Power outages: Obsolete infrastructure, weak revenue collection to blame – ACEP

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The current power outages largely result from the country’s failure to upgrade transmission infrastructure and improve revenue collection and management, the Africa Centre for Energy Policy (ACEP) has said.

Although ACEP described the distribution sector as the most significant segment of the power sector value chain for financial sustainability of the sector, it lamented that longstanding problems such as obsolete infrastructure and equipment and transmission losses have received less attention over the years, thereby paving the way for current challenges.

For example, ACEP said in 2019 system losses stood at 4.7 percent of the power generated, a 19.4 percent increase from 2018; and that by the end of the first half of 2020, the losses increased to 5.28 percent of total power generated.

Meanwhile, power distribution losses of 26.63 percent were 3.43 percent higher than the regulatory benchmark of 23.2 percent in Q1 of 2020.

These losses, coupled with weak revenue collection and management, make it impossible for state-owned power transmitter Ghana Grid Company (GRIDCo) to adequately invest in upgrading infrastructure and equipment.

“Transmission losses in particular have been a consistent and recurrent challenge to the transmission system over the years.

“Overaged and weak transmission infrastructure and inadequate available transfer capacity to meet demand requirements of major load centres are some of the lingering issues,” it said in a release titled Power sector priorities for government’s action.

These challenges, the energy think-tank explained, have resulted in the grid’s inability to recover quickly after major system disturbances.

Need for investment

To resolve the current challenges, ACEP says significant investments are required to expand, add to and upgrade the transmission system.

“The recent nationwide system collapse is a wake-up call for the needed investments,” it said, noting that the sustainability of GRIDCo depends on a reformed power sector that pays for the investments in transmission for the sector.

It also believes that the fiscal position of government makes it difficult for the budget to continue sustaining investments in the transmission system, hence the need for reforms to make the sector self-sustaining.

In the interim, it said, some portions of the Energy Sector Levy Act (ESLA) proceeds should be made available for investment in critical equipment of the transmission system.

“Ongoing upgrade-work should be expedited to relieve power consumers of the frequent outages and low voltage currently being experienced,” ACEP further noted.

SOURCE By Thomas-Moore ADINGO ([email protected])
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