Source: newsthemegh.com
Samuel Atta Akyea, the chairman of the Parliament’s Mines and Energy Committee, revealed that between 2017 and 2020, the government paid almost $1 billion in excess capacity fees.
According to him, the annual cost of unutilized capacity ranged from US$ 105.4 million to US$ 373.7 million.
He said that over the time period, a total of US$368 million had been spent on unutilized capacity, and an additional US$600 million had been spent on the cost of reserve margins, for a total of US$ 968 million.
In reaction to a press conference by the National Democratic Congress (NDC) minority on the state of Ghana’s energy sector, Mr. Atta Akyea addressed the media in Parliament and made this disclosure.
The Chairman, who is also the Member of Parliament for Abuakwa South, said that the take-or-pay contracts that the former Mahama administration signed with Independent Power Producers (IPPs) are to blame for the current status of the Ghanaian economy.
He expressed amazement that the NDC would claim that all agreements were adopted by all parties in the House with no opposition from the NPP minority at the time.
When the rule is that “the majority will have its way and the minority will have its say,” this is especially true.
“Would they have the right to blame the Akufo-Addo government for contracting loans that were equally approved by both sides of the house?” he questioned. “If today the NDC claims that the agreements were approved by both sides then.”
According to Mr. Atta Akyea, a large amount of overcapacity in Ghana’s energy sector is confirmed by the report of the Ghana Integrated Power Sector Master Plan (IPSMP) under Generation and Demand of 2019.
And even after the power plants that are currently under construction are put into service, the overcapacity was predicted to last for 5-7 years.
The reserve margin in 2018 and 2019 was much larger than the anticipated reserve margin of 20%, according to the report.
“In addition, it is anticipated that the overcapacity issue would last through the middle of 2020. According to the 370MW AKSA EPA, there is no question regarding the issue of surplus capacity.
But he also said that the Akufo-Addo administration has planned and made important adjustments since 2019 to greatly reduce the consequences of idle capacity and emergency power agreements on the energy sector.
He listed them, among other things, as moving the Karpower Ship from Tema to Takoradi and changing the plant’s fuel source from HFO to natural gas; offering alternate fuel sources to address natural gas shortages; and switching the flow of natural gas from the western corridor to the eastern corridor.