The Volta River Authority, (Ghana’s main power generator) says it is in the process of acquiring vast arches of land to assist with the growing interest by Independent power producers (IPP) in Ghana’s energy sector. Kirk Koffi CEO of VRA revealed this recently in an interview on an Accra based radio station. He added “That will be our contribution to IPPs”
Since 2012 Ghana has seen an increasing trend of IPPs coming on the market with the intention to sell their power to the Electricity Company of Ghana (ECG) through off-taker contracts with the energy distributor.
Though many of them have articulated the desire to invest in the power sector, the lack of incentives and a non-progressive tariff system are some of the issues which have diluted their interest. But their investment is still critical if the nation is to achieve its rising energy demand, which requires that 200 megawatts be added to installed capacity each year.
The Government of Ghana, specifically the VRA, is embarking on initiatives which the Authority reckons will draw more IPPs into the energy sector to help the country meet its goal of installing 5,000 megawatts of electricity by 2019. The current national power-generation capacity is around 2,800 megawatts, of which IPPs — mainly Sunon Asogli Power Ltd. and CENIT Energy Ltd., owned by SSNIT, contribute 11%.
Advancement in Ghana’s utility tariffs system with the anticipated full implementation of the automatic tariff adjustment formula that kicked off last January is vital to drawing energy sector investors. The formula’s objective is to attain full cost-recovery by the state-owned utility companies, but that will also increase the tariffs paid to IPPs which are higher than those received by their public-sector equals.
Sunon Asogli Power Ltd., a joint-venture between Ghanaian and Chinese investors, operate and own the largest IPP investment in the power sector, the 200-megawatt Sunon Asogli power plant is powered by natural gas from Nigeria. The plant was built with support from the VRA, whose own combined generating capacity is 2,100 megawatts.
On-going power projects involving IPPs and the VRA include the Takoradi 2 Thermal Power Project (T2) Expansion. The project, jointly owned by VRA and TAQA Energy of Abu Dhabi, seeks to expand the 220-megawatt T2 plant from a single cycle power plant to a combined cycle power plant — that is, utilising the heat generated by one engine as the heat source for another in order to enhance system efficiency.
The project will increase the installed capacity of the plant by 110 megawatts and it is expected to be completed by end of 2015.
Another IPP, Cenpower Generation Company Limited, is constructing a 340-megawatt plant at Kpone, near Tema at a cost of $600million.
“The VRA is also seeking IPP’s to partner in their Wind Power Project. This project seeks to develop between 100 MW – 150 MW of wind farm capacity. The approach is to develop this through joint-venture partnership. Currently two reputable companies have been identified to be working with VRA to undertake the wind measurement after which the project could be developed. Wind measurements will be undertaken at 8 sites, 4 coastal sites and 4 inland sites” said Kirk Kofi, CEO of VRA.