The South African Wind Energy Association (SAWEA) estimates that South Africa will need to produce roughly 640 wind turbines each year until 2029 to meet the energy goals outlined in the country’s Integrated Resource Plan (IRP) announced last month.
Fortunately, capacity already exists in the country to produce 150 steel wind towers per year as well as related components, according to Marubini Raphulu, CEO of investment group Hulisani, which has an effective 25% shareholding in local wind tower producer GRI Renewable Energies.
In addition, there is capacity to produce concrete towers and introduce new local steel wind tower manufacturers.
Industry players are calling for urgency in procurement to feed new wind energy into the power grid by 2022 given the three-year lead time from procurement to production – an additional 1,600MW of additional wind power capacity will be added to South Africa’s generation mix every year between 2022 and 2030.
“We support this call, as the GRI operational plant is already producing 150 steel wind towers per year with the capacity to produce more. This equates to the towers required to produce 450MW to 750MW of the allocated capacity using 3MW to 5MW wind turbines respectively,” Raphulu said in a report filed by Esi-Africa.com
He added: “The remaining balance can be provided by concrete towers or new steel tower manufacturers. The business managed to keep operating during the delay in the publication of the new IRP and has exported wind towers over the past two years. While we will need to procure additional capacity to meet South Africa’s wind energy goals, we must ensure that local content procurement rules are enforced to ensure that we not only retain but grow employment, develop skills and reduce costs in the longer term.”
Local production creates jobs
Located in Atlantis, Western Cape, GRI opened its wind tower manufacturing plant in 2014, creating over 300 jobs in an area with high unemployment rates and developing specialised skills in the process.
GRI is a significant contributor to the wind industry in South Africa and produces additional components required for wind farms.
Atlantis has been declared a Special Economic Zone, which makes the business more competitive as it prepares to further grow its manufacturing capacity.
South Africa also has an established steel industry which will benefit from higher local consumption of steel.
“The investment has already been made in the manufacturing plant and skills. GRI supports the local industry while exporting world class products and skills. It therefore makes sense to procure as many towers locally as possible instead of importing them,” Raphulu concluded.
Parts of Greater Accra and Eastern Region of the Republic of Ghana, West Africa, are witnessing power outage following a heavy downpour on Sunday evening.
The rains, which started at about 6pm and lasted for an hour, came with thunderstorm and lightning.
Ghana’s Meteorological Service gave a prior warning before the rains set in.
Energynewsaftica.com‘s monitoring team captured comments some persons in the affected areas made on social media.
“Oh Ghana small rains and there is blackout. What’s this?
“Yes, Nungua; there’s black out.
“Yes, Dome, Kwabenya no light.
Same at Labone.
“Pantang junction; there’s black out.
“Ashaiman is in total darkness.
“Light out at Nsawam,” were some of the comments some Ghanaians posted on various social media platforms.
The newly appointed Managing Director of Ghana’s electricity distribution and retail company, Electrical Company of Ghana (ECG), Kwame Agyeman-Budu has assured Ghanaians that he is taking the necessary steps to ensure that the ongoing realignment of staff positions, following the return of PDS workers to ECG, which has resulted in some agitations, does not affect its core mandate.
The ECG MD explained that his outfit is working in collaboration with the Public Utilities Workers Union (PUWU) to ensure customers are not affected.
Information gathered by energynewsafrica.com on Friday indicated that there were agitations among ECG staff due to the ongoing realignment of staff positions.
But in a statement issued and signed by the MD, it said “management wishes to take this opportunity to assure staff, the general public and all stakeholders that, in collaboration with the Public Utilities Workers Union (PUWU), the current situation will not interfere with the core mandate of the Company: To deliver safe, quality and reliable power to our cherished customers.”
Source:www.energynewsafrica.com
Two years ago, U.S. Secretary of Energy Rick Perry attended Africa Oil Week to promote his country’s policies for energy on the continent. This the U.S. Assistant Secretary for Fossil Energy, Steven Winberg, attended to highlight the importance the United States places on fostering relationships with the continent.
The first question on everyone’s lips was how the recent announcement of Secretary Perry’s resignation would affect the U.S. outlook towards Africa. “If you are asking if there is going to be an Africa policy change, the answer is clearly no,” he says. “As you know, Deputy Secretary Brouillette has been nominated by the President, and he will go through the confirmation hearing. But I can tell you that the Secretary and the Deputy Secretary are in lockstep, as is the President, with policies such as Prosper Africa and Power Africa. The objective for the United States is not changing as it relates to Africa.”
Supporting U.S. Businesses in Africa
Winberg points to the fact that Prosper Africa is a cross-government initiative that involved the Department of Energy and the State Department. It is designed to support United States business and energy activities in Africa. “There are 54 countries in the continent of Africa, and we think that there are great opportunities for the United States to bring our technology and our capital to bear, especially in the energy space. I think we also have the opportunity to counter malign actor influence. And finally, and probably most importantly, Prosper Africa provides opportunities for sustainable economic development and economic development with transparency.”
