1. FUTURE OF POWER GENERATION IN GHANA At the 2019 GhIE Annual Conference
FUTURE OF POWER GENERATION IN GHANA
by VRA
At the 2019 GhIE Annual Conference
March 27-28, 2019

2. Presentation Outline Overview of power sector of Ghana
Current Power Generation Situation in Ghana
Power demand outlook
Future power generation options to meet projected demand

3. Overview of Power Sector of Ghana

4. Institutional Framework of Power Sector of Ghana
Ministry of Energy Energy Commission Public Utility
Regulatory Commission
NEDCo
ENCLAVE POWER CO.
IPP’s – SAPP, CENIT, TICO, KARPOWER, AKSA. Etc.

5. Ghana Power Supply Market
Regulated Market (Tariff Determined by Regulator)
Distribution Companies
ECG
NEDCO
Enclave Power Company
De-regulated Market (Tariff determined independent of Regulator)
Some Mining Companies
Some Industries
VALCO
Exports
Burkina Faso
Togo/Benin
Power exchange with Cote d’Ivoire

6. Current Power Generation Situation in Ghana

7. Installed Generation Capacity in Ghana (MW)
Plants
Installed Capacity
Dependable Capacity
Fuel Type
(MW)
Akosombo GS
1020
900
Hydro
Kpong GS
160
105
TAPCO (T1)
330
300
LCO/Gas
TICO (T2)
340
320
TT1PP
110
100
TT2PP 80 70
Gas
KTPP
220
200
Gas/ Diesel
VRA Solar Plant
2.5
Solar
TOTAL VRA
2,263
1,995
Bui GS
404
360
CENIT
AMERI
250
230
SAPP 161
180
SAPP 330
KAR Power
470
450
HFO
AKSA
370
350
BXC Solar 20
Meinergy Solar
Trojan 44
39.6
Diesel/Gas
Genser 22 18
TOTAL IPP
2,270
2,067.6
TOTAL (VRA, Bui & IPPs)
4,533
4,063.6

8. 2019 Demand/Supply Situation
Currently, there is adequate capacity to meet the full electricity demand on the Interconnected Transmission Network
At the beginning of this year, it was forecasted that the system peak demand would be approximately 2,700 MW, made up as follows:
Domestic Demand – 2,400 MW
VALCO – 150 MW
Export – 150 MW
The installed capacity is over 4,500 MW and the dependable capacity is about 4,000 MW
We have about 1,300 MW (48%) more than what we currently need

9. 2019 Demand/Supply Situation
Additionally a number of thermal generation projects are currently under construction and expected to come online between 2019 and 2020.
Cenpower – 360 MW
Amandi – 190 MW
Early Power – 390 MW
CPGC – 100 MW
TOTAL – 1,040 MW

10. Some major challenges confronting power supply are:
2019 Demand/Supply Situation
Some major challenges confronting power supply are:
Reliability of gas supply
Inadequate gas volumes in the Eastern enclave of the power sector
Cedi/Dollar exposure
Financial Challenges
Electricity Tariff Structure
Self RE generation

11. Reliability of Gas Supply

12. Reliability of Gas Supply

13. Inadequate Gas Volumes
There is a total of about 1080 MW (LCO/gas fired) installed capacity in the Eastern Enclave
Another 360 MW is under commissioning
There is enough gas to operate just about 280 MW of generation capacity
800 MW capacity cannot be dispatched because of inadequate natural gas volumes
Puts pressure on hydropower plants and other thermal plants
Efforts being made to enable gas transfer from the West to the East

14. Cedi to Dollar Exposure – Timing of Tariff Adjustments Not Keeping up with Cedi Depreciation

15. Cash Flow Issues
VRA indebtedness to Ghana Gas is about US$ 750 Million
This is simply because what ECG pays VRA for power consumed by the AMERI power plant is sufficient to cater for AMERI capacity charges only (fuel consumed is not paid)
VRA not being paid and hence they are also not in a position to pay Ghana Gas, hence the build up of the indebtedness to Ghana Gas
VRA can only pay when paid by ECG
ECG also has issues with non-payment by GoG institutions and also below 100% collection of electricity used by non-GoG institutions
Inter-Utility debt Matrix handled by GoG is expected to address it
ECG struggles to pay in full, IPPs currently in Operation
because of Forex Exposure and
below cost tariff (some of the expectations on fuel use for Tariff could not be met, e.g. Karpower was expected to operate on Gas-still operating on HFO)

