29th October 2024 10:18:26 AM
3 mins readThe Institute for Energy Security (IES) has issued a stark warning to the Ghanaian public, cautioning that the country could be headed for an extended period of “low-key dumsor” due to ongoing issues within the power sector.
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According to IES, the government’s failure to tackle core financial challenges facing major power producers could lead to increased intermittent power outages in the coming weeks.
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At the centre of this potential crisis is the 560 megawatt (MW) Sunon Asogli Power Plant, which shut down its operations two weeks ago. As one of the nation’s largest electricity suppliers, providing approximately 12-15% of Ghana’s power, the absence of Sunon Asogli from the national grid is already causing a noticeable dip in power availability. Sunon Asogli’s owners have cited a prolonged delay in payments amounting to USD $259 million for power supplied as the reason for halting production, emphasizing that they require an immediate capital injection to address their debts and resume operations.
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While the Ghana Grid Company Limited (GRIDCo) has urged the power producer to restart production to prevent a looming power deficit, Sunon Asogli has maintained that without substantial payment, they cannot restore operations.
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The removal of Sunon Asogli’s 560MW capacity from the power grid has disrupted Ghana’s power balance, as daily generation has been falling short of the demand. GRIDCo data shows that power generation has averaged below 3,000MW over the past week, leading to a deficit of more than 500MW during peak hours. Although other power plants, like BridgePower and CenPower, have been brought online to compensate for the shortfall, the capacity gap remains unfilled, heightening the possibility of outages.
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IES stresses that, without a rapid resolution, this power supply gap could widen, pushing the country closer to a severe load-shedding scenario reminiscent of the “dumsor” era. Ghana’s power sector has sought to avoid prolonged outages by maintaining a delicate balance of supply and demand; however, Sunon Asogli’s shutdown threatens to undo these efforts and underscores the importance of financial stability among power producers.
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IES Recommendations to Government
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To prevent a potential power crisis, the IES has proposed several urgent interventions:
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The IES suggests that the government provide Sunon Asogli with a bridging loan or financial relief package to help clear its debts and facilitate a prompt return to operation. This measure would ease current grid pressures and prevent further supply disruptions.
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It also advocates for a structured debt payment plan to address the sector’s financial constraints. A prioritized schedule of payments to power producers would ensure that funds are allocated efficiently and could help stabilize operations across the sector.
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The government must strengthen ECG’s revenue collection practices to reduce payment delays, which would increase cash flow and help alleviate financial strain on power producers. Effective revenue collection is key to sustaining sector-wide financial health.
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The IES calls for comprehensive reforms aimed at addressing the root causes of systemic debt cycles in the power sector. By fostering transparency, encouraging private sector investment, and implementing reforms, Ghana can create a more sustainable energy industry and reduce the recurrence of power shortages.
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