at Kaleo in the Upper West Region. He cut the sod for the project in February 2020. The project adds to the company’s 6.5MW peak solar power plant at Lawra, 2.5MW peak at Navrongo and 80kW rooftop solar at its headquarters in Accra. Speaking at a ceremony to commission the project at Kaleo in the Upper West Region, on Tuesday, 23rd August 2022, President Akufo-Addo indicated that the Kaleo Solar Plant, along with ongoing interventions in the area of energy efficiency, use of natural gas for thermal generation, adoption of cleaner cooking solutions, decarbonisation of oil production, amongst others, is helping Ghana accelerate the attainment of her Nationally Determined Contributions as presented at COP26 in Glasgow in the United Kingdom. “The Akufo-Addo government has invested heavily in the electricity transmission network, which will enable us to evacuate more renewable energy through the national grid to support the extension of electricity to all parts of Ghana. For this reason, Kaleo has a dedicated transmission line that evacuates power from the current and future solar capacity at Kaleo to the GRIDCo substation at Wa,” he said. President Akufo-Addo continued, “At peak sun hours, the Kaleo and Lawra plants can meet the entire load at Wa and its environs. This can make Wa the greenest city in Ghana. The completion of the Kaleo Solar Power Plant is consistent with Ghana’s Nationally Determined Contributions to addressing the effects of climate change.” Since 1961, when the nation started commercial production of electricity, almost all the generation assets, except the Bui Hydropower plant, have been located in the middle and southern parts of the country. To this end, the President intimated that the government has taken it upon itself, “as part of our development trajectory, to bring some of these sources closer to the North, thereby, opening up additional opportunities in our regional development journey.” The Volta River Authority, he said, has been one of Ghana’s main vehicles for improving access to electricity and related developments, particularly in the northern parts of the country. “It completed the first solar plant of 2.5 megawatts in Navrongo way back in 2013. Under this government, we have completed a 6.5 megawatts solar plant in Lawra, which I commissioned. Today, we are here signing-off on this thirteen-megawatt (13MW) addition,” he said. President Akufo-Addo also revealed to the gathering that the construction of another fifteen-megawatt (15MW) plant has already begun, and funding has been duly secured from the German Development Bank (KFW) and is expected to be completed within one year.  In addition, the Kaleo project provides several benefits including, increasing the geographic spread of power generation assets; improving the resilience of the national power system; stabilising voltage levels and reliability of power supply in the Upper West Region; and, ultimately, reducing the nation’s carbon footprint. The President stated that the construction of the new 15MW plant is employing some one hundred and thirty (130) people during the construction phase. “I am glad to note that most of the workers used for some ninety-five per cent (95%) of the construction and operational phase are from the nearby communities. The project will serve as a tourism boost for the Kaleo community, and as a destination for educational and technological field trips in the Region. It will contribute to promoting the advancement of science education, engineering and technological activities in this area, and broaden the career outlook of our young people,” he added. With this project in the community, President Akufo-Addo was expectant that “corporate social responsibility programmes for Kaleo and neighbouring communities will be enhanced by the appropriate authorities in many forms including, but not limited to the rehabilitation of the Kaleo D/A Primary School and the provision of furniture and other critical amenities for the school.”     Source: https://energynewsafrica.com

Ghana: GRIDCo CEO Receives Best Head Of Entity Award

Michael Creg Afful
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Ghana: GRIDCo CEO Receives Best Head Of Entity Award
The Chief Executive Officer of Ghana Grid Company (GRIDCo) has been crowned as the Best Head of Entity at the 2022 Internal Audit Conference held in Accra, the capital of Ghana. The Best Head of Entity Award recognises the role which the Chief Executive played in ensuring that the plans and activities of the Internal Audit Department were supported at all levels to aid the effective operation of GRIDCo’s internal control, risk management and governance processes. Aside from the CEO’s award, GRIDCo also received the Best Enterprise Risk Management Compliant Award at the same event. Commenting on the Award, GRIDCo Board Chairman, Ambassador Kabral Blay-Amihere said, “I commend the Chief Executive for these awards and recognise the role of the Board, Audit Committee, Chief Executive, Internal Audit Department, Risk Management Committee and staff of GRIDCo for their dedication and exemplary work.” He also acknowledged the roles played by members of the immediate past Board, Audit Committee and Chief Executive, Ing Jonathan Amoako-Baah, which helped GRIDCo attain this feat.  “I hope that the Chief Executive and Management will continue to ensure that the policies, procedures, risk management and internal control systems, are followed to sustain and increase GRIDCo’s value. “Let us follow this example of excellence to attain the best for ourselves and GRIDCo,” he charged.         Source: https://energynewsafrica.com

