A Ghanaian energy think-tank, the Energy & Associates Ghana has suggested that the constant use of excess power capacity argument by the Government of Ghana as the reason for the cancellation of the energy contracts is flawed.

According to the think-tank, the only way that the Government of Ghana can talk about excess capacity is when there is surplus power between generation and consumption on the basis of a 100 percent electrification access rate. But, currently, Ghana has some 18 percent lack in access to power, according to data from the Energy Commission. “So, the argument intended to make many believe there is excess capacity is flawed.”

The Think-tank observed that, the question non-technical people keep asking is whether or not we have excess capacity of power. “On the face of it, one can comfortably say YES there is excess capacity of power, looking at our current consumption of 3400MW as against 5000MWplus of installed capacity.”

However, he asserted that “technically we do not have excess capacity.” He explained that the “current unmet deficit of about 500MW, which excludes the consumption of VALCO (operating at full blast) and 18% of ‘spin reserve’ requirement are the lowest threshold of consumption.”

The Energy & Associates further pointed out that the huge investments made in the power sector between 2013 and 2016 saw the target of 5,000MW of generation met. “So consumption has been within range, making many to believe there is excess capacity.”

However, the Energy & Associates stressed that if system capacity is exactly equal to demand, the slightest increase in demand or when one power plant cannot operate at its optimum capacity, there will be shortage and will result in load shedding

Meanwhile, the think-tank made a projection that looking at our projected consumption against government’s committed project, “there is the need to increase generation of nothing less than 500MW else we will go back to crises in just 3 years to come.”

In addition, the think-tank projected that Ghana will return to crises in 2025 as peak load will be 4,921MW against a dependable generation of 4,870MW. This, according to the think-tank will result in a deficit and the country will be back in crises. Hence, “there is no such a thing called excess capacity in Ghana as the current government claims.”

The Energy & Associates pointed these out in response to claims that the country produces excess capacity, leading to the wrongful cancellation of power agreements like the one between the government and Ghana Power Generation Company (GPGC) Limited in 2018.

It can be recalled that, as a result of cancellation of some power agreements by the government of Ghana, the country has been slapped with judgement debt.

Recently, a United Kingdom Court has awarded a US $164 million judgment debt awarded against Ghana for wrongfully terminating the contract of an independent power producer, Ghana Power Generation Company (GPGC) Limited.

Meanwhile, the Attorney General reacting to the ruling said “the agreement was unnecessary and ill-informed because the country did not need excess power at the time and that an inquiry would be instituted into the matter to protect the public purse.”