Sections
Poll: Ministry of Niger Delta
Do you support the recently-established ministry of Niger Delta?
West Africa Power Pool as path to regional sufficiency in energy generation
Font size:
Watching television is not something 42 year-old Asamoah Boateng, a resident of Adabraka in Accra, likes to do all the time, but in the last two weeks, he has become an addict of a sort. Reason – the just-concluded Africa Nations soccer tournament, which Ghana hosted.
Asamoah is a football enthusiast who is not apologetic about his support for Black Stars, Ghana’s national team. Benice, his wife, isn’t as fanatic as Asamoah but she joins him to watch the Black Stars whenever they are playing. However, despite the fact that Ghana is hosting the Nations Cup, Benice hasn’t watched any of the matches.
“I would have watched the matches if my television was working. But it’s damaged and we haven’t got money to repair or replace it and I can’t go to watch it in the bar that my husband goes; so I just stay at home and let him tell me the result after every match,” Benice explains.
Her family television set got damaged sometime in July last year in the heat of Ghana’s severe energy crisis. “It was on when the light went off. The kids didn’t remember to switch it off either. When light was restored hours later, it came with a high voltage that damaged the telly”. Also damaged was the family refrigerator. Today, the two appliances serve the family no purpose though they occupy conspicuous space in their one-room apartment.
For Benice, the biggest impact of the damage is not the viewing pleasure it has denied her but her ice-block business that has been put on hold as a result of the refrigerator not functioning. She used to sell ice-blocks to ‘pure’ water vendors. The small home business gives her the equivalent of $5 to $8 daily. She can’t wait to see the family refrigerator functioning again.
Power cuts in Africa is a continent-wide problem that affects the big and the small, the rich and the poor. As African economies grow and develop, their need for electricity has increased dramatically and under-resourced utility companies are struggling to meet rising demand from consumers.
South Africa is the continent’s biggest producer of electricity as well as its largest consumer. For more than a year, businesses and householders in some parts of the country have become accustomed to intermittent outages stemming primarily from the government’s failure in the last decade to plan for growing electricity demand.
As the Financial Times recently reported, the state electricity company, Eskom, has warned investors not to plan big new projects until 2013, when new power stations are expected to be on stream. Bongani Nqwababa, Eskom’s finance director in a recent media chat, said South Africa should not accept big new industrial projects until a 4,800 megawatt coal-fired station is ready.
Eskom’s reserve margin hovers above 4 per cent against the international norm of at least 15 per cent. For South Africa, this is an extraordinary reversal. At present, it produces 39,000 megawatts of electricity through its coal-fired and nuclear power plants. That’s just eight percent over the peak demand.
According to reports, power cuts last month rolled across Johannesburg, because colder temperatures prompted many South Africans to turn on their electric heaters. A combination of government failure to anticipate increased demand and dithering over whether to privatize Eskom and what sort of power stations to build have primed the crisis.
Many businesses in the country now have to plan costly contingency measures. To mitigate the crisis, mining companies have in recent times, negotiated load-shedding deals with Eskom whereby they receive special rates in return for committing to agreed dates on which to carry out most power-intensive operations at off-peak times.
The situation in South Africa, apart from being a recent phenomenon, is in many ways a child’s play compared to the chaos that is prevailent in most West African countries.
In Nigeria, virtually all businesses and many residents run private generators to supplement faltering public service, saddling the economy with added costs and worsening pollution. Most times, these generators are the main source of electricity while the Power Holding Company of Nigeria (PHCN), the public utility, is the stand-by.
The managing director of the Nigerian Security Printing and Minting Company (NSPMC), Ehi Okoyomon, made some startling revelations earlier in January when he told members of the House of Representatives Committee on Banking and Currency that the company spent N420 million in 2007 to rent generators for its Lagos and Abuja offices.
According to him, NSPMC hired generators at N11 million and N9 million monthly for the two offices in addition to the payment of N5 million and N9 million as monthly bills to PHCN. Ironically, Okoyomon said the company’s generating sets packed up last year and the cost of repairing them was huge.
The erratic power situation in Nigeria is increasingly becoming another major source of huge leakage of public fund. Nigerians are still trying to come to terms with the revelation that the Obasanjo administration spent over $10 billion in the power sector within its eight years in power, without anything to show for it.
