March 20, 2019

Energy Minister, John Peter Amewu has told Parliament that Government is renegotiating a new power purchase agreement, the ‘take and pay’ arrangement which is expected to be more cost effective.

The Minister who accused the previous NDC government of arranging a ‘take or pay’ agreement which have incurred more cost to the country said the numerous power purchase agreements have saddled the country with overcapacity payments averaging about USD 25m monthly.

To mimimise this, “we are engaging in renegotiating of the PPAs to bring these cost down to the barest minimum in the interim”.

The Minister who stated these on the floor of parliament in a statement on the recent power cuts said a number of system disturbances experienced between March 12 and 13, 2019 resulted in the interruption of power supply to customers and attributed the disturbances to challenges at the newly commissioned Accra Central substation.

He noted that “the issue of ‘take or pay’ without considering what Ghanaians will pay is gone, under the president’s watch, we are beginning to consider a regime of take and pay, you cannot continue to pay for goods and services that you are not consuming, that era is gone.

We believe that the issue of ‘take and pay’ must begin to trigger down to every Ghanaian, we will continue to make sure that high excessive regime of tariffs being consulted will no longer be witnessed on any Ghanaian”.

Mr Amewu alleged that Gas purchase agreements were signed under the previous regime without considering what the benefit will be, the current government he said has taken the trouble to negotiate the OTCP price, with the price brought down to a margin of US$2, that translates to about 50m per annum for the consuming public.

He explained that the power cuts occurred during a period where there is already an on-going five day outage that has been taken on the 330kV transmission line between Tema and Aboadze for relocation of two towers on the line at the request of the Ghana Highway Authority to enable the construction of a new interchange at Pokuase.

The fundamental cause of the blackout he said is the ongoing constructions of the road interchange at Pokuase, which has necessitated the diversion of GRIDCo’s 330kV transmission line towers that runs from Tema to Aboadze in that vicinity.

This requires taking an outage of the entire line to undertake the diversion.
The power system of Ghana has an installed generation capacity of 4,775MW. Available generating capacity is 2,641 MV currently, with the maximum peak demand recorded so far in 2019 around 2,600MW.

Christian Kpesese/