Jonathan Amoako-Baah, CEO, Ghana Grid Company (GRIDCo): Interview

Interview: Jonathan Amoako-Baah

In your opinion, what role would Ghana play in a subregional electricity market?

JONATHAN AMOAKO-BAAH: The country is a member of the rapidly expanding West African Power Pool (WAPP) and is well positioned to be a major participant in the subregional electricity market. However, the level of interconnection with key players such as Côte d’Ivoire, Burkina Faso and Togo, present potential challenges that need to be addressed through collaboration and contractual clarity. The current market conditions in Ghana and its bilateral contractual arrangements can be shared within the subregional context to promote a reasonable degree of standardisation. To this end, GRIDCo is playing a leading role in working with relevant players and institutions, such as the Energy Commission of Ghana and other grid participants, in order to develop a comprehensive working paper on the market rules that govern electricity transactions. This will contribute to the accelerated establishment of the wholesale electricity market, which will drive down tariffs, benefit customers and make us competitive across the subregion.

How would you assess the current state of the transmission network in the country?

AMOAKO-BAAH: Over the past few years, several investments in the transmission network aimed to improve its reliability and stability. As the system operator, the quality of supply has also been a priority for GRIDCo, and the company has also led the implementation of improvements on that side. For example, capacity banks have been installed in low-voltage areas or in areas with static, in order to bring stability to the system, and reactors for areas with higher voltage have also been implemented with the objective of promoting balance in the system. These initiatives have already been recognised on a local and regional level, as well as by different industries. The availability of funds has created some constraints and not all projects in the pipeline have been executed. As a result, ensuring an adequate flow of funds is a challenge, and a critical priority with regard to the grid’s future expansion and maintenance.

How will the transmission and distribution segment achieve long-term financial sustainability?

AMOAKO-BAAH: Initiatives such as the cash waterfall mechanism can help inject some dynamism into the segment once they are fully operational, since they will help rationalise the administration and supply much-needed funds to utilities across the board. We are also seeking innovative ways of monetising our operations and we have entered into maintenance agreements with mining companies, as well as with some key partners within the WAPP, aimed at consultation and maintenance services for their capacitors, transformers and other switchyard equipment.

In the long term, an adequate level of end-user tariffs is critical for all stakeholders. In the 2018 budget, after a thorough analysis, there was a tariff revision that addressed fuel demand for energy, while still considering the costs of generation, making Ghana more internationally competitive. