"Dumsor" because of "liquidity problems" – A think tank against the government's explanation

Company News on Tuesday, November 27, 2018

Source: Myjoyonline.com

2018-11-27

The Institute for Energy Security (IES), an energy think tank in Africa, wants the government to be forthright about the cause of intermittent and unannounced power outages that occur currently across the country.

IES said Monday in a press release that, contrary to Energy Minister John Peter Amewu's explanation, the power cuts, commonly known as "dumsor", are due to localized defects, which is at the origin of the huge debts of the sector.

At a press conference held on Monday, Mr Amewu explained that one of the reasons for intermittent power cuts is due to the gas supply problems of Karpower, an electric barge. However, IES stated that this explanation is supported by facts.

"To be charitable, the explanations given by the Minister of Energy at the press conference are misleading and half-truths," retorted the think tank on energy.

"… [w]that Ghanaians live largely because of liquidity problems in the electricity sector, as the heavily indebted Ghana Electricity Company (ECG) is unable to repay its debts, particularly from independent power producers; leading to problems with fuel supply and load shedding for power plants, "IES said in the statement.

This evaluation by IES is aligned with the badessment of the situation by the minority.

The minority spokesman for energy, Adam Mutawakilu, said that if the government had not had liquidity problems, he would have been able to buy crude to solve these problems .

IES indicates that "for the year 2018, a thermal output of 11,301.65 GWh and a fuel cost of 4.7 billion Ghc (US $ 1.0 billion) were forecast. Despite the heavy debt of the books of the Volta River Authority (VRA), during the 2018 energy year, they must absorb 1.57 billion Gh ¢, which represents 33.57% of the cost, while the 3, The remaining 13 billion, or 66.43%, will be required by independent power producers. "

Ghanaians fear a return to the era of rampant shedding in 2013, which has frustrated economic activity and housing for almost three years.

In the meantime, the government badured that Ghana would not return at this time as it was making progress in addressing the temporary challenge of the energy sector.

Read the full badessment of the current energy situation by IES in the press release below.
November 26, 2018

GOVERNMENT MUST REACH "DUMSOR"

The Institute for Energy Security (IES) has followed with keen interest the developments surrounding the decision by the Ghana Grid Company (GRIDCO) and its counterparts to ration energy for several weeks in various parts of the country under the pretext of the "reduced gas pressure". they suggested was of a technical nature. Accra, Kumasi, Takoradi, the central and northern regions were the most affected. We have also taken note of the additional information provided by the Ministry of Energy, linking the scourge of "DUMSOR" to a problem of supplying technical gas from Nigeria.

Finally, the Minister of Energy has admitted the existence of DUMSOR that the government is trying to resolve. contrast with the Deputy Minister's statement that the issues have been resolved.

Although the Ministry of Energy and its agency seem to be unanimous about an alleged technical problem, however, we believe that what Ghanaians are living is largely due to the liquidity problems in the country. the electricity sector, as a highly indebted business of the electricity sector. Ghana (ECG) is unable to repay its debts to, inter alia, independent power producers (IPPs); leading to fuel stations and load shedding.

It should be noted that for 2018, a thermal generation of 11,301.65 GWh and a fuel cost of 4.7 billion Ghc (1.0 billion USD) was forecast. Despite the heavy debt of the books of the Volta River Authority (VRA), during the 2018 energy year, they must absorb 1.57 billion Gh ¢, which represents 33.57% of the cost, while the 3, The remaining 13 billion, or 66.43%, will be required by independent power producers.

It is common knowledge that in July 2018, the debt of VRA, NEDCO, VALCO and ECG with GRIDCO amounted to 957 million ¢, which is alarming. prompting IES to warn of the possible return of DUMSOR if this chain of cyclical debt is not processed.

We are aware that the impact of these debts has affected GRIDCO and the Nordic Electricity Development Corporation (NEDCO), which has resulted in operational difficulties at the national level, including capacity constraints for the Shield- transformer. Wire of Techiman, serving Abofour and Nkenkansu. the Ashanti region, a transformer overload problem in Wa Township and surrounding areas; among many others.

IES would like to reiterate for the record that "DUMSOR" incidents are a problem of liquidity and poor planning.

To be charitable, the explanations given by the Minister of Energy at the press conference are misleading and half-truthful.

Anyway, what is the essence of almost all bifocals in terms of fuel? Where is the contingency plan for the natural gas we depend on as a country? Why did ASKA and Karpower fail until today?

IES would like to call on the government to convey to the Ghanaian people the real situation in the electricity sector and, to move forward, to publish a realistic work schedule as soon as possible in order to develop a strategy to address the situation. Debt before it is looming in a complete crisis.

Sign:

Paa Kwasi Anamua Sakyi (Executive Director, IES)