Former Energy Minister, Dr Kwabena Donkor has attributed the current power outage that has hit Ghana to the Financial crisis in the Energy Sector.
According to him, the power crises will end when there is money. He added that the Volta River Authority alone owes Ghana Gas over $500 million and also each of the energy agencies made losses in 2018. Some of the reasons are huge debts by the government and also citizens fraud.
Dr Kwabena Donkor also added that aside the financial crisis that has be-deviled the energy sector, Ghanaians have gotten used to cheap hydro-electric power in the past, and are finding it difficult to adjust to more costly means of power generation.
“Hydro is the cheapest form of generation. Akosombo can generate at about 3-3.5 cents per kilowatt-hour whilst the thermal plants average generation is 12-13 cents per kilowatt-hour. At the time Akosombo was built, Akosombo was more than enough to meet our demand and so we had the cheapest cost of generation, he explained.
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The Pru East MP further stated that getting Ghanaians to the point where they are prepared to pay more for the power they consume has been a challenge.
“Our generation mix has changed within the period…depending on which day, the peak period records 40-45 per cent generation of hydro and at other times it records 60-40 per cent of generation. If you put the generation mix into a basket, the average cost increases,” he stated.
Though average generation cost is increasing, the reluctance of Ghanaians to pay more for power, has made it very difficult to charge commercial tariffs, he explained.
Speaking in an interview with Paul Adom-Otchere on Good Evening Ghana, he identified further issues causing huge expenses in the Power sector. He stated that Ghana is currently paying $25 million a month to ENI, an Oil Exploration service provider, due to interference by government with the intention of reviewing service contract.
He continued that Ghana Gas is reeling under outstanding debts owed it by VRA (over $500 million) . Ghana Gas is now a heavy burden on GNPC who have to borrow to keep the future supply.
The former Minister added that the energy sector is distressed for finance and as such there is the need for capitalization from equity financiers in order to make Ghana become an energy efficient country.