Available statistics indicate that Nigeria currently have a generating capacity of about 6,000 megawatts but actually generates less than 3,000 megawatts for a population of 140 million. With an installed capacity of 18,000 megawatts, Malaysia, a country of 25 million people, slightly above Ghana’s population, has three times the installed capacity of Nigeria.
Given its dream of becoming one of the top 20 economies in 2020, experts say Nigeria should be targeting a power generation capacity of at least 10,000 megawatts by 2015, the year that world leaders have set as deadline for halving global poverty. Should the country reach that target, it will have enough energy to export to its neighbours.
Since August 2006, Ghana’s hydro-dependent power sector has had a particularly hard time meeting local demand as water levels in Lake Volta hit an all time low. In March 2007, the Volta Aluminum Company was forced to close its factory at Tema because of power outage after an earlier three-year shutdown caused by previous power crisis.
One of the matches played in Secondi at the Africa Nations football tournament was delayed for almost 30 minutes after the lights in the stadium went off before the commencement. The government had earlier bought two giant generators each for the four stadia used but on this occasion, the generators developed fault.
Ghana’s national energy demand is estimated at 1,800 megawatt. The country’s currently generates about 1,000 megawatt although the government is planning to increase that to 5,000 by 2015. With the Bui Dam project and another dam planned for Pra River, the 5,000 anticipated capacity is not an unrealistic dream.
All over the subregion, efforts are being made to grow present national generating capacities. However, as West Africa continues to grapple with its chronic supply problems, some countries are beginning to share the much they generate at the moment. The Manantali dam in Mali supplies Mauritania and Senegal in addition to catering for local demand. The West Africa Gas Pipeline (WAGP) which delivered its first volume of gas from Nigeria to Tema last December is part of a bigger regional scheme in Economic Community of West African States (ECOWAS). The scheme known as the West Africa Power Pool (WAPP) is planned as a joint power pooling mechanism to help integrate the various national power systems into a unified electricity market.
WAGP is expected to be a feeder project for WAPP which benefits are expected to be spread to the whole Gulf of Guinea in the long term. It is hoped that WAPP would assure the subregion with a stable and reliable electricity supply at affordable costs by creating a subregional energy trade and cross-border exchange between national utilities.
The ECOWAS vision is to develop and put in place a “cooperative power pooling mechanism” with a view that such mechanism would reduce the subregion’s vulnerability to drought –induced power supply disruptions, diversify supply sources and spur on economic growth. Other key objectives include:
-Assure national power utilities of mutual assistance to avoid a subregional power system collapse, or in the latter case, rapid restoration of internconnected regional power.
-Foster subregional economic and political integration that would support economic growth, base on reliable, continuous quality electricity service.
The World Bank Group under its Regional Integration Assistance Strategy (RIAS) for West Africa is providing its technical and financial support for WAPP. The bank will provide financial risk mitigation to allow the project proceed. It will also support the implementation of subregional and national frameworks and actions required for the long-term sustainability of the project.
Deo Ndikumana, Senior Operational Officer, Regional Integration of the bank, in a chat with BusinessDay in Accra, stated that the components of such subregional distribution platform is being strengthened through three distinct but mutually reinforcing infrastructure development projects. The projects are the 330kV Coastal Transmission Backbone, the OMVS/OMVG Power System Development project and the 225kV Inter-zonal Transmission Hub.
WAPP is an emerging partnership whose membership is open to any power (public and private) utility that operates in any ECOWAS country. Other financing partners aside the World Bank are the Africa Development Bank (AfDB), the Kuwait Fund for Arab Economic Development, the European Union and the Bank for West Africa (BOAD). The United States Agency for International Development (USAID) and the Agence Franciase de Developpment (AFD) are also supporting the project.
With oil prices soaring, some West African countries are looking at following South Africa’s lead in generating nuclear power by building reactors. Ghana is one of such countries. In the wake of Ghana’s energy crisis last year, President John Kufuor set up a Nuclear Power Committee to prepare pre-feasibility studies on the country’s chances of expanding its power generation by including nuclear energy in 2018. Daniel Adjei Bekoe, chairman of the committee while submitting reports to Kufuor, told the president that the period could be shortened if adequate resources were made available on timely basis to the appropriate bodies.
Experts say no single solution suits all of West Africa’s needs and with annual growth rates of six percent in some of its countries, the subregion will need to go on a monumental building spree of power plants to meet the growing energy needs of its citizens. While that is important, most energy consultants believe the best answer remains cooperation on regional power solutions – reason they say the subregional power pool project is crucial in the long run.