Ghana: GRIDCo Grabs Enterprise Risk Management Compliant Award

Michael Creg Afful
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Ghana: GRIDCo Grabs Enterprise Risk Management Compliant Award
Ghana’s power transmission company, GRIDCo, has been crowned as the Best Enterprise Risk Management Compliant Institution in the Republic of Ghana at the 2022 Internal Audit Conferences and Awards held at the University of Professional Studies in Accra. This is the second time in a row the transmission company has received the award. In 2021, GRIDCo’s Internal Auditor, Mr Richard Ntim, was adjudged the Best Internal Auditor at the Internal Audit Agency Conference. This year’s conference, which was held from 16th and 18th August 2022 was under the theme: ‘Injecting Fiscal Discipline in the Mobilisation and Utilisation of Revenue for Sustainable Development: The Role of Internal Auditors’, brought together auditors from both the public and private sector institutions in the West African nation. GRIDCo operates the National Interconnection Transmission Line which covers about 6,472.23 kilometres. Commenting on the award, the Chairman of GRIDCo Board, Ambassador Kabral Blay-Amihere, congratulated the CEO of GRIDCo, Ing Ebenezer Kofi Essienyi, for providing sound leadership and leading the company to win the award.
Ambassador Kabral Blay-Amihere, GRIDCo Board Chairman
He also congratulated GRIDCo’s Internal Audit Department, Risk Management Committee and staff of GRIDCo for their dedication and exemplary work which brought success. “This is an incredible achievement and a well-deserved recognition of dedication and hard work, which we appreciate,” he heartily said. According to him, the Board, Audit Committee, and the Chief Executive are required to ensure that an effective risk management strategy is in place to help identify, assess and prepare GRIDCo for potential hazards that may interfere with our operations, finances and objectives He explained that GRIDCo has put in place ERM processes to help the company to manage and monitor risks to its operations. “Winning the award for the ERM function is welcome news and a worthy appreciation of the efforts we have all put into the ERM activities,” he noted. He also acknowledged the roles played by members of the immediate past board, Audit Committee and Chief Executive, Ing Jonathan Amoako-Baah, which helped GRIDCo attain this feat.  “I hope that the Chief Executive and Management will continue to ensure that the policies, procedures, risk management and internal control systems, are followed to sustain and increase GRIDCo’s value. “Let us follow this example of excellence to attain the best for ourselves and GRIDCo,” he charged.       Source: https://energynewsafrica.com

Kenya: Fuel Supply Cut Looms As Marketers Demand US$542.3Million Debt

Michael Creg Afful
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Kenya could soon go back to the fuel shortage last witnessed in May if the government of the East African nation does not clear the rising debt owed to suppliers. According to a report filed by Kenya Star, a top official of one of the major oil suppliers in the country has said oil suppliers were considering holding stock pending clearance of almost Sh11 billion (US$91,784,000) they are seeking from the government. “The business is not making sense anymore. Arrears arising from the subsidy plan are unsustainable. We are forced to borrow to sustain operations,” the top official said as quoted by Kenya Star. The top official is said to have added that arrears have been accumulating since June and efforts to follow up on payments were complicated by the recent general elections. “We fear that the transition, following the election of the new government, will worsen the situation to our disadvantage,” he added. On Friday, the Petroleum Outlets Association of Kenya (POAK), a body that brings together all operators in the sector, hinted at supply disruption, indicating that suppliers have run out of funds. “The Petroleum Industry is owed more today than ever…a bill of Sh65 billion (US$542,360,000). This is a sizable percentage of the industry’s market cap and large enough to cause supply disruption,” POAK said in a tweet. The lobby added that suppliers are in extreme dilemma fueled by government transition, product availability and cost.  “Both the National Treasury, the Ministry of Energy and the Energy and Petroleum Regulatory Authority (EPRA) did not respond to our inquiries about the status of the subsidy plan and repayments to suppliers.” The government and fuel suppliers have been in a hot and cold relationship since the introduction of the fuel subsidy plan, leading to a countrywide shortage in April. Delays in the payment of subsidies to the companies by the government pushed up prices in the wholesale market where oil majors resold fuel to the smaller independent fuel retailers who control 40 per cent of the market. This saw the small retailers hesitate to buy the costly fuel, with the increased supply of oil majors unable to plug the deficit. The oil majors are also cautious to increase supply, uncertain about whether the state would compensate them for fuel not used to calculate the monthly price adjustments. Both the government and international bodies like the International Monetary Fund (IMF) have questioned the sustainability of the oil subsidy.     Source: https://energynewsafrica.com

