By Mabel Annang
The Africa Centre for Energy Policy (ACEP) has questioned government’s decision to extend its contract with AKSA Plant with a 15-year extension.
The AKSA power plant, which ACEP says is over-aged, has earned the company an estimated 700 million dollars for capital recovery and fixed operation and maintenance while delivering an average of 16 percent utilisation between 2017 and 2022. However, it has now been assigned a capital recovery charge of about US$750 million over the extended period.
The AKSA plants are old Watsila engines assembled by a private developer during the Dumsor period in 2015, with units from various countries, including Cyprus and Sri Lanka, procured at a cost between US$1.2 million and US$2 million per unit.
ACEP estimates that the total investment cost of the projects should not exceed US$60 million, a fact that the sector regulators are aware of.
It further questioned why both the Energy Commission and the Public Utility Regulatory Commission (PURC) approved the deal, given its potential negative impact on the power sector.
In its July report on the power sector, ACEP maintained that deploying the most efficient power plants in Ghana is crucial for long-term sustainability and prudent management of the sector to save costs and ensure reliability.
The renewed AKSA power plants, old Watsila engines assembled by a private developer in 2015, with units from various countries, including Cyprus and Sri Lanka, procured at a cost between US$1.2 million and US$2 million per unit.
The civil society group noted that the facility has been overpaid for by Ghanaians. To the extent that the current arrangement has been concluded, ACEP further argued that the posture is not only incompetent but also undermines the engineering features of new power generation systems.
Following this development, ACEP opined that inconsistencies surrounding the justification for extending these power plants necessitated a closer examination. This comes on the back of explanations from the Ministry of Energy that there is a current need for additional capacity, a position ACEP says contradicts the ongoing assertion that there is already excess capacity.
Meanwhile, it said the ECG persistently attributes the under-recoveries to this purported excess capacity:
More worryingly, it said the same AKSA projects are under scrutiny by United States government authorities for alleged bribery payments to Ghanaian government officials.
But while extending the AKSA plant, the AMERI plant, for which Ghanaians have paid the full value of US$510 million, is idling and deteriorating. ACEP fumed that the plant has been neglected under the pretext of relocation to Kumasi.
While the relocation tarries and the plant deteriorates, the pipeline to supply gas is already completed, requiring a pass-through of its cost to the public through tariffs.
Already, the Ghana National Petroleum Corporation (GNPC) is demanding a tariff adjustment to accommodate gas discounts provided to Genser – which ACEP and Imani estimate to be about US$1.5 billion over the 16-year contract period.
Again, other single-cycle plants of the Volta River Authority (VRA), like the KTPP and TTIP, require investment to convert them into combined-cycle plants to achieve better efficiency than AKSA.
However, those critical assets are wasting away while ECG and the ministry extend other power plants on a take-or-pay basis, ACEP concluded on the issue.
