#2024SONA: So far, so good – Akufo-Addo touts gov’t achievements in energy sector

President Nana Addo Dankwa Akufo-Addo has touted his government’s achievements in the energy sector.
He said even in the midst of economic crisis, the government has risen to the task of keeping the lights on.
Delivering a Message on the State of the Nation to Parliament in Accra on Tuesday , February 27, 2024, the President said, “We have managed the energy sector with discipline and expertise, to avoid a repetition of the hardships inflicted on Ghanaians some years ago.”

No dumsor
Making reference to the power crisis popularly known as dumsor, that hit the nation during the Presidency of John Dramani Mahama, President Akufo-Addo said, “Mr Speaker, between 2012 and early 2017, there was nothing more demoralising than the phenomenon we called dumsor.

It was symptomatic of a dysfunctional system, and it caused widespread depression amongst businesses and households. “After that experience, my government was determined that dumsor would not be inflicted upon Ghana and Ghanaians under an NPP government, and I am glad to be able to say, so far, so good, we have managed to keep the lights on these last seven years, even in the midst of a financial crisis.”

Energy sector debt
Taking a look at energy sector debt, the President opined that through determined, skilful negotiation, the government has been able to reduce considerably the energy sector debt it inherited. “Indeed, the Government Negotiating Team carried out a successful reconciliation exercise with the IPPs and ECG, which established that the IPP arrears position was not the US$1.6 billion that had been previously reported in the media, but was actually US$1.2 billion, that is savings of some US$400 million. Additionally, the Government Negotiating Team has reached commercial agreements on headline terms for the restructuring of power purchase agreements and arrears with AKSA, Amandi, Cenpower, CENIT and Early Power, and is finalising remaining definitive documentation of such terms, which will result in total expected savings in excess of US$9.1 billion over the lifespan of the IPP projects.“

In the meantime, he said, ECG has been able to secure a fixed monthly energy purchase price with all the IPPs.
“This has led to a monthly payment of US$43 million, instead of US$77 million, that is monthly savings of US$34 million or a 44% reduction in monthly payments, a far better outcome than the “Take-Or-Pay” system we inherited.

Provision of electricity
On electricity supply , President Akufo emphasised that progress is being made. “Last year, 207 communities were connected to the grid, taking the current national electricity access rate to 88.85%. We are aiming to achieve universal access this year, by connecting an additional 400 communities to the national grid under the Self-Help Electrification Programme (SHEP) and other Turnkey Projects.”

He added: “As part of efforts to improve power system reliability in the middle and northern parts of Ghana, Government took a decision to relocate the 250MW Ameri Plant from Aboadze to Anwomaso in Kumasi. The Volta River Authority (VRA) has successfully relocated six Units of the Ameri Plant, with capacity of 150MW which are currently being tested and commissioned in Kumasi. The Authority is taking steps to relocate the remaining four units before the end of the year.”

Renewable energy
The President indicated that steady progress is also being made to increase the component of renewable energy to the energy generation mix. “A four-megawatt floating solar PV on the Bui Reservoir, as well as the 15MW solar PV at Kaleo, have been completed and are both operational. They have contributed to increasing our share of solar energy to the generation mix to 3.2% . A 100MW solar PV under is under construction at Bui, as is the Mini-grid Electrification Programme ongoing in the Ada East District, all of which will help us attain our target of 10% renewable energy in our generation mix by 2030.”

Furthermore, he said the government has committed itself to the development of nuclear energy for peaceful purposes. “As I indicated at the US-Africa Nuclear Energy Summit and the International Framework for Nuclear Energy Co-operation (IFNEC) Ministerial Conference, held in Accra in November last year, the first of its kind in Africa, our energy transition plan envisages 30% of our electricity production to be from nuclear energy by 2070,” he said.

Gold for Oil
President Akufo-Addo said the Gold for Oil Programme has worked well, and had reduced significantly forex pressures on bulk energy storage, transportation and bulk imports, distribution and export companies, and enabled them to negotiate more competitive premiums with suppliers. “Premiums dropped from $180-200/MT $70/MT or less. This also resulted in reduced and stabilized prices at the pumps of between GHc12-13 per litre for the whole of 2023,” he stated.

Local participation
Touching on local participation in the oil and gas sector, the President said last year, 150 young Ghanaians were trained and certified as mechanical maintenance technicians, electrical technicians, instrumentation technicians and production process technicians up to the industry standards. Additionally, five young Ghanaians underwent a ten-month welding inspector training programme at the North Alberta Institute of Technology, Canada. They have since been placed in various technical institutions in Ghana as instructors. “Ghanaians will soon fill the well-paid positions on our oil fields, because we have the trained and qualified personnel.”