“That is what the United States brings to Africa, and we are pleased to be here. We are pleased to be at this conference to help develop relationships and help develop understanding between the United States and the 54 countries in Africa.”
The strategy is for the U.S. government to work with U.S. companies that want to do business in Africa and to work with countries in Africa that want to do business with U.S. companies. “We can indeed shine a bright light on these opportunities,” Winberg adds. “We can also assist African enterprise and African countries by introducing them to US companies, and vice versa.”
“We also have opportunities for African countries to come over to the United States and work with some of our departments so they can understand how we do business and how we create a transparent business climate. We have 17 National Labs. And we are very open about what those labs do. Numerous countries send representatives to visit those labs so that they can understand the technologies that we are working on and how those technologies might be applicable to their situation. We are going to continue that activity so that we can become a long-term partner with African nations.”
The Global Role for U.S. Gas
Aside from supporting the work of U.S. businesses in Africa, Winberg is clear that he sees Africa as a prime market for the surplus of gas that the U.S. shale revolution is delivering. “I do believe there is going to be increased oil and natural gas production in Africa, but there is an interim period when African countries may want to avail themselves of our LNG exports,” he explains.
At present, the United States has the capacity to export seven billion cubic feet per day, which will grow to ten billion cubic feet per day by 2020. “In operation or under construction, we will have 15.5 billion cubic feet per day today coming online over the next several years. The Department of Energy has authorised about 35 billion cubic feet a day,” Winberg adds. “There is a lot of headroom there for countries that want to use LNG imports in the interim period while they are developing their own natural gas production.”
According to Winberg, the U.S. shale surplus offers another benefit: stabilising the market and providing security of supply. “About two and a half months ago, the Straits of Hormuz saw some hostile activity,” he says. “If you watched the Brent Crude oil price, it barely moved in and around that hostility.”
“Then on September 14, the Iranians attacked Saudi Arabia – the attack initially took out half of their production. That happened on Saturday; and on Monday when the European markets closed Brent crude was up 9 dollars and within two weeks Brent closed below pre-attack levels. That speaks volumes about the robust nature of this oil and gas market. If that attack had occurred a decade ago, we would have seen a fly up in oil prices, and I think they would have stayed up.”
“The fact that we continue to increase the level of oil that we’re producing in the United States and will be a net exporter of energy next year, reduces the impact that those types of attacks can have. And if it’s not as impactful as those perpetrators want it to be, then there’s not a lot of value. And I think that’s the real message here.”
Fighting Climate Change outside the Paris Climate Accord
Much has been made about the United States stepping away from the Paris Climate Accord, but Winberg is clear that does not mean that the U.S. is not serious about reducing carbon emissions. “The answer to reducing greenhouse gas emissions, whether it’s methane or CO2, is through technology development,” he explains. “The International Energy Agency (IEA) understands that and talks a lot about the need for carbon capture technology.”
“If you do the math, you know that without technologies such as carbon capture, utilization and storage, none of the countries can meet any of the goals that they aspire to meet. It all comes down to technology. One thing that President Trump and the Administration are adamant about is having an “all of the above” strategy in the United States. I know there are countries that want to eliminate fossil fuel from their energy mix. We do not think that is a wise decision. We think it is wise to develop technology to reduce the environmental impact of those fossil fuels, whether coal, oil or natural gas.”
“Under just about every forecast, and IEA is probably the most influential, 80 per cent of our energy needs globally will be coming from fossil fuels for the next 30 to 40 years. So, eliminating fossil energy is not practical. What is practical, is developing technologies to reduce greenhouse gas emissions and create more efficient, as well as designing a less environmentally impactful use of energy.”
Working with Africa to Deliver Growth
As for foreign policy in Africa, Winberg is clear that the Trump Administration believes that it is up to African countries to resolve whatever internal issues they have. “It is not our role to tell countries what to do,” he concludes. “However, what we can do and what we offer is an opportunity to talk to us about policies that will attract capital and policies that will attract technological investments. We will continue doing that for countries that want to develop their natural resources.”
“That has been a focus of this Administration. I said earlier that the Trump administration absolutely believes in the “all of the above” energy strategy. We want to export our technology and our natural resources. We will do everything we can to work with countries that want to avail themselves of what we have to offer, including working with them on various policy issues that they need to resolve to attract capital and attract technology.”
Ghana’s electricity regulator, Energy Commission, has put in place the necessary regulatory measures and licensing framework needed to guide companies that want to engage in a commercial activity in the renewable energy space.
This, according to the Energy Commission’s Executive Secretary, Rev. Oscar Amonoo-Neizer, is in accordance to the Renewable Energy Act, 2011 (Act 832).
