Edward Bawa, a Member of Parliament’s Mines and Energy Committee, has refuted speculations made by the ruling New Patriotic Party (NPP) regarding the energy sector debt in Ghana.
He clarified that the country has not reached a point where it needs to pay for excess capacity.
Mr. Bawa stated that since 2001, Ghana has never experienced a situation where its available capacity reached 3,700 megawatts.
He further explained that considering the government’s peak demand of around 3,480 megawatts and the fact that the available capacity falls below that level, it indicates that the country has never had to incur capacity charges.
The committee member defined excess capacity as when the power generator declares availability, but the off-taker (the entity purchasing the electricity) is unable to utilize it.
He emphasized that there have been no instances where availability was declared, but the off-taker was unable to access the power.
“If you look at between 2001 to today, I tell you that to a very large extent, we have actually not gotten to a state where we have to pay excess capacity. If you look from 2001 to 2003 as we speak now, we have not had a situation where our available capacity had gone up to 3,700.
“So if you have a situation where your available capacity is not up to 3,700 and your peak demand is around 3,480, taking into consideration that you also need redundancy in your system, what it simply means is that we have not had the occasion to pay capacity charges,” he said on JoyNews’ Newsfile on Saturday.
Mr. Bawa therefore said that there is room to believe that the government has not been transparent in its argument on the capacity charges, warning that until there’s transparency the challenges facing the energy sector will persist.
Ghana’s energy sector is facing a debt crisis. The NPP has accused the NDC of signing some harsh Power Purchase Agreements which have become a burden on them.
Country Director for World Bank, Piere Laporte also made the same claim while speaking on the debt crisis bedeviling the sector.
The NDC has argued that even the NPP MPs at the time the PPAs were signed also appended their signatures to the same measure.
In 2021, Finance Minister, Ken Ofori-Atta while before parliament disclosed that the government paid a total of $937.5 million to independent power producers (IPP) for excess capacity charges between 2017 and 2020.
The total debt owed IPPs presently hovers around $1.58 billion. The power producers have also rejected a proposal from the government to restructure the debt.