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GRIDCo: Ghana’s backbone to power delivery

Interview - September 18, 2014
The PM Communications team interviewed Ing. William Amuna, CEO of GRIDCo, and asked him about the prospects for the power sector in Ghana. Ing. Amuna said that when locally generated gas comes on-stream it would make many thermal plants more efficient and reliable, while GRIDCo has plans for more investment in the transmission network to ensure it has the infrastructure and facilities in place to evacuate increasing generation in the years to come.
ING. WILLIAM AMUNA, CEO OF GRIDCO
ING. WILLIAM AMUNA | CEO OF GRIDCO
Ghana is participating in the Global African Investment Summit in London this October alongside Uganda, Rwanda, Tanzania and Togo. More than 30 bankable projects will be on the table in power, natural resources, infrastructure and agribusiness. What is the return profile for investors in power here in Ghana? Why should they invest in power here and not elsewhere on the continent?

Ghana’s electricity penetration is among the highest in the region. This is as a result of policies adopted by the Ghanaian government, especially rural electrification. The demand for electricity in Ghana grows about 12% annually. That is very high, and it means that at least 200 megawatts of additional generation is required every year. Ghana is a developing country and the investment for this additional capacity cannot be generated locally. This calls for large-scale foreign investment.

In addition to this, Ghana’s transmission network is linked to other countries in the region by the West Africa Power Pool. We are linked to Ivory Coast and by extension, Burkina Faso. On the east, we are linked to Togo and Benin. There are plans in place to extend interconnection to Nigeria. If you invest in Ghana, you have the potential to export power to any part of the sub-region. Ghana is therefore the ideal destination for power investment.

Ghana experienced severe power shortages last year. Just last week, you were attributing partial load shedding to the unreliability of the gas supply from Nigeria. Ghana’s Atuabo Gas Project is expected to finally come on-stream this year. When ready, what impact will the Atuabo Gas Project have on the reliability of Ghana’s power supply and its energy independence from Nigeria?

There are certain power plants in Ghana that run on gas only, so disruption in the supply has a detrimental impact on reliability of power supply in the country. For the past few weeks, gas supply from Nigeria has been erratic. There are so many competitors for Nigerian gas, made up of the Nigerian local market as well as Togo and Benin.

When we have the gas available from Ghana, we would allocate it directly to our power plants, especially in the Western region. Gas production will also generate savings because of decreased fuel costs. The savings can be used to build more generating plants and also invest in systems that will result in improved reliability of the power system. The other advantage is that thermal plants that run solely on natural gas have higher availabilities due to reduced outages.

But it won’t make Ghana fully independent from Nigerian gas?

Despite domestic gas generation, we will still rely on gas from Nigeria. Not all the plants here in Ghana can be supplied fully by Ghana gas, especially because we will have additional generation in the years ahead. We have received commitments for an additional 2,000 megawatts from many companies with the intension of setting up new power plants in the Western region. Currently, volumes of locally generated gas will not be enough for supply to the new power plants so we are hoping there will be bigger finds. We will still be dependent on gas from Nigeria, but our local gas supply can ensure that some of our plants will always be operational.

This month Ghana signed the Millennium Challenge Compact II with the US government. Up to $498.2 million will be invested to support the transformation of Ghana’s electricity sector. The five-year compact is designed to create a self-sustaining energy sector in Ghana and be the catalyst for more than $4 billion in private energy investment. As part of the compact, Ghana has a set of reform targets it must achieve. What is the role of GRIDCo in helping Ghana to achieve the necessary reforms and attract this $4 billion in private energy investment?

As part of this, the Electricity Company of Ghana is supposed to settle all of its debts. We are going to capitalize on that. Once we are able to recover all our revenue from the ECG, we will use that to invest in the major projects we have lined up. Between Tema and Accra we have a number of overloaded lines that need to be upgraded, as well as new line segments constructed, in order to improve the reliability of electricity supply to Tema and Accra.

Several other projects have also been planned across the country to ensure that we have a robust transmission system. One of GRIDCo’s strategic objectives is to ensure that we develop the transmission infrastructure so it is capable of evacuating any new generation to the various load centers. We don’t want a situation whereby new power plants are ready but can’t be evacuated. We are therefore seeking funding from various sources to ensure that we expand the system to meet increased supply and demand.

Power plant developer Fred Asamany said recently that Ghana needs about 12,500 megawatts of electricity to fully industrialize. Currently, the country has an installed capacity of only 2,884 MW, with the current production at around 1,313 megawatts. In light of this, does the MCC go far enough in tackling Ghana’s power needs, given its goal to become an upper-middle income country over the next few years?

We definitely need 200 megawatts of additional generation every year, as I said earlier. One aspect of our power generation is that we have a large hydro-based portion. This is not always reliable, as rainfall patterns can change. Sometimes we expect inflows into the system that don’t come. Assuming hydro fails, we must explore other strategies.

As part of the plan, we are considering the types of generators in use and the correspondent fuel usage.

We are also interested in renewable energy, like solar. Two companies have interacted with us. These companies want to initiate very large solar projects. There would be some announcements on one of these projects soon. GRIDCo considers solar as a reliable power alternative for hydro. During the day, we can rely on solar energy, and reduce demand on the hydro generators. This is why we are amenable for solar coming into the system. When solar investors approach us, we conduct a grid impact study, to primarily access its impact on the reliability of power and also ascertain the transmission investments required, if any, for its seamless integration. We therefore welcome any investments in renewable energy, especially solar.

What role do British investors play in bringing expertise, knowledge, and capital to the power sector here in Ghana and GRIDCo in particular?

We have interacted with a number of British companies over the years in consulting and construction. In fact, some British companies are currently constructing some new substations and lines for us. We like the quality they bring to us as a country and as a company.

Earlier we spoke about bankability. Ing. Amuna you are relatively new to your position. You are tasked with leading GRIDCo into an exciting stage of its development, as power demand increases. We have spoken about the massive potential for investment in power. For Ghana’s power projects to be bankable, investors have to be confident in not only the local framework, but the local expertise, from the top down. Why should investors bank on the reliability of GRIDCo and Ing. Amuna; what makes them trust that the company tasked with transmission services is in good hands?

GRIDCo never existed until 2008. It was the transmissions department in the Volta River Authority. I am one of the most experienced transmission engineers in Ghana. I have worked as an assistant engineer, senior engineer, principal engineer and manager. Then I moved to director of technical services. I have worked in the grid system 80% of my working life. I used to be a commissioning engineer. Of all the sub-stations that were built from 1989 to 2005, I was the commissioning engineer, so I am well versed in the grid system.

Apart from that, I believe I am well-educated. I have an engineering degree, an MBA in finance and an MPA from Harvard. I’m careful about saying I went to Harvard, because people then think you can solve every problem on earth!

And I think I can build good personal relationships with people. I am a very simple person at heart, and that works to my advantage.

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