Ghana: VRA Boosts Solar Power Generation With 13MW In Kaleo In Upper West

Michael Creg Afful
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Ghana’s largest state power generation company, Volta River Authority (VRA), will, on Tuesday, August 23, 2022, commission a 13MW peak solar plant in Kaleo in the Upper West Region to boost electricity generation in the West African nation. This will add to the company’s 6.5MW peak at Lawra, 2.5MW solar in Navrongo in Upper East Region and 80kW rooftop solar at its headquarters in Accra. President Akufo-Addo, who is touring the Upper West Region, will commission the project as part of his tour of the region. In 2020, VRA commissioned a 6.5MW peak solar power plant in Lawra in the Upper West Region. Both the Lawra and Kaleo projects were executed by Elecnor S.A. from Spain, with Tractebel Engineering of Germany acting as the Project Consultant. The projects were funded by KfW, a German Development Bank, through a Loan Agreement between the Government of Germany, represented by KfW, and the Government of Ghana, represented by the Ministry of Finance and the VRA for a facility of 22.8 million Euros. The projects would boost VRA’s power generation capacity, reduce VRA’s carbon footprint by increasing non-fossil fuel generation and also stabilise the voltage levels and power supply in the Upper West Region, as well as provide additional power for the consumption of 32,200 households (estimated annual average consumption per household of 976kWh). VRA has set a goal to command, at least, 70 per cent of the renewable space in Ghana in line with its 5-10-year Renewable Energy Development Programme. The move is in line with the Government of Ghana’s policy to promote the development and utilisation of Renewable Energy (RE). “In 2019, the Authority completed its first 80kw rooftop solar at its headquarters in Accra, as part of its culture of working in green and smart environment. “In future, the VRA intends to develop a pilot floating solar project on the Kpong Hydro-electric head pond at Akuse and deploy rooftop solar system in our office and residential facilities at Akosombo, Akuse and Aboadze,” Ing Emmanuel Antwi-Darkwa, CEO of VRA, said as captured in the company’s 2019 Sustainability Report. The VRA is, also, venturing into wind power production and looks forward to developing about 150MW wind power projects to be located in Anloga and West Ada Districts of the Volta and Greater Accra Regions respectively, in the short to medium term. The 2019 Sustainability Report said feasibility studies and the Environmental and Social Impact Assessment Studies had been concluded for the first 76MW Wind Power Project at Anloga, Srogbe and Anyanui in the Volta Region, as well as the second 76.5MW project in Wokumagbe and Goi in the Greater Accra Region.

Ghana: Military Personnel Assisting ECG To Install Prepaid Meters Flog Nuaso Residents

Michael Creg Afful
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Military personnel from the 49 Engineering Regiment of the Ghana Armed Forces who are assisting the staff of ECG to install prepaid meters in Yilo and Manya Krobo Municipalities in the Eastern Region, on Monday, whipped some residents of Nuaso in the Lower Manya Krobo Municipality. According to sources, the attacks on the residents by the military personnel were unprovoked. In a video sighted by energynewsafrica.com, a man believed to be over 50 years said he and others were relaxing in their vicinity when the military approached them and started beating them. He said the military personnel also beat his wife, bruising her hand. Several other residents were also brutalised, with some victims captured in the video with bruises all over their bodies. However, a brief statement from the Tema Regional Public Relations Officer of ECG, Sakyiwaa Mensah, stated otherwise. The statement explained that there was resistance at Nuaso Old Town, where one woman threatened to pour hot oil on the ECG staff and the military personnel. “A crowd started massing around one ECG team. The military was able to snatch a cutlass from one of the crowd massing around the ECG people,” the statement said. The statement noted that there have been reports of constant verbal abuses and attacks on the person doing the installation at Nuaso Old Town. “The team has withdrawn from Nuaso Old Town,” the statement said. ECG condemned these attacks, describing them as unfortunate situations. “We keep calling for peace and calm so we can discharge our duties peacefully,” the statement concluded. The entire Kroboland was disconnected from the national grid for about three weeks, following a series of protests by residents regarding the installation of prepaid meters in the area. After several engagements by stakeholders, led by national security, the power supply was restored last Friday. Source: https://energynewsafrica.com  

AEC Congratulates H.E. Abdirizak Mohamed For His Appointment As Minister Of Petroleum & Mineral Resources Of Somalia

