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As Ghanaians inch towards the November, 2016 elections, nothing seems to catch our imagination than the talk of power outages known as dumsor. In 2015, the President pledged in Parliament that he will fix it. Momentarily, President Mahama seemed to have strangled the dumsor animal. However, over the past few weeks, the animal seems to have resurrected and has been rearing its ugly head in our homes, industries and work places.

I have heard Energy sector captains give reasons as cuts in gas supply to thermal plants by Ghana Gas and the West Africa Gas Pipeline Company coupled with the extreme low water levels in the Akosombo and Bui dams.

I think solving this problem alone could profoundly accelerate growth, empower citizens and provide the needed shot in the arm of government as it prepares for a crucial election in November, 2016.

I have watched the energy sector for a very long time and I have realized that the sector is beset with hydra-headed challenges. In my view, the most niggling challenge facing institutions in the power sector are high losses (power theft, technical and commercial)), non-payment of bills, and tariffs set below cost-recovery rates. Certainly, reducing these losses require substantial funding in terms of better network layout and use of better technologies like pre-paid meters.

I have sighted a draft report of the study commissioned by the then Ministry of Energy under the Ghana Energy Development and Access Project (GEDAP) 2, prepared by Messrs Global Energy Consulting Engineers on Technical and Commercial Losses occurring within the distribution systems of the Electricity Company of Ghana (ECG) and the Northern Electricity Company (NEDCo). The report reinforces my position as it also identified technical, commercial and collection hidden costs as the three fold challenges facing the sector.

I have observed also that these challenges are complicated by rapid growth in customer demand and the increasing dependence on costly oil and gas based thermal generation since hydro generation capacity is insufficient and rainfall shortfalls further reduce hydro generation capacity. Additionally, due to dire social and economic situation in the country, the government does not allow the utilities to pass on all the increased generation costs associated with more costly thermal generation on to consumers. Will these problems be handled in the short, medium and long term?

I have read a World Bank research paper by Jane O. Ebinger. It states that, “insuch situations, utilities typically reduce investment in maintenance; delay or forego essential maintenance and repairs; or reduce the workforce, actions that trigger a downward spiral of significant deterioration in the value of assets, declining service quality, and increasing cost for each unit of service provided. When this happens, losses are increased substantially and abnormally high investment is required to carry out repairs, which is rarely cost effective.”  

According to the World Bank, “Since these costs are generally not recorded, the utilities are not fully aware of the quantum of costs they are absorbing on behalf of the government, and these costs are thus termed as “hidden costs”. These hidden costs are in effect a subsidy to the consumer which cannot be sustained ad infinitum by the Utility entities.Hidden costs weaken the financial positions of the utilities, and this weak financial position of the utilities is a major constraint to them being able to upgrade their systems and enter into partnership with Independent Power Producers (IPPs).”

Fortunately, I see a number of high profile initiatives which are adding momentum to efforts to solve the dumsor problem. Accordingly, I am happy to note that some Thermal Plants at the Aboadze power enclave near Takoradi in the Western Region zoomed back into operation over the weekend, as the VRA successfully took delivery of over 400,000 barrels of Light Crude Oil (LCO) from Nigeria.

Furthermore, Tullow Oil-Ghana, the lead operator of the Jubilee fields has managed to overcome some of the weather-related challenges that affected the FPSO Kwame Nkrumah’s gas deliveries to Ghana Gas. 

Therefore, gas deliveries to Ghana Gas will be ramped up from 46.7 MMSCF-D (million standard cubic feet per day) to averagely 80MMSCFD. Tullow’s revised DCV (Daily Contractual Volumes) of gas which will be delivered as per the terms of the Article 9.4 of the Jubilee Foundation Volume/ Gas Sales Agreement (JFV-GSA) 70 MMSCD is expected to be supplied from the FPSO on 19th July, 2016. From 20th t0 31st July, a daily average of up to 80 MMSF is expected to be supplied to Ghana Gas. This will boost Ghana Gas’ ability to supply lean gas to the Ameri Plant, in line with VRA’s priority policy. This is aside Liquefied Petroleum Gas (LPG) and Condensates produced by Ghana Gas for the local market.

Deputy Power Minister, John Jinapor has assured another consignment of 550,000 barrels will arrive by the close of this week solely for the thermal plants in the Tema power enclave.

John Jinapor’s boss, the Acting Minister of Power and Finance Minister, Seth Tekper has issued a statement that explained that the government is helping VRA to deal with its indebtedness to various banks. These debts were crippling VRA’s efforts to obtain credit for its operations.

A statement from the Ministry of Finance explained that “government, acting through its Ministry of Finance and Ministry of Power is pleased to announce that it is progressing towards a successful conclusion in the restructuring of a substantial portion of the debts owed by the VRA”. The agreement when concluded is expected to comprehensively restructure VRA’s balance sheet.”

The immediate impact of this arrangement is to strengthen the balance sheet of VRA and enhance its ability to arrange more structured trade lines to support its day-to-day operations under a well-managed escrowed receivables structure, which will avoid build-up of further unsustainable debt.

Will the lights come on? Will industries have the needed power? Will dress makers, tailors, barbers and small scale artisans have power for their work? Will VRA and the other power sector operators Utilities assure Ghanaians of reliable power from today?

I wish to remind the government, the power sector operatives and electricity consumers of a simple but deep statement made by Jeff Immelt, the CEO of the American transnational company, General Electric, in an interview with the African Business Magazine of May, 2016. He said, “Without electricity, there will be no prosperity. It’s as simple as that.”

We can’t eat our cake and have it.

We must acknowledge the cost of generation mix channeled into the power pool by Independent Power Producers and commit ourselves to pay realistic tariffs.

We must invest in Energy-efficient systems especially use of LED lamps, which is an improvement on the CFL bulbs.

There is an urgent need for municipal and District assemblies who are responsible for maintenance of street lights to replace faulty photocells and to switch off street lights when the sun is up.

In line with the Presidential program for 200,000 roof-top Solar PV for homes, we must endeavor to do personal investments in roof-top solar systems which can also play a complementary role in assuring self-sufficiency in electricity supply to homes.