The Energy Commission boss made these observations in a speech delivered on his behalf during a workshop on IEEE 1547TM and the IEEE 1547 Conformity Assessment Programme at the Electricity Company of Ghana’s (ECG) Training School in Tema.
He announced that the Commission is currently updating the Electricity Distribution Code and National Electricity Grid Code to include Renewable Energy.
Ing Amonoo-Neizer was of the view that the inclusion of Renewable Energy in these codes would improve the implementation and usage of renewable energy in the country.
“The Energy Commission is very proud to support this workshop and to see the growth of renewable energy in Ghana. We are committed to engaging all stakeholders to develop and implement such workshops.”
Ing. Amonoo-Neizer noted that the IEEE 1547 and IEEE Conformity Assessment Programme (ICAP) certification programme would be crucial tools in Ghana’s ongoing adoption of distributed energy resources (DERs).
“It’s extremely challenging for the world’s policy makers to simultaneously keep on top of today’s dramatically changing technical landscape, anticipate tomorrow’s innovations and wisely evolve policies and regulations,” he observed.
He, therefore, described open consensus standards such as the IEEE 1547 as an indispensable connection fabric between the world’s technology and policy developers.
He explained that the ICAP certification process provides a singularly dependable and proven process for assuring IEEE 1547 commissioning compliance implementation and interconnection of DERs of any type or size.
He thanked the IEEE team for organising the workshop and further encouraged participants to take full advantage and learn effectively.
Italian oil and gas firm, ENI, has rejected assertions by Ghanaian employees that they are being treated unfairly and paid far below their colleague expatriates.
According to ENI, operators of the largest integrated gas field in the West African country, Ghana, in all the 67 countries it operates throughout the world, it undertakes activities according to the highest international standards and best practices in accordance with local laws, within the parameters set out by competent authorities, agencies and local regulatory frameworks.
The oil and gas firm expressed shock over the development which it described as very unfortunate.
“Wherever we work, ENI promotes international labour standards through regulatory documentation, trade union agreements at the national and international level, management and development processes and training and communication initiatives,” a statement the company issued and copied to energynewsafrica.com clarified.
The statement noted that in 2008, ENI drew up a Code of Ethics which makes “explicit reference to workers’ rights and the freedom of trade unions, as well as the fight against all forms of discrimination, forced and child labour.”
The statement was in response to a petition the Eni workers, through the General Transport Petroleum and Chemical Workers Union(GTPCWU) of Trades Union Congress, submitted to Ghana’s upstream regulator petroleum commission for actions to be taken against the company.
“It is extremely sad and disheartening to note that the Ghanaian workers of Eni are woefully underpaid compared to their expatriate colleagues on the same job in the same company, as well as competitors in the industry such as Tullow and Aker.
“This is in clear violation of Eni’s own global policy on compensation and benefits that states that: ‘Our compensation package is complemented by a benefits programme in line with our competitors and consistent with local regulations. It aims at to enhance overall compensation with benefits which support our people’s current and long term physical and financial welfare’.”
Due to the relatively low salary of the Ghanaian employees of Eni Ghana, some of the experienced employees have resigned to other competitors in the industries, which has adversely affected the localisation policy which is being championed by the Petroleum Commission of the Ghana.
“We believe this does not augur well for the young petroleum industry in Ghana to train and develop competent and experience Ghanaian workforce to take over the management of the resources in the near future.”
Given the average monthly revenue (inflow) of US$123 million, which Eni Ghana and its partners have been achieving during the period January to September 2019, the total monthly labour cost estimate of our proposal for Eni to pay at least 75 percent of the oil and gas market constitute only 0.5545 percent of this revenue value.
“Thus, the total labour cost estimate of this proposal is less than 0.9%, if we are to include other contract workers. Moreover, Eni Ghana will bear only 44.444% of this cost while the rest is cut back to partners (Vitol and GNPC),” parts of the petition signed by the Deputy General Secretary of GTPCWU Francis Sallah stated.
But Eni has denied these claims.
The company also rejected claims of the workers that they are breaching the country’s local content laws.
“More than 75% of Eni Ghana’s workforce is Ghanaian, which is well above the target set by Ghana’s local content regulations (L.I. 2204 regulations 1(c), 18).
In full compliance with the Local Content regulations, Eni Ghana has personalised development plan for every single local resource, and localisation plans for all expatriate positions. The plan is shared on a quarterly basis with Petroleum Commission to monitor its progress. In addition, more than 1 Million USD is invested yearly on training alone for the professional growth of the Ghanaian resources. Performance appraisals are conducted at least once a year.”
Below is the full response from Eni
Global operating principles
Wherever it operates – and that is 67 countries throughout the world – Eni undertakes its activities according to the highest international standards and best practices, in accordance with local laws, within the parameters set out by competent authorities, agencies and local regulatory frameworks.
