Fuel crisis threatens power target

Whether government can attain 5,000 megawatts of power by 2016 is not for want of generation capacity but the availability of fuel, Togbe Afede XIV, Director of Sunon Asogli Power Limited, has said, asking government to sit up.

He said if it were merely the capacity to generate power, private people or Independent Power Producers (IPPs) could have done that. But the lack of fuel for power generation is what holds generators back.

“In terms of investment in the energy sector, in particular power generation, I think we have a lot in the pipeline; what is missing is the fuel to support those prospective power plants. I believe that is where a lot of emphasis should be,” he told the B&FT.

Sunon Asogli has put on hold the second phase of its power project in Ghana, involving some 360 megawatts, due to the lack of fuel.

Already, the first phase of the project (200megawatts) which was completed and put to use since October 2010 is struggling to produce power due to the challenges with gas from Nigeria.

The company’s main Chinese shareholders told Energy Minister Emmanuel Armah Kofi Buah in China recently that it lost approximately US$15million due to the interruption of gas supply from Nigeria from August 2012 to July 2013.

Approximately 2,240 Gigawatt hours (GWh) of power per year will be added to the national grid if the second phase of the project comes on board.

Various thermal power projects have been proposed by Independent Power Producers. The Energy Commission says it has given “provisional licences” to seven IPPs to provide about 2,000 megawatts of electricity.

The country already has around 2,800 megawatts of installed capacity, but the lack of fuel has meant that less than 2,000megawatts is in use.

With thermal power becoming increasingly important in the country’s generation mix, the availability of gas, which is less expensive than crude oil, has also become critical to power generation.

Currently, electricity consumption in Ghana is estimated at over 7.095 billion kilowatts per hour (kWh), while production capacity is pegged at over 6.489 billion kWh.

According to the VRA, the country requires some 400 million MMBtu of gas for VRA’s own thermal plants as well as the Asogli plant.

Even if the much-awaited Jubilee gas comes on board, it will not meet this demand.

With the country’s probable gas reserves estimated at approximately 5TCF (trillion cubic feet), there is however potential for self-sufficiency.

In the meantime, Ghana continues to rely on gas from Nigeria, but with supply becoming increasingly unreliable, the government has been urged to consider importing Liquefied Natural Gas (LNG) from other countries to help manage the gas supply challenge.