16. Electricity Tariff Structure
The current tariff structure is purely energy based and that poses a challenge for covering full cost of services that is charged based on both Fixed and Variable charges
Existing contracts have both fixed (plant capacity being available) and variable (energy supplied)
An IPP gets paid (capacity payments) once the plant is available, even if the plant is not dispatched. To address this requires tariff to have a fixed and variable component
For reliability there is the need to have charges for reserve plants as well
So tariff requires fundamental shift.
PURC is currently undertaking a study on the tariff and hopefully it will address this challenge

17. Self RE Generation
Following the recent ‘Dumsor’ a number of people have solar systems that they use for their house
Such consumers use grid power as back-up
Good concept, but metering and commercial arrangements have not been fully concluded
Using grid as back-up requires that some payment should be made to the grid (Distribution Network)
Need the right Net Metering systems and agreement on policies to govern same

18. Future Power Demand/Supply Outlook

19. Future Demand Outlook
Over the medium – long term demand for electricity is projected to grow at an average of about 7% from 2,500 MW in 2018 to about 5,800 MW in 2030
Major growth drivers are
ECG/PBS
NEDCO
VALCO
Electricity consumption is projected to grow at a similar rate from approx. 16,700 GWh in 2018 to about 40,000 GWh in 2030

20. Future Demand Outlook

21. Demand/Supply Outlook (2018 – 2030)

22. Demand/Supply Outlook
Considering only projects currently under construction
Cenpower – 360 MW
Amandi – 190 MW
Early Power – 390 MW
CPGC – 100 MW
TOTAL – 1,040 MW
Over the medium term (at least next 5 years) there is adequate generation capacity to meet projected demand + 20% reserve margin requirement
For the High demand case, there will be adequate generation capacity for the next 3 years

23. Demand/Supply Outlook
There are still a number of other generation projects that are to come online over the medium – long term
VRA Generation Initiatives to make existing assets more efficient
VRA and other IPPs Renewable Energy Initiatives
Other IPP Projects that have already signed agreements
Other future generation options under consideration
Nuclear
Coal

24. Projected Fuel Requirement

25. Projected Fuel Requirement
There are a number of gas supply initiatives to address projected gas demand
Indigenous gas – up to about 350 mmscf/day
Nigeria Gas – about 60 mmscf/day
LNG Initiatives – up to about 430 mmscf/day being discussed
Adequate gas provisions in place to meet projected gas demand
Need to properly coordinate initiatives and get the timings and terms right
This is to help avoid payment for gas not needed
Need to address gas infrastructure requirements of the Eastern power generation enclave

26. Key Issues Wholesale Electricity Market Financing New Projects
Market documents still being developed. It’s important to get it right
Success depends seriously on liquidity of the power sector to address all commercial settlement issues and enforcing settlement rules
With forex risk, we may end up paying more for electricity
Financing New Projects
High dependence on government
Utilities need to have a strong balance sheet to enable them raise the needed capital to execute projects in a timely manner
Preventing a panic procurement situation in future
Major investments in the power sector always take place after a power crises
We end up with expensive projects because we purchase in a position of weakness

27. Key Issues Fuel Supply Security
Need to improve fuel supply reliability
Get timing of LNG augmentation right
More efficient Procurement of New Generation
Procure additional generation through competitive tenders with enough lead time to get them operating at the right time

28. Conclusion Power sector of Ghana has evolved over the years
There is currently enough generation capacity to meet demand
There is the need to take steps to ensure timely procurement of additional capacity
Power sector of Ghana has some challenges and issues that will require that some key decisions are made regarding the power sector

29.
END OF PRESENTATION