Ghana is on the verge of experiencing another episode of the dreaded ‘dumsor’ as the Chamber of Independent Power Producers Directs Members to suspend power supply to the national grid, starting from July 1, 2023.
According to the Chamber of Independent Power Producers (IPPs), the directive is to exert the needed pressure on the government and demand that the government does the right thing.
The chamber, representing prominent players in the thermal power sector, aims to leverage this action to demand the settlement of a significant portion, 30%, of the colossal $2 billion debt owed to them.
The chamber, meanwhile, urged its members, including influential entities such as Sunon Asogli, Cenpower, Karpowership, AKSA, Twin City Energy, and CENIT, to withhold nominations and refrain from declaring availability to the System Operator during the specified period.
By doing so, the independent power producers seek to create a power deficit that could lead to potential electricity fluctuations and, in worst-case scenarios, power outages commonly known as ‘dumsor.’
The chamber expressed gratitude to its members for their unwavering support and declared an unwavering determination to achieve their objectives at any cost. With a cumulative power generation capacity of 2010 megawatts, the IPPs possess significant leverage in this high-stakes negotiation.
While the government has yet to officially respond to the IPPs’ demands, the potential consequences of the power producers’ disconnection from the national grid are cause for concern. Ghana’s energy security hangs in the balance, and the nation could find itself grappling with a perilous electricity shortage if the impasse remains unresolved.
The precarious situation spotlights the inherent vulnerability of Ghana’s power infrastructure and underscores the pressing need for sustainable solutions to address the systemic issues that have plagued the country’s energy sector for years.
Without Swift Action to Address the Mounting Debt
Without swift action to address the mounting debt and establish a more stable framework for power generation and distribution, the specter of ‘dumsor’ may continue to haunt the nation, thwarting its economic progress and undermining investor confidence.
As the deadline for the IPPs’ action looms, all eyes are on the government’s response, as it navigates the delicate task of striking a balance between meeting the demands of the power producers and safeguarding the nation’s energy security.
In the intervening time, Ghana’s independent power producers rejected a government’s proposal to restructure a $1.4 billion debt owed them by the country.
Elikplim Kwabla Apetorgbor, the head of Ghana Independent Power Producers Chamber, said they could not guarantee power generation if the government failed to meet debt its obligation.
“Members have accrued huge arrears with their suppliers for which they are already in default and accruing associated penalties. We cannot continue defaulting on our obligations,” Kwabla Apetorgbor said.
“It’s very important government prioritize payment to us at this critical point,” Kwabla Apetorgbor said, adding that turning the power off is not an option for now.
Independent Power Producers (IPPs) or non-utility generator (NUG) are private entities (under unbundled market), which own and or operate facilities to generate electricity and then sell it to a utility, central government buyer and end users.
In Ghana, IPPs may be privately-held facilities capable of feeding excess energy into the system. IPPs invest in generation technologies and recover their cost from the sale of the electricity. They are great help to Ghana’s energy sector.