In all the contexts in which we work, Eni promotes international labour standards through regulatory documentation, trade union agreements at national and international level, management and development processes, training and communication initiatives. In 2008, Eni drew up a Code of Ethics, which makes explicit reference to workers’ rights and the freedom of trade unions, as well as the “fight against all forms of discrimination, forced and child labour”.
Our policies promote the creation of a work environment in which diversities of any nature are enhanced through a Diversity & Inclusion system in which equal opportunities are offered to all, promoting the creation of an inclusive work environment without distinction of race, color, gender, religion, nationality, political opinion, sexual orientation, social status, age or any other condition of the individual not related to the requirements necessary for the execution of the work.
Allegations of racism and slavery are extremely serious and have never been made to the company. If employees or Unions have evidence of such, they should share their evidences so as to allow the company to immediately investigate such claims and take the appropriate measures. Otherwise, if such claims are unsubstantiated, Eni reserves the right to prosecute false allegations that can damage the company’s reputation.
Local content
More than 75% of Eni Ghana’s workforce is Ghanaian, which is well above the target set by Ghana’s local content regulations (L.I. 2204 regulations 1(c), 18).
In full compliance with the Local Content regulations, Eni Ghana has personalized development plan for every single local resource, and localization plans for all expatriate positions. The plan is shared on a quarterly basis with Petroleum Commission to monitor its progress. In addition, more than 1 Million USD is invested yearly on training alone for the professional growth of the Ghanaian resources. Performance appraisals are conducted at least once a year.
Union negotiations
Negotiations between Eni Ghana and the Union representative on a salary structure ended with a satisfactory agreement for both parties. Confidentiality of the negotiation and its ouputs, which is in the best interest of both parties, prevents us from disclosing further information
A lawyer for US oil and gas giant, ExxonMobil, Theodore Wells, says New York’s fraud lawsuit against the oil giant was a “joke” and that the state had falsely accused engineers and scientists of cooking up a scheme to mislead investors about the financial risks of climate change.
“It’s a cruel joke, your honor, because the reputations of a lot of good people have been disparaged by the bringing of this complaint,” Worldoil.com quoted Theodore Wells as saying during his closing statement after a trial that spanned three weeks.
New York sued Irving, Texas-based ExxonMobil in 2018 after a three-year probe, claiming it found evidence that the company sought to trick investors into thinking the company was planning properly for a low-carbon future and inflating its stock by as much as $1.6 billion starting in 2014.
But Wells said the state failed to prove that ExxonMobil made a material misstatement when it revealed to activist investors in 2014 that it was using a “proxy cost” to account for the future impact of climate change on the business. New York failed to prove the claims led to a drop in the company’s stock, he said.
There was “no impact on the price of the company’s stock,” Wells said. “What that shows is that nothing happened and that nobody cared. And the reason nobody cared is because nothing happened.”
Justice Barry Ostrager, of the New York State court in Manhattan, will decide the case without a jury.
Among more than a dozen witnesses who testified were activist investors who accused ExxonMobil of misleading them, ExxonMobil employees who defended the company’s practices, and expert witnesses who dueled over whether the allegations had any impact on the company’s shares.
The case hinges on whether ExxonMobil’s proxy cost — meant to account for the expected decrease in demand for fossil fuels — was supposed to be the same as another internal metric Exxon used, a greenhouse gas (GHG) cost applied to specific project proposals based on existing local taxes. Exxon says the state is trying to show a false discrepancy by conflating two carbon metrics that serve different purposes.
The former Deputy Managing Director of Ghana’s electricity distribution and retail company, Electricity Company of Ghana, Mr. Kwame Agyemang Budu, has been officially sworn in as the Managing Director of ECG.
Energynewsafrica.com understands Mr. Kwame Agyeman-Budu was sworn in by Ghana’s Energy Minister John-Peter Amewu at a brief ceremony on Thursday at ECG’s head office in Accra, capital of Ghana.
The ceremony was witnessed by the company’s Board of Directors.
Mr. Agyeman-Budu was appointed following a letter signed by Mr Lawrence Apaalse, Chief Director of the Ministry of Energy, which announced government’s decision to terminate the appointment of managing director of ECG,Ing. Samuel Boakye-Appiah.
Mr. Agyeman-Budu has a rich industry experience spanning about 28 years.
Mr. Agyeman-Budu undertook his primary and secondary education in Kumasi. He pursued a professional teacher’s certificate at the Wesley College also in Kumasi.
He continued his education in the US where he attained both professional and academic qualifications. Among them Certificate in Facilities Management, Associate Degree in Applied Science Electrical Engineering Technology, Bachelors and ultimately a Masters in Energy Management from the New York Institute of Technology.
He has since managed several projects, including projects at Consolidated Edison Company (ConEdison) of New York, the largest utility company in the US which serves over 1 million natural gas consumers.