The World Bank says its financing of power projects in sub-Saharan Africa is ballooning, from $250 million six years ago to $660 million in 2006 to $1 billion last year. But many plans remain at just that – detailed paper projections. Issues like credit worthiness, lax regulation, domestic politics and the sheer difficulty of sending power over rundown grids to the customer make outside investments in power stations tougher than they appear.
However, despite its support for WAPP, the World Bank Group has launched another initiative tagged “Lighting African”. It is a continental programme which the group says is aimed at providing up to 250 million people in Sub-Saharan Africa with access to non-fossil fuel based, low cost, safe, and reliable lighting products with associated basic energy services by the year 2030.
“The majority of Africa relies on traditional lighting sources such as biomass, candles, and kerosene to satisfy their lighting needs. Of these, as many as 500 million people use fuel-based products such as kerosene wick lamps to meet their basic lighting needs. Yet, while these products consume a large share of their scarce income, users receive little in return”, the bank noted in a release detailing the project.
Officials of the bank at the Accra office, say it is designed to contribute to the Millennium Development Goals (MDGs) by reducing poverty and enhancing quality of life. The pilot phase now includes Tanzania and Zambia in addition to Kenya and Ghana, but the project design and implementation strategy are intended for replication across Africa and beyond.
Ghana will be hosting the first global business off-grid lighting in May this year. The conference is designed for investors, financiers, private firms, end users, and development agencies to showcase and expand business opportunities targeting low income populations in Sub-Saharan Africa.
With the power crisis in West Africa not letting up, Ghana says, it is determined to curb the prevailing culture of energy wastage while waiting for big projects like WAPP to take shape. The country last year imported about 2 million pieces of compact fluorescent lamps (CFL) whose consumption of electricity is six times lower than the incandescent bulbs, popularly called the onion bulbs, that most consumers use. The bulbs were distributed free to the public.
In the offices of Ghana’s Ministry of Energy, posters encourage people to save energy. “Conserving energy is the best way to deal with this crisis,” says the sector minister Joseph Adda who stressed that Ghana “expects to save up to 200 mw of energy through this approach.”
According to an official of the Volta River Authority, “the purpose of the new bulbs is to make people use energy more efficiently. It is feasible that there can be up to 8 to 10 per cent energy savings without affecting industrial production while also speeding up efforts at the various new projects.”
Asamoah is a football enthusiast who is not apologetic about his support for Black Stars, Ghana’s national team. Benice, his wife, isn’t as fanatic as Asamoah but she joins him to watch the Black Stars whenever they are playing. However, despite the fact that Ghana is hosting the Nations Cup, Benice hasn’t watched any of the matches.
“I would have watched the matches if my television was working. But it’s damaged and we haven’t got money to repair or replace it and I can’t go to watch it in the bar that my husband goes; so I just stay at home and let him tell me the result after every match,” Benice explains.
Her family television set got damaged sometime in July last year in the heat of Ghana’s severe energy crisis. “It was on when the light went off. The kids didn’t remember to switch it off either. When light was restored hours later, it came with a high voltage that damaged the telly”. Also damaged was the family refrigerator. Today, the two appliances serve the family no purpose though they occupy conspicuous space in their one-room apartment.
For Benice, the biggest impact of the damage is not the viewing pleasure it has denied her but her ice-block business that has been put on hold as a result of the refrigerator not functioning. She used to sell ice-blocks to ‘pure’ water vendors. The small home business gives her the equivalent of $5 to $8 daily. She can’t wait to see the family refrigerator functioning again.
Power cuts in Africa is a continent-wide problem that affects the big and the small, the rich and the poor. As African economies grow and develop, their need for electricity has increased dramatically and under-resourced utility companies are struggling to meet rising demand from consumers.
South Africa is the continent’s biggest producer of electricity as well as its largest consumer. For more than a year, businesses and householders in some parts of the country have become accustomed to intermittent outages stemming primarily from the government’s failure in the last decade to plan for growing electricity demand.
As the Financial Times recently reported, the state electricity company, Eskom, has warned investors not to plan big new projects until 2013, when new power stations are expected to be on stream. Bongani Nqwababa, Eskom’s finance director in a recent media chat, said South Africa should not accept big new industrial projects until a 4,800 megawatt coal-fired station is ready.
