Ghana to reduce excess electricity spending after President Nana Akufo-Addo directive.

Ghana Government has announced that they lose US$30m annually due to spending on excess electricity capacity. The Minister of Energy John Peter Amewu made the announcement during the American Chamber of Commerce (AMCHAM) in Ghana forum.

The theme of the forum was ”Energy sector perspective: vision and strategies for a sustainable energy sector in Ghana’’.

John Peter Amewu said “Every power sector needs some elements of reserved margin for emergencies. He said between 15 to 20% is the allowed margin; but in situations where excess capacity is reaches 50%, then it calls for questioning and some analysis.”

According to him, President Nana Akufo-Addo has directed the ministry to investigate and find out the problem. This is because the country will not continue to pay such outrageous sums for excess capacity. Forecasts assume that the cost of electricity to consumers may reach US$403 million in 2020 and US$493 million by 2021 if there is no solution to the problem now.

The finding from the team set up to investigate the situation is that Power Purchasing Agreements (PPA) far outweighs what is required.

This finding led the Ministry to recall 11 Power Purchasing Agreements (PPA) which will be terminated.  This is because most of the PPAs that came on board did not go through any competitive process of negotiations and did not offer value for money.

The Ministry has also opened a discussions with all the PPAs to review their charges.

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