A prominent project he managed is a $15 million Tension Gateway Project (GEP) at LaGuardia Airport
Agyeman-Budu’s years of experience in the energy industry spans areas of Distributed Generation (Combined Heat & Power – CHP), Solar (Photovoltaic), Advanced Battery, Windmill, and Fuel Cell Technologies, Alternate Energy, Environmental Audits and Monitoring, Environmental Risk Assessment, Power Plant Systems, Smart Grid Systems, and Systems Engineering and Management.
Several African countries have used the Africa Oil Week (AOW) event in Cape Town this week to promote their oil and gas sectors to a global audience of investors, suppliers and other key stakeholders.
Senegal’s Oil and Energy Minister Mahamadou Makhtar Cisse used the platform to launch, for the first time in the history of petroleum exploration in his country, a licensing round of three blocks of sediment basin.
The licensing round would be promoted at international oil conferences in London, Houston, and Dakar during a first phase of the process, while energy companies would be able to evaluate the blocks’ potential between the end of January and end of July 2020, the minister said.
Senegal has seen predominantly natural gas discoveries offshore in recent years, most of which are shared with neighbouring Mauritania.
Angola’s newly formed national oil, gas and biofuels agency, ANGP, announced that the country has formed a consortium with five international oil companies, including Eni and Chevron, to develop liquefied natural gas (LNG) for its Soyo plant.
The consortium’s project, costing an initial $2 billion, is expected to start production by 2022.
Uganda’s Minister of Energy and Mineral Development, Irene Muloni, is leading a delegation of private and public sector players from Uganda’s oil and gas sector at AOW.
Over the course of the week, in a National Showcase, Uganda is highlighting the ongoing second licensing round for oil exploration, which covers five highly prospective blocks with relatively good seismic and other data, Minister Muloni said.
Ghana told AOW delegates that it plans, revising its laws on oil and gas licenses, sent to parliament last week, are an effort to spur production, and will revoke licenses from four companies that have not developed their assets.
Deputy Minister for Petroleum Mohammed Amin Adam said that the proposed changes would allow companies producing in blocks to explore elsewhere in the same area without having to get a new license.
Equatorial Guinea’s Oil Minister, Obiang Lima, said that his country would award seven to eight blocks from its current licensing round at the end of November.
A data room for companies interested in the Zafiro oilfield license would be opened as soon as possible Minister Lima said.
Chairman of Mozambique’s upstream regulator, INP, Carlos Zacarias announced that the country’s long-awaited sixth licensing round is due to be launched early next year.
INP, Zacarias said, is currently working out which acreage to offer industry and will then submit its proposal to government for approval.
Somalian Minister of Petroleum and Mineral Resources Abdirashid Mohamed Ahmed said his country was embarked on a path to transform Somalia’s petroleum industry and attract the attention of new investors, with significant progress having been made in recent years.
The passing of the petroleum law earlier this year – key features of which were a commitment to transparency and revenue-sharing, the Minister said.
The first example of this commitment, albeit small, was receipt of US$1.7million in rental payments from Exxon and Shell.
The Comptroller General of Customs, Hameed Ali, has suspended the supply of fuel (diesel and petrol) to filling stations within 20 kilometres to all Nigerian borders.
He gave this directive to all commands through Chidi A, the Deputy Comptroller General, Enforcement, Inspection, and Investigation on Wednesday in Abuja.
The circular, dated November 6, 2019, titled, ‘EII/2019/Circular No. 027 Suspension of Petroleum Products Supply To Filling Stations Within 20 Kilometers To All Borders’, addressed to “all zonal coordinators, operation swift response, sector coordinator 1,2,3 & 4, customs area controllers, coordinators CGC strike force teams, coordinator, headquarters strike force teams and all marine commands, said,
“The comptroller general of Customs has directed that henceforth no petroleum products no matter the tank size is permitted to be discharged in any filling station within 20 kilometers to the border.
“Consequently, you are to ensure strict and immediate compliance please.”
It not clear why Mr Hameed Ali has issued such a directive.
Oil major BP has started drilling at the Puma West prospect the Green Canyon Block of the U.S. Gulf of Mexico.
The news of the spud was shared Wednesday by the U.S. oil company Talos Energy, from which BP took over the operatorship of the project in September.
“The Puma West well is being drilled by the Seadrill West Auriga ultra-deepwater drillship and was spud in October, targeting Miocene sands similar to those seen in the Mad Dog development located less than 15 miles away,” Talos said in an update.
As previously reported, Talos in September signed a deal with BP for the oil major to take operatorship of Talos’ Green Canyon Block 821 containing the Puma West prospect, and to drill the well.
At the time of the announcement, Talos said it would retain 25 percent, with BP holding the remaining stake. The ownership structure seems to have changed to include Chevron since the original announcement, as Talos on Wednesday said BP “is the operator of the prospect holding a 50% working interest, Talos retained a 25% working interest, and Chevron now also has a 25% working interest.”