Eskom’s reserve margin hovers above 4 per cent against the international norm of at least 15 per cent. For South Africa, this is an extraordinary reversal. At present, it produces 39,000 megawatts of electricity through its coal-fired and nuclear power plants. That’s just eight percent over the peak demand.
According to reports, power cuts last month rolled across Johannesburg, because colder temperatures prompted many South Africans to turn on their electric heaters. A combination of government failure to anticipate increased demand and dithering over whether to privatize Eskom and what sort of power stations to build have primed the crisis.
Many businesses in the country now have to plan costly contingency measures. To mitigate the crisis, mining companies have in recent times, negotiated load-shedding deals with Eskom whereby they receive special rates in return for committing to agreed dates on which to carry out most power-intensive operations at off-peak times.
The situation in South Africa, apart from being a recent phenomenon, is in many ways a child’s play compared to the chaos that is prevailent in most West African countries.
In Nigeria, virtually all businesses and many residents run private generators to supplement faltering public service, saddling the economy with added costs and worsening pollution. Most times, these generators are the main source of electricity while the Power Holding Company of Nigeria (PHCN), the public utility, is the stand-by.
The managing director of the Nigerian Security Printing and Minting Company (NSPMC), Ehi Okoyomon, made some startling revelations earlier in January when he told members of the House of Representatives Committee on Banking and Currency that the company spent N420 million in 2007 to rent generators for its Lagos and Abuja offices.
According to him, NSPMC hired generators at N11 million and N9 million monthly for the two offices in addition to the payment of N5 million and N9 million as monthly bills to PHCN. Ironically, Okoyomon said the company’s generating sets packed up last year and the cost of repairing them was huge.
The erratic power situation in Nigeria is increasingly becoming another major source of huge leakage of public fund. Nigerians are still trying to come to terms with the revelation that the Obasanjo administration spent over $10 billion in the power sector within its eight years in power, without anything to show for it.
Available statistics indicate that Nigeria currently have a generating capacity of about 6,000 megawatts but actually generates less than 3,000 megawatts for a population of 140 million. With an installed capacity of 18,000 megawatts, Malaysia, a country of 25 million people, slightly above Ghana’s population, has three times the installed capacity of Nigeria.
Given its dream of becoming one of the top 20 economies in 2020, experts say Nigeria should be targeting a power generation capacity of at least 10,000 megawatts by 2015, the year that world leaders have set as deadline for halving global poverty. Should the country reach that target, it will have enough energy to export to its neighbours.
Since August 2006, Ghana’s hydro-dependent power sector has had a particularly hard time meeting local demand as water levels in Lake Volta hit an all time low. In March 2007, the Volta Aluminum Company was forced to close its factory at Tema because of power outage after an earlier three-year shutdown caused by previous power crisis.
One of the matches played in Secondi at the Africa Nations football tournament was delayed for almost 30 minutes after the lights in the stadium went off before the commencement. The government had earlier bought two giant generators each for the four stadia used but on this occasion, the generators developed fault.
Ghana’s national energy demand is estimated at 1,800 megawatt. The country’s currently generates about 1,000 megawatt although the government is planning to increase that to 5,000 by 2015. With the Bui Dam project and another dam planned for Pra River, the 5,000 anticipated capacity is not an unrealistic dream.
All over the subregion, efforts are being made to grow present national generating capacities. However, as West Africa continues to grapple with its chronic supply problems, some countries are beginning to share the much they generate at the moment. The Manantali dam in Mali supplies Mauritania and Senegal in addition to catering for local demand. The West Africa Gas Pipeline (WAGP) which delivered its first volume of gas from Nigeria to Tema last December is part of a bigger regional scheme in Economic Community of West African States (ECOWAS). The scheme known as the West Africa Power Pool (WAPP) is planned as a joint power pooling mechanism to help integrate the various national power systems into a unified electricity market.
WAGP is expected to be a feeder project for WAPP which benefits are expected to be spread to the whole Gulf of Guinea in the long term. It is hoped that WAPP would assure the subregion with a stable and reliable electricity supply at affordable costs by creating a subregional energy trade and cross-border exchange between national utilities.
The ECOWAS vision is to develop and put in place a “cooperative power pooling mechanism” with a view that such mechanism would reduce the subregion’s vulnerability to drought –induced power supply disruptions, diversify supply sources and spur on economic growth. Other key objectives include:
-Assure national power utilities of mutual assistance to avoid a subregional power system collapse, or in the latter case, rapid restoration of internconnected regional power.
