MP urges govt to re-examine stance on ‘take or pay contract’

Dr Kwabena Donkor, Member of Parliament (MP) for Pru East, in the Bono Region, has asked government to re-examine its description of excess energy capacity as an albatross, because of the ‘take or pay contract’.

He said that argument could not stand in the face of the pro-active measures being undertaken to woo Foreign Direct Investment (FDI), and the government’s flagship programmes, particularly, the One District, One Factory policy, which called for additional energy requirement.

Dr Donkor, former Energy Minister, who was contributing to the debate on the 2020 Budget Statement, which on Tuesday focused on Energy and Mines policies, advised that, the time to boost electricity generation and maintain the excess capacity was now, since it would take years to construct a dam or thermal plants.

He said it would be prudent for government to hold on to the excess energy capacity, in wait for utilisation by factories in more than 2015 metropolitan, municipal and district assemblies.

Dr Donkor argued that currently, Volta Aluminum Company (VALCO) was operating only one pot line out of the five for lack of electricity, therefore, it would be prudent to dedicate Akosombo Dam with its cheaper operational cost to VALCO operations.

He said the trickling down effect of such a decision would have enormous economic benefits since employment would be generated directly and indirectly from the value chain line.

The MP explained that, ‘take or pay contract’, which had become herculean task for the current government, was standard in any energy industry players, since investors would want to invest in power generation without knowing the off taker for power generated.

Dr Donkor said it was as a result of that condition that many investors in the power generation sector ensured that they had ready market for generation by entering into agreement with off-taker, which in most cases happened to be Electricity Company of Ghana (ECG).

He said holding on to the excess capacity should be a challenge to government to find money to pay, whiles looking into the future with optimism in terms of generation needs.

Mr Edward Bawa, MP for Bongo Constituency, in the Upper East Region, said the government talked about excess capacity when in fact; best practice dictated that Ghana should have a spinning reserve of 540MW.

He said the spinning reserve was an ancillary service in any electricity transaction, which provides excess capacity to meet urgent and emergency requirements if called upon by the system operator.

Mr Bawa asked government to think about 14 per cent of Ghanaians, who would have not been hooked to the national grid in order to free them from poverty and enhance prosperity, by taking immediate steps to let them have access to electricity.

“I will not over-stretch VALCO’s need of 300MW to enable them increase their operations to the five pot lines so as to create the needed jobs in the integrated aluminum downstream industry,” he said.

Mr Bawa said in the present circumstances of excess capacity, the government must help Ghana Grid Company (GRICO) to complete the 330kv transmission line to Bolgatanga to enable VRA and ECG export the excess power to Burkina Faso and its environs.  

BY LAWRENCE MARKWEI                                         

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