Talos in September said that, while the Puma West had not been in its original drilling plan, “by moving quickly the company is able to work with a world-class operator in a potentially significant subsea tie-back project located on Talos acreage.”
BP’s Argos platform will be the first new BP-operated production facility in the Gulf of Mexico since 2008 when Thunder Horse came online. It will be BP’s fifth operated platform in the Gulf of Mexico and it will help extend the life of the super-giant Mad Dog oil field beyond 2050.
The hull and topsides of the Argos platform are currently under construction in South Korea, with oil production from the facility expected to begin in late 2021.
Ghana’s Energy Commission and Electricity Company of Ghana, in collaboration with the Institute of Electrical and Electronic Engineers SA(IEEE), have organised a workshop for regulators and Distributed Energy Resources (DER) stakeholders on the IEEE 1547™ standard and the IEEE 1547 Conformity Assessment Programme.
IEEE 1547-2018, IEEE Standard for Interconnection and Interoperability of Distributed Energy Resources (DER) with Associated Electric Power Systems Interfaces, is a widely adopted standard providing utilities, DER developers, regulators, service companies and equipment manufacturers, a uniform-set of consensus-based requirements for grid interconnection of DERs of any type and size.
IEEE 1547 has informed federal legislation and rule making, regulatory deliberations and critical utility engineering and business practices for DER interconnection in markets worldwide.
In a brief remark, Executive Secretary of Energy Commission, Ing. Oscar Amonoo-Neizer said: “IEEE 1547 and the IEEE Conformity Assessment Program (ICAP) certification programme will be crucial tools in Ghana’s ongoing adoption of distributed energy resources (DERs).
“It’s extremely challenging for the world’s policy makers to simultaneously keep on top of today’s dramatically changing technical landscape, anticipate tomorrow’s innovations and wisely evolve policies and regulations. Open, consensus standards such as IEEE 1547 are an indispensable connection fabric between the world’s technology and policy developers, and the ICAP certification process provides a singularly dependable and proven process for assuring IEEE 1547 commissioning compliance across implementation and interconnection of DERs of any type or size.”
On his part, Adam Newman, IEEE Senior Director of new business development and operations and IEEE Industry Standards and Technology (ISTO) Executive Relationship Manager, said: “It’s not uncommon for DER stakeholders around the world to take drastically different approaches to meeting requirements for commissioning in IEEE 1547. Given the rapid rise of varied renewable deployments around the world, the ICAP certification programme for IEEE 1547 commissioning is an increasingly valuable resource to utilities, DER developers, regulators, service companies and equipment manufacturers globally.”
Earlier this week, grid interconnection of a 20-Megawatt DER site in Winneba, Ghana, was demonstrated per the requirements of the IEEE 1547 standard and the IEEE 1547 Conformity Assessment Programme commissioning process. The pilot demonstration provided insights into how commissioning to IEEE 1547 should be undertaken and how non-conformances can be best resolved.
By: Raymond Nuworkpor.
Government of Ghana in August 2014 executed the second Millennium Challenge Compact with the U.S government with the objective of providing assistance of up to Four Hundred and Ninety-Eight Million Two Hundred Thousand United States Dollars (US$498,200,000) to the Government for a program to reduce poverty through economic growth in Ghana (increasing private sector investment and the productivity and profitability of micro, small, medium and large scale businesses.)
To effectively execute and implement the project, an act of parliament established MiDA (Millennium Development Authority, Act 702, 709, & 897 as amended).
The objectives of the Authority are: To oversee, manage and implement the programmes under the Millennium Challenge Account for poverty reduction, through economic growth as set out in each agreement between the Government of Ghana and the Millennium Challenge Corporation acting for and on behalf of the Government of the United States of America and for any other national development programme of similar nature funded by the Government of Ghana, a development partner or both and provide for related matters.
Government designated MiDA (Millennium Development Authority), as its primary agent to exercise and perform the right and responsibility of overseeing, managing and implementing the Program, including without limitation allocating resources and managing procurements.
Among the six projects within the Second Compact is the ECG Financial & Operational Turnaround Project (EFOT) which seeks to introduce a private sector participant in the management & operation of ECG. Consequently, governments under the auspices of MiDA embarked upon competitive procurement process which resulted in the selection of an acceptable partner to manage, operate and invest in ECG’s operations for 20years.
Manila Electric Co. (Meralco) led consortium was declared the winning bidder in April, 2018. Meralco has partnered AEnergia SA, an Angolan Company, and three Ghanaian Companies. The shareholding: Miralco = 30%; AEnergia = 19%; Three Ghanaian Companies (TG Energy Solutions Ghana Ltd, Santa Power Limited & GTS Power Limited) = 51%.
