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MAHAMA STRIPPED OVER DUMSOR: JDM’s MESS CLEARED; GHANA MAKES $586M ANNUAL SAVINGS

Politics

Contrary to claims by former President John Dramani Mahama that he solved the unprecedented energy crisis and chronic power outages (dumsor) which hit the nation during his tenure, it turns out that he added unnecessarily to Ghana’s installed generation capacity rather than tackling the real problems facing the energy sector at that time.

Contrary to claims by former President John Dramani Mahama that he solved the unprecedented energy crisis and chronic power outages (dumsor) which hit the nation during his tenure, it turns out that he added unnecessarily to Ghana’s installed generation capacity rather than tackling the real problems facing the energy sector at that time.

 

In fact, at the point when Mr Mahama left office, the only intervention he had made towards addressing dumsor was the purchase of a string of expensive emergency power plants, which led to unwanted excess capacity ‒ and a heavy financial burden on the state.

“We have always known that the problem of dumsor was financial and not shortage of generation capacity,” a statement from the Ministry of Energy yesterday said.

The statement, signed by Nana Damoah, head of communications, was in reaction to claims by the former President that he ended dumsor before he left office.

Wrong solution

The statement says that the deployment of emergency power plants did not provide the solutions that the country’s energy challenges required.

“At the time dumsor reached its peak, Ghana’s installed generation capacity was 3,600MW against peak demand of 2,087MW,” the statement observes.

“The rapid rise of demand for power from 2,087MW in November 2016 to the current level of over 2,400MW shows that dumsor could not have ended in 2016, but that there was a substantial residual power demand that is now being met with regular electricity supply.”

Recklessness

The statement reminded Ghanaians about the “recklessness of the Mahama government” in signing more than 30 power purchase agreements under the pretext of relieving Ghanaians of the dumsor problem.

“The reality however was that the power deals were avenues for rent-seeking and corruption,” the ministry said.

“It made no sense for the Mahama government to sign a cumulative 11,000MW of generation capacity although our peak demand is just about 2,400MW.”

These agreements imposed a cost burden of US$7 billion in capacity charges on the state between 2018 and 2030.

Yet now, most of the plants commissioned will never be used.

Drained Akosombo

In fact, the Ministry of Energy says, the Mahama-led government was saddled with countless corrupt deals and had no idea how to finance procurement of fuel by the Volta River Authority (VRA) to run the existing plants owned by the state.

“They instead piled up debts for the energy sector which stood at $2.4 billion at the time the NDC left office in 2016,” the ministry’s statement says. “They also failed to regularly maintain the existing plants and, worst of all, they over-drafted the Akosombo hydro dam and grossly depleted its capacity to generate power.”

It adds that the present use of emergency power plants to generate power is not because there are no alternative generation plants available. We are using them because of take-or-pay obligations to which the Mahama government committed the nation.

Pain makes gain

As things stand, Ghana has been compelled, through the recklessness of Mahama’s NDC government, to leave her own plants idle and seek to generate power from the emergency plants. This is “because we still have to pay for the capacity whether they generate power or not”, the Energy Ministry says.

Even though the water level in the Akosombo Dam is high, Ghana is still running only three turbines to avoid liabilities on the emergency plants bought by the past government.

“In fact, our thermal plants at Tema and Aboadze run less than 50 per cent of the time because of the same take-or-pay arrangements,” the ministry says.

The new government has taken the painful decision to terminate 11 of the PPAs, at a cost of $402.39 million, the statement adds. Other deals have been deferred, which has saved the country an estimated $586m annually.

No interruptions

The current improvement in electricity supply is the product of the NPP government’s successful arrangements with fuel suppliers for uninterrupted supply of heavy fuel oil (HFO), the ministry says.

A dedicated stock of light crude oil is also kept by VRA against unexpected shortages of natural gas.

“Therefore, unlike the Mahama government, which announced load-shedding any time the FPSO Kwame Nkrumah [the floating production storage and offloading vessel operated by Tullow Oil from the Jubilee oil field, off the west coast] was shut down, or when the West African Gas Pipeline had accidents, there have not been any interruptions in power over the past two years in spite of several shutdowns of the FPSO,” the ministry says.