-Foster subregional economic and political integration that would support economic growth, base on reliable, continuous quality electricity service.
The World Bank Group under its Regional Integration Assistance Strategy (RIAS) for West Africa is providing its technical and financial support for WAPP. The bank will provide financial risk mitigation to allow the project proceed. It will also support the implementation of subregional and national frameworks and actions required for the long-term sustainability of the project.
Deo Ndikumana, Senior Operational Officer, Regional Integration of the bank, in a chat with BusinessDay in Accra, stated that the components of such subregional distribution platform is being strengthened through three distinct but mutually reinforcing infrastructure development projects. The projects are the 330kV Coastal Transmission Backbone, the OMVS/OMVG Power System Development project and the 225kV Inter-zonal Transmission Hub.
WAPP is an emerging partnership whose membership is open to any power (public and private) utility that operates in any ECOWAS country. Other financing partners aside the World Bank are the Africa Development Bank (AfDB), the Kuwait Fund for Arab Economic Development, the European Union and the Bank for West Africa (BOAD). The United States Agency for International Development (USAID) and the Agence Franciase de Developpment (AFD) are also supporting the project.
With oil prices soaring, some West African countries are looking at following South Africa’s lead in generating nuclear power by building reactors. Ghana is one of such countries. In the wake of Ghana’s energy crisis last year, President John Kufuor set up a Nuclear Power Committee to prepare pre-feasibility studies on the country’s chances of expanding its power generation by including nuclear energy in 2018. Daniel Adjei Bekoe, chairman of the committee while submitting reports to Kufuor, told the president that the period could be shortened if adequate resources were made available on timely basis to the appropriate bodies.
Experts say no single solution suits all of West Africa’s needs and with annual growth rates of six percent in some of its countries, the subregion will need to go on a monumental building spree of power plants to meet the growing energy needs of its citizens. While that is important, most energy consultants believe the best answer remains cooperation on regional power solutions – reason they say the subregional power pool project is crucial in the long run.
The World Bank says its financing of power projects in sub-Saharan Africa is ballooning, from $250 million six years ago to $660 million in 2006 to $1 billion last year. But many plans remain at just that – detailed paper projections. Issues like credit worthiness, lax regulation, domestic politics and the sheer difficulty of sending power over rundown grids to the customer make outside investments in power stations tougher than they appear.
However, despite its support for WAPP, the World Bank Group has launched another initiative tagged “Lighting African”. It is a continental programme which the group says is aimed at providing up to 250 million people in Sub-Saharan Africa with access to non-fossil fuel based, low cost, safe, and reliable lighting products with associated basic energy services by the year 2030.
“The majority of Africa relies on traditional lighting sources such as biomass, candles, and kerosene to satisfy their lighting needs. Of these, as many as 500 million people use fuel-based products such as kerosene wick lamps to meet their basic lighting needs. Yet, while these products consume a large share of their scarce income, users receive little in return”, the bank noted in a release detailing the project.
Officials of the bank at the Accra office, say it is designed to contribute to the Millennium Development Goals (MDGs) by reducing poverty and enhancing quality of life. The pilot phase now includes Tanzania and Zambia in addition to Kenya and Ghana, but the project design and implementation strategy are intended for replication across Africa and beyond.
Ghana will be hosting the first global business off-grid lighting in May this year. The conference is designed for investors, financiers, private firms, end users, and development agencies to showcase and expand business opportunities targeting low income populations in Sub-Saharan Africa.
With the power crisis in West Africa not letting up, Ghana says, it is determined to curb the prevailing culture of energy wastage while waiting for big projects like WAPP to take shape. The country last year imported about 2 million pieces of compact fluorescent lamps (CFL) whose consumption of electricity is six times lower than the incandescent bulbs, popularly called the onion bulbs, that most consumers use. The bulbs were distributed free to the public.
In the offices of Ghana’s Ministry of Energy, posters encourage people to save energy. “Conserving energy is the best way to deal with this crisis,” says the sector minister Joseph Adda who stressed that Ghana “expects to save up to 200 mw of energy through this approach.”
According to an official of the Volta River Authority, “the purpose of the new bulbs is to make people use energy more efficiently. It is feasible that there can be up to 8 to 10 per cent energy savings without affecting industrial production while also speeding up efforts at the various new projects.”
Add to:
del.icio.us |
Digg
del.icio.us |
Digg
Email to a friend
Print version
Plain text
Comments ( posted):
Post your comment