Power Crisis In Ghana: The Past, Present And The Way Forward

By: Mudasiru Mahama

On Sunday 7th of March 2021 when Ghanaians were still celebrating the 64th anniversary of independence, the country experienced a sudden total power shutdown throughout the country. This prompted the Ghana Grid Company (GRIDCo), the sole transmission company in Ghana to immediately release a press statement informing Ghanaians of the challenges it is facing.

Part of the statement read “a challenge in the power system led to total system shutdown leading to an interruption in the power to all parts of the country”. A challenge they could not immediately ascertain the cause of the unfortunate total system shutdown in the country.

However, on the 8th of March 2021 GRIDCo released another press statement this time around to explain to the public the cause of the system shut down on the 7th. It indicated that “a technical fault on one of the major transmission lines between Prestea and Obuasi which led to an overload on other adjacent transmission lines, leading to a sequence of trips and an eventual power system shutdown in the country”.

The transmission Company assured Ghanaians that whiles they are working on the challenges; there are enough generating capacities to meet the demands of the country and therefore no need to worry about. It is unfortunate for this occurrence, and it tells us how vulnerable our grid is. This is a security threat for a fault to shut down the entire country and steps need to be taken to build a more robust system to withstand unexpected shutdowns.

In the light of this assurance, some parts of the country continue to experience power outages. It is worthy to note that before these interruptions in the power system, the country has in recent times been experiencing some power interruptions frequently, an issue GRIDCo attributed to being the closure of an emergency valve at the West Africa Gas Pipeline Company (WAPCo) cutting off the gas supply to some generating plants in the country. These and a series of power outages have left Ghanaians thinking if ‘Dumsor’ (a local term for frequent power outages) has been returned like we have seen in the past especially between 2012 and 2016 when it was coined? If not, what is the cause of the recent power outages? Perhaps if the challenges are beyond the reach of the utility companies, they need to develop a power shedding. This will be necessary to respond to unplanned events to protect the power system from a total shutdown.

We might be closed to the 2013 -2015 experiences, but we are not there yet due to the differences in circumstances between now and then. The power outages of the past had critical issues beyond the control of the utility companies and the Government and were very difficult to avert immediately. Critical among the past challenges were; drastic fall in the water levels of hydro dams leading to low generation from hydropower plants, high indebtedness to Nigeria which was the major gas supplier through WAGP, inadequate power generating plants, indebtedness of the utility companies and government to power suppliers, obsolete transmission and distribution infrastructure leading to technical and commercial losses, managerial challenges, etc. The first three challenges are currently no major issues in Ghana as the country has overcome them in one way or the other. Water levels to power hydro turbines are high now, there is a drastic reduction in reliance on gas from Nigeria as a result of local gas production, the inadequate power generating plants have been resolved through Power Purchase Agreements (PPAs) with Independent Power Producers (IPPs) in the heat of the power crisis of 2012-2016 by the previous government.

The challenges in the sector saw power schedule from about 24 hours with light and 12 hours without light to 12 hours with light and 24 hours without light. The Institute of Statistical, Social and Economic Research (ISSER) estimated that between 2012 and 2015 power outages caused small and medium manufacturing firms to lose about GHS250 million with firms losing about 12% of their output monthly.

Is the power situation now the same as in the past? No!. In the year 2000, the total installed power capacity was 1,652MW of which 1,358MW was dependable and a peak load of 1,161MW. The peak demand of dependable capacity was about 85.5%. In 2014, the total installed capacity increased to 2,831MW which was the same as in 2013. Dependable capacity was 2,569MW and a peak load of 1,970MW. Thus, a 76.7% of the dependable capacity. In 2019, installed capacity stood at 5,172MW with a dependable capacity of 4,695MW and a peak load of 2,881 translating to 61.4% of dependable capacity. Installed capacity in 2020 was 5,204.5MW with a peak demand of 2,881.60MW as of October 2020.