Michael Creg Afful
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The African Energy Chamber (AEC) congratulates H.E. Abdirizak Mohamed for his appointment as Minister of Petroleum and Mineral Resources of the Federal Republic of Somalia. While this role may present challenges, the AEC firmly believes in the capability of H.E. Minister Mohamed as he drives the country into a new era of energy and economic growth. Representing one of the final frontiers for oil and gas exploration globally, Somalia is rich with opportunities across the entire energy spectrum and value chain. Despite its proximity to hydrocarbon-rich countries, exploration has been slow in Somalia owing largely to political instability and the lack of adequate investment. Now, with his appointment, H.E. Mohamed may focus on promoting an enabling environment and accelerating investment in frontier oil and gas activities. Much of the country’s offshore basins have yet to be explored, and with previously attained seismic data revealing high potential prospects, opportunities for establishing the country as a top producer while making high returns on investment are high. In 2022, the country has made steady progress towards stability, owing largely to recent regulatory reforms and political cooperation, and as global demand for African oil and gas increases, Somalia has emerged as a highly attractive investment destination. Under a mandate to position the country as a top hydrocarbon producer, H.E. Abdirizak Mohamed is set to transform the sector while making a strong case for foreign investment and international player participation. Recently, the government has put statutory bodies in place to negotiate oil exploration and production deals, with the new ministry set to use these bodies to drive participation in 2022 and beyond. Oil represents the backbone of most industrialized economies, and yet, Somalia relies predominantly on imports to sustain its economy. To change this trend, creating a viable domestic market in Somalia, H.E. Mohamed will be prioritizing exploration, infrastructure development and regional cooperation. First on the agenda will be the return of global energy majors, specifically including Shell and ExxonMobil, both of which declared force majeure but paid $1.7 million to lease offshore blocks for the next 30 years. The return of these majors will be key for unlocking a new era of hydrocarbon exploration in Somalia. “The AEC would like to commend H.E. Mohamed on his appointment as Minister of Petroleum and Mineral Resources of Somalia. This represents a great accomplishment and the AEC believes that he will take on his new role with drive, innovation and resilience. In 2022, with global market trends constantly fluctuating, and international destinations urgently looking for new oil and gas deposits, unlocking the true potential of Somalia’s hydrocarbon sector will be key, not just for the country itself but the entire continent. The AEC looks forwards to seeing what H.E. Mohamed will accomplish in his new position and offers our support throughout his term,” states NJ Ayuk, Executive Chairman of the AEC. As the former minister, H.E. Abdirashid Mohamed Ahmed, steps down, the AEC would like to extend their congratulations for a job well done. Despite global market and domestic economic challenges, the former minister made progress towards bringing investment back into the country. For that, he must be commended.              

Ghana: We Are Committed To Safe Use Of Nuclear Power—Dr Yamoah

Michael Creg Afful
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Ghana: We Are Committed To Safe Use Of Nuclear Power—Dr Yamoah
The Executive Director for Nuclear Power Ghana (NPG), Dr Stephen Yamoah, has assured Ghanaians that his outfit is committed to strict compliance with the requirements and rules in the safe application of nuclear technology, and the safety of the people and the environment. He said NPG would continue to actively engage and provide information on its activities to industry players, stakeholders and the public in general. Dr. Stephen Yamoah gave the assurance at the opening of the Ghana Industrial Summit and Exhibition organised by the Association of Ghana in Accra. “We believe in cooperation and will sustain our partnership with the industry,” Dr Yamoah told the business community. Nuclear Power Ghana is the entity which will be the owner and operator of the yet-to-be-established first nuclear power plant in the West African nation. The country is about eight years away from boosting its energy generation with the addition of nuclear power. Providing an update on Ghana’s nuclear project at the Ghana Industrial Summit, Dr Yamoah explained that his outfit issued a Request for Information (RFI) to vendor countries through the Ministry of Energy last year and received 15 responses consisting of information on six large reactors and nine Small Modular Reactors (SMRs). He said these responses have been evaluated by the Technical Committee and the report submitted to the Ministry of Energy for Cabinet’s attention. “We are hopeful that the government would decide on the most suitable technology and the Vendor/Strategic partner for Ghana by the end of this year,” Dr Yamoah stated. NPG has also completed the analysis of field and historical data and ranking of the four candidate sites that were identified in Phase 1. According to Dr Yamoah, NPG is currently drafting the Preferred Site Report for submission to the Nuclear Regulatory Authority by the end of the year for review and approval. “As we progress towards the end of our Phase 2, our siting activities will be focused on the preferred site for detailed site characterisation, including physical protection and security assessment, Environmental Impact Assessment (EIA), Emergency Preparedness and Response Plan (EPRP), etc., all of which will lead to another report to the NRA for a construction permit to start construction.” He stressed that NPG continues to make great strides with stakeholders’ engagements, candidate sites communities outreach, local schools involvement and education programmes. He added, “We have also had fruitful engagements with some universities for the nurturing and development of the right human capital for the Nuclear Power Project.” Dr. Yamoah explained that these academic learning institutions will begin Foundational courses for both technical and non-technical persons to support the Nuclear Power Programme / Project. He further said his outfit continues to partner with and equip media professionals with the needed information to accelerate the public social acceptance licence.   Source: https://energynewsafrica.com
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