Power sector surges strong in Ghana

What will determine whether Ghana will become a net exporter of electricity?
Currently Ghana’s total installed capacity is about 5,000 MW, whereas Ghana’s peak demand is about 2,400 MW. There are more independent power plants [IPPs] scheduled to come on line in the ensuing years. This gives us an advantage as we have capacity that we can export to neighbouring countries. If the price is good, we will be able to export power to anywhere in West Africa.
Ghana does some exports at the moment to Togo and Benin as well as to Burkina. Though there were reduced exports to Togo/Benin in the recent past years as a result of the tariffs, we have settled on pricing which is acceptable to both parties and exports have increased. Ghana has the added advantage of having more reliable power in comparison to other countries in the sub-region who export power. This makes a strong case for us to increase our exports as a result of increased demand for our supply.

How do you expect demand for electricity to change in the coming years and what is Gridco’s response to this change?
In the past, demand was increasing at 10% annually, and currently it is at about 6% per year. It will continue to grow and, therefore, has given rise to many IPPs coming on the scene and coming to us for connection. We are also preparing ourselves to receive all of these IPPs.
We have started expanding our system through the construction of more power lines and substations. We have built a 330-kV powerline from Aboadze all the way to Tema, and continuing to Davie in Togo and Benin. This is to facilitate export of power to our neighbours in the east. This is in addition to the existing 161-kV transmission interconnection with CEB, the joint utility of Togo/Benin. We are in the final stages of constructing a 330-kV line from Aboadze down south all the way to Bolgatanga in the Upper East region of approximately 600 kilometres. This line includes 330-kV substations at Kumasi, Kintampo, Tamale and Bolgatanga. From Bolgatanga the line interconnects with Ouagadougou in Burkina at a 225-kV voltage. Export of power to Burkina commenced in June and we are expecting to export about 100 MW of power by close of the third quarter.
Internally, we are firmly positioned to meet demand growth via the grid expansion works we are undertaking as a company. This includes the strengthening of the existing 161-kV line from Volta to Achimota in Accra. These lines were built in the early ‘60s and over the years they have reached their maximum capacity. There is thus the need to upgrade these lines to increase transfer of power from the generation hubs to the major load centre of Accra and also reduce transmission losses associated with line overloads. There are also plans to put up a 330-kV substation at Pokuase, a suburb of Accra, to help us deliver power into the city. We are doing all this strengthening in order to improve reliability; we have a target of meeting a 99.9% reliability and we are determined to achieving it.

Are there any plans for the company to be privatised?
Currently Gridco is solely owned by government, making it the majority shareholder with the right to determine the company’s future. We are enjoying a monopoly. The law permits other companies to own part of the transmission grid operation, however this remains the sole duty of Gridco.
The government has indicated its future willingness to go to the stock market seeking private participation. Until such decisions are taken, we remain focused as a company to continue doing what we know best: Delivering quality service to our clients in a reliable manner.

Has the issue of companies being in debt to Gridco been resolved?
The issue of debt is not one which is limited to solely to Gridco. There have been some challenges in the energy sector for a while now, and all stakeholders are on board to resolve them. Indeed Gridco is owed debt by its major customers, which include the ECG, some small mining companies and Valco [Volta Aluminium Company]. The government of Ghana has issued some energy sector bonds, which Gridco is hopeful will receive some funds to clear the debts owed it. A cash waterfall mechanism is also expected to be operational this year to address some of these debt recovery issues.
These notwithstanding, Gridco is taking appropriate measures to keep its operations ongoing and not interrupt its quest of becoming a model electricity grid company of choice. Despite these challenges, Gridco still remains a good company to invest in and is open to investors once favourable terms are agreed on.

What role will renewable energy play in the power generation sector’s future?
The use of renewable energy [RE] is not new to Ghana. As far back as in the 1960s, the first hydroelectric dam was built in Ghana. Ghana is endowed with many renewable energy resources and in line with that, the government has a policy to increase the share of renewable energy in the total national energy mix to 10% by 2020. We have received a lot of applications for Gridco connection from potential RE developers, which is very good. Only a few though have materialised so far. In as much as we are excited about the interest in REs, there is the need to keep the discussion going on how REs will provide us with the projected high capacities of power needed for industrialisation. We really do need massive electric power to power the industries such as the aluminium smelter and the identified bauxite industry.

What investments in infrastructure does Gridco need the most?
We have had so much investment in generation, but if you don’t have the transmission systems, you cannot do anything. We need to build transmission lines to reinforce the transmission systems in order to be able to carry the generation to the consumer, wherever they may be. We need to build that infrastructure to have reliable supply and to reduce transmission losses.