Energy expert, Dr Yussif Sulemana, has disclosed that the threat by the Independent Power Producers (IPPs) to shutdown its operations over non-payment by government could lead to potential power outages in the country.

According to him, the implication of the threat is not a very refreshing news and if they go ahead to execute the threat as per announced, there’s going to be a serious problem within the energy sector, especially the power sector. He explained that the IPPs came on the power scene as a result of the fact that Ghana had so much deficit in power generation.

As a result, Dr Sulemana indicated that government deemed it a good idea to bring them on board to make up for the shortfalls within the power generation.

“… They taking some power out of the picture is not going to be welcoming, it’s definitely going to lead to another potential dumsor if they go to execute what they have threatened.”
Dr Yussif Sulemana

Despite the relief the IPPs brought to the country in terms of a staggering reduction in power outages, Dr Sulemana lamented that the terms of the contracts were a bit “draconian”. Nonetheless, he stated that over the years, the generations have been robust and government can credit the stability to some of these IPPs.

“… I’m not very comfortable with some of the contracts that they signed because we were so constrained and they just had to squeeze us to sign some of the contracts that we signed.”
Dr Yussif Sulemana

Commenting on what will be a goof compromise for both government and the IPPs, as the former is looking to restructure its debt with fierce resistance from the latter, the energy expert noted that a good compromise will be for both parties to sit down and meet each other halfway. With this, he emphasized that cutting power to the grid shouldn’t happen and government should do all it can to ensure that does not happen.

“If they do that, certainly they are going to have huge problem. So, I think they can come together and look at 50-50. The IPPs are business entities and they are in to make profit as a matter of fact and there’s not much they can do. On the other hand, looking at how they have entered into the industry in terms of the power sector, they’ve come to stay. So, what I’ll recommend is that the government should sit down with them…”
Dr Yussif Sulemana

Resolving stalemate between IPPs and government

In hindsight, Dr Sulemana underscored that the debt piled by government and owed IPPs could have been avoided. He highlighted that considering the power generation sector, there are three chains which are intricately linked in a way that if there’s any inefficiency within one sector, the cascading impact on the other sectors will be dire and in the distribution company is the weak link within this chain.

Nonetheless, to salvage the situation, Dr Sulemana noted that government can think about other innovative means to turn the revenue flow to the electricity company, which is the distribution center and make it vibrant. He stated that if IPPs produce power and government can’t account for the power, it’s going to be very difficult going forward.

“… I think ECG which champions the distribution chain will have to be innovative in the revenue mobilization. They have to target the SOEs and institute measures that will enable us to understand that SOEs cannot have their way all the time… I think also we have to diversify this generation portfolio to encapsulate things like renewables, especially solar. If we do that, I think the burden on the thermal generation plant will be reduced to the barest minimum…”
Dr Yussif Sulemana