There is a clear indication that the country now has enough generating plants available for power generation. Whereas, the country has seen a 102.6% increase in installed generation capacity between 2014 and 2020, peak demand only increased by 46.2% for the same period. The drastic increase in installed capacity can be associated with the signing of PPAs to bring onboard emergency power plants in the heat of the power crisis in 2012-2016. This has led to power stability that has been witnessed from late 2016 to now.

However, some PPAs signed at that time on “take or pay” contractual agreement is putting a financial burden on state-owned utility companies and the government as it is estimated that about $500 million is paid to IPPs on unconsumed power due to existing agreements.

Also, Ghana which used to rely heavily on hydropower generation has shifted more to thermal power plants. Hydropower generation dependence in 2000, 2014 and 2019 was 91.5%, 64.7% and 39.9% respectively in the generation mix. It, therefore, means seasonal variation in the volume of hydro dams had serious replications on the power generation system. Higher levels of the dam mean enough water for power generation and vice versa. The Akosombo dam which has an installed capacity of 1,020 MW requires a minimum level of 240 ft and a maximum of 278 ft to operate efficiently.

However, in 2014 the monthly average water level in Akosombo was 248.9 ft compared to 257.2ft in 2019 and as of 5th March 2020, the water level was 261 ft. The water level at Akosombo as of 5th March 2021 was 265 ft. Water is therefore available for electricity generation now compared to 2014.

Again, gas supply has improved in recent times compared to 2016-2016. In the past, the country depended on gas supply mainly from Nigeria and due to the country’s indebtedness to Nigeria, supply was in most cases interrupted and sometimes cut completely from WAGP resulting in power outages. Thankfully, domestic production of gas has increased reducing the reliance on gas from Nigeria. Gas supplies from Nigeria for power generation reduced from 46% in 2018 to 36.6% in 2019. The Energy commission projected that gas for power generation will mostly come from local fields as the price of imported gas continues to be high. The average price of delivered gas from Nigeria was $7.01/mmBTU and that of local gas was uniform across the year at $6.08/mmBTU in 2019. The current high dependence on local gas has brought a huge relief on power generation as heavy fuel plants are currently being converted to gas-fired plants. Steps to further diversify the generation mix led to the construction of a grid-tied solar plant of 2.5 MW in 2013 and as of 2019 renewable plants stood at 42.6MW. The country has the potential of producing enough power from renewable energy sources especially solar and wind on a grid-scale. This led to the development of a renewable energy master plan with the plan to have up to 1,094.63 MW of grid-connected renewable sources in the generation mix from the current figure by 2030.

Losses in both transmission and distribution systems continue to be a worry to the country and these losses have not changed significantly over the years. This is posing a lot of pressure on the distribution and transmission companies. Maintenance over the years has not been as expected leaving the system vulnerable to huge losses. For example, losses between purchases and sales of power in 2000, 2014 and 2019 were 27.2%, 25.1% and 24.7% respectively. These losses are attributed to both commercial and technical losses. The utility companies need to upgrade their infrastructure to reduce losses.

There is a need to employ technology to monitor the tempering of distribution facilities and meters by unscrupulous people who take advantage of the weaknesses in the system.

In as much as the current power outages have been blamed on technical hitches, it cannot be said to be completely true as it is a mix of technical and financial challenges. In more recent times the Chamber of Independent Power Producers, Distributors and Bulk Consumers had served a notice to withdraw their services of power supply if ECG and government fail to settle at least 80% of the $1 billion due them. For some of these challenges to be resolved there is the need to critically evaluate the operations of ECG and possibly look for private participation in the form of either total privatization or on concession base. The failure of PDS should not deter us from taking such as step as it is the surest bet to manage and profit from the power distribution sector. There is the need to also consider creating competition in the distribution sector especially in the ECG operational area. That is opening the distribution sub-sector up for other participants like we have successfully done in the generation sub-sector. Perhaps having one or two additional distributors in addition to ECG will create healthy competition in serving power consumers.

The writer, Mudasiru Mahama is an Energy Analyst and can be reached on 0245141507 or via email: [email protected]