Author
Power Distribution Services Ghana Ltd (PDS) took-over the Electricity Company of Ghana (ECG) in March 2019 based on a July 3rd 2018 Lease and Assignment Agreement (LAA) and Bulk Supply Agreement (BSA) between the two entities as part of the Private Sector Participation (PSP) in ECG under the Ghana Power Compact of the Millennium Challenge Account (MCA)
PDS was primarily expected to sell & distribute power/electricity to customers in the Southern Zone while ECG will serve as a Bulk Purchaser of electricity from V.R.A and other power producers.
There were notable variations in the new agreement relative to the one signed in August 2014, i.e. a) Change in the structure of the shareholding from the initial 80%:20% to 49%:51%;
b) Waiving away of some ‘Conditions Precedent’ before the takeover to ‘Condition Subsequent”
c) Changing of the bank demand guarantee to demand insurance guarantee.
On July 30, 2019, the Government of Ghana through the Ministry of Finance and the Electricity Company of Ghana (ECG) Ltd suspended the concession agreement with Power Distribution Services (PDS) Ghana Limited due to fundamental and material breaches of PDS’s obligation in the provision of Payment Securities (Demand Guarantee) for the transaction which have been discovered upon further due diligence.
“We have through deep intelligence detected that they have issues with those guarantees that were provided… they were not valid and as a step, we have taken measure to secure the assets of the state by suspending the concession agreement,” Information Minister, Kojo Oppong Nkrumah told Evans Mensah on Joy News’ PM Express
It must be stated clearly that PDS from inception failed to satisfy all ‘Condition Precedent’ among other things, a documented Lease Payment Security (LSP) and BSA Payment Security in the form of Letters of Credit (LC) issued by a qualified bank as spelt out in the LAA and the BSA as proof of capitalization
PDS which was expected to inject about $580million into ECG in the first five years of its operation failed to demonstrate capitalization for even the first year of their operation. PDS had instead proposed to MiDA/ECG (against the terms of the LAA and the BSA) to use Insurance Companies with reinsured guarantees serving as ‘qualified banks’ to help them raise the LC, which they were unable to meet.
It has been noted that whereas Meralco was required to prove their financial and technical capability beyond all reasonable doubt which they did, the 51 percent Ghanaian ownership (TG Energy Solutions Ghana Ltd, Santa Power Ltd, GTS Power Ltd,) as part of the consortium were not financially and technically sound enough to partake in the deal leading to challenge in providing a bank statement of actual receipt of equity contributions accompanied by certifications from PDS Ghana on its outstanding shares and paid-up capital by shareholders.
A letter, dated 18th October 2019, under the signature of the Finance Minister, Ken Ofori-Atta titled “Termination of Power Distribution Services (PDS) Concession” indicated the termination of the PDS deal “the current concession had to be terminated in view of the facts uncovered regarding the failure by PDS to satisfy conditions precedent under the relevant transaction documents AND, however, that every effort would be employed to ensure a suitable replacement within the relevant timelines in order to complete the compact. The Government decision to terminate the PDS concession and find a replacement in a timely manner to successfully conclude the compact…”
It has become evidently clear that the Millennium Development Authority (MiDA), the supervising agency of the Millennium Challenge Compact (MCC), which embarked upon a competitive procurement process resulting in the selection of Manila Electric Co. (Meralco), and the group of Ghanaian investors to manage, operate and invest in ECG’s operations for 20years, was negligent in the award of the concession agreement as it failed to do adequate due diligence, resulting in the botched deal.
It has also been proven that apart from Meralco, the other parties in the consortium were not known to have both technical and financial capacity to assume the business with the cash flow of close to US$4billion; failing to inject private capital into the operations of the ECG as required. And to the extent that local shareholders of PDS used proceeds of ECG to fund US$11.5million of the US$12.5million payments it made to procure the demand guarantees.
All information gathered about the purported Demand Guarantees provided by PDS as security for the transfer. The Government of Ghana (GoG) is concluding that there is no valid payment security, and that it’s unable to consider that a valid and enforceable payment security was furnished by PDS in fulfilment of an essential Condition Precedent for the transfer of ECG’s asset to PDS.
In a press release dated, October 22, 2019, “The United States of America notes this decision with regret. Based upon the conclusions of the independent forensic investigation, the U.S position is that the transfer of operations, maintenance, and management of the South Distribution Network to the private concessionaire on March 1, 2019, was valid, and therefore the termination is unwarranted. As such, MCC has confirmed that the $190 million funds granted to Ghana at the March 1 transfer to the 20year concession from ECG to PDS is no longer available.”
With Energy Commission restoring license to ECG to distribute and retail power etc, and MCC & MiDA out of sight, government must in the coming weeks inform the citizenry of it next course of action. But before such an announcement on the type of private sector participation government will undertake, government must honor its debt obligation to ECG. The energy sector is suffering from severe financial distress. The financial distress chain ends with government. Ghana Gas owes GNPC because VRA is unable to pay Ghana Gas because ECG is not able to pay for the power VRA generate that is as result of government inability to honor the debt obligations of ECG.
There is no doubt that ECG needs an urgent recapitalization and competent technical management team. Concession is the most ideal route for Government of Ghana to take, however, government must be transparent and willing to accept constructive criticism in this new process. A concession would bring maximum return to government, including but not limited to the responsibility of funding all new investments as well as maintaining all existing assets. There is also an argument to be made for budget certainty since the concessionaire will be responsible for financing capital expenses and operating expenses. We can also articulate the issue of risk transfer etc.
Government of Ghana must consider both public and private institutional arrangement for the recapitalization of ECG. SSNIT can be a public institutional investor while GoG looks at encouraging the tier 2 and tier 3 pension scheme providers (i.e. the Petra Trust Co. Ltd, United Pensions Trustees Ltd, Universal Pensions Master Trust Limited) as the private sector institutional investor. There can be a special provision for a local consortium to join. There must be a consideration for a foreign investor participation but limited to management and technical operation. Example: Public Institutional Investor = 30%, Private Institutional Investor = 50, Foreign Investor = 25% (their selection should be considered primarily on their managerial competent, technical operatorship and proven track record in the industry) and Consortium of Politically Nonexposed Ghanaians = 5%.
GoG must be willing to give incentives especially to the private institutional investors, give them some tax breaks and concession after all GoG is noted for giving very ridiculous incentives to foreign investors. Give these incentives to the private institutional investors, which you are assured of majority of their revenue retaining in the economy.
Finally government must stay off ECG, enough of the political interference. One lesson from the botched PDS deal is that ECG has competent management team that can deliver results if they are given a free role without any political interference. It was the due diligence and the consistent and the persistent manner in which ECG decided to verify the reinsurance guarantee allegedly provided by Alkoot, that uncovered the misrepresentation and fraud detected in the insurance guarantee.
In addition, in the botched PDS Deal, ECG was almost as a spectator in the whole PSP transaction, they were sometimes compelled to act while political appointees take the major decision. ECG must take full control of the next PSP transaction, offering it competence and expert opinions.
(The writer is a Research & Policy Analyst at Institute for Energy Security)
The newly appointed Managing Director of Ghana’s Bulk Oil Storage & Transportation Company Limited (BOST), Edwin A. Provencal has called on government to approve the implementation of the adjusted BOST margin levy of three Ghana pesewas (GH¢0.03) per litre to six pesewas (GH¢0.06) to ensure efficient running of the organization.
“The current BOST margin of GH¢0.03, was implemented in 2011 and has not been adjusted since then even though parliament has ratified that it should be increased to GH¢0.06 in 2017. Meanwhile the company needs more revenue to bring in more products, build infrastructure and trade, among others,” he said in an interview with the B&FT.
Mr. Provencal expressed among others that he is dedicated to transforming BOST into a dividend paying organization but to be able to do that requires heavy investment in infrastructure and to generate the needed revenue to do that requires that the BOST margin be increased.
“Our vision is to be the best in storage and transportation in terms of revenue market share which means that we are to have the best storage and transportation infrastructure to transport the products throughout the country cost effectively.
“We are also going to be aggressively export-oriented because the kind of product we want to bring to the country, the market capacity of Ghana cannot take all which means that we have to leverage on our asset in Bolgatanga positioned for export to transport products to the neighboring land lock countries such as Burkina Faso, Mali, Benin, Niger among others,” he said.
He added that the motive is to be able to generate enough Internally Generated Fund (IGF) to enable BOST to pay dividend to the shareholder which is the country as well as promote the provision of affordable energy to reduce the cost of electricity in the near future.
BOST is currently not able to fulfill its mandate due to its inability to bring in petroleum products at a competitive price that will enable it to control and influence the market price.
The company has 51 petroleum storage tanks across the country, out of which 15 have been decommissioned as a result of malfunctioning components and also 86 kilometers (km) out of its 361km of pipeline infrastructure is inactive.
Furthermore, Mr. Provencal indicated that to turn BOST around requires an investment of about US$150million out of which US$65million will be invested into infrastructure only. The return in infrastructure investment only he said will lead to doubling of depot revenue from US$10.2million to US$20.4million, increase in pipeline revenue and barge revenue, as well as increase in trading revenue from US$55million to US$785million.
The critical role BOST plays as a national security asset and the immense revenue that the state will accrue when it is operating at full capacity requires that the new margin be implemented and also restructured to be able to adjust with inflation automatically to ensure that the value is maintain. This is because pegging the current GH¢0.03 BOST margin with inflation since 2011 when it was implemented means that the value of it stands at GH¢0.01.
Source:www.energynewsafrica.com
