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PPAS to yield Ghana an estimated saving of USD 7,217 billion over 13 year period

The Minister of Energy, Boakye Agyarko has revealed that some Power Purchase Agreements put together is estimated to yield an amount of 7,217 billion dollars over a 13-year period.

November 17, 2017

The Minister of Energy, Boakye Agyarko has revealed that some Power Purchase Agreements put together is estimated to yield an amount of 7,217 billion dollars over a 13-year period.

He made the disclosure in an answer to a question posed to him by the Ranking Member of the Energy Committee in Parliament, Adam Mutakwakilu about whether the Ministry of Energy has reviewed any power purchase agreements in force and if so, whether there are any cost saving elements pursuant to the review.

According to the Energy Minister, his ministry tasked a committee led by the Energy Commission to review all PPAs signed by the Electricity Company of Ghana (ECG) Limited for conventional thermal power projects. He informed the August House that the committee reviewed 26 out of 30 PPAs ECG had initiated. He said the combined generation capacity of the 26 PPAs reviewed amounted to 7,298MW.

He noted the projected capacity additions from the PPAs were far in excess of the required additions inclusive of a 20% system reserve margin from 2018 to 2030 and would result in the payment of capacity charges for the underpitched plants.

Boakye Agyarko stressed that the committee recommended that i.  4 PPAs with a combined capacity of 1,810MW be deferred to 2018 – 2025 ii.  3 PPAs with the combined capacity of 1,150MW be deferred beyond 2025, iii. 11 PPAs with a combined capacity of 2,808MW be terminated and the remaining he told the house is to proceed without modification.

He further indicated that pursuant to the review exercise, the Government stands to make significant savings from the deferment and or termination of the reviewed PPAs.  He disclosed therefore that the estimated cost for the terminations is 402.39 million dollars, competed to an average annual capacity cost of 586 million dollars each year or a cumulative cost of 7, 619 billion dollars from 2018 – 2030. This the Sector Minister said yields an estimated saving of 7,217 billion dollars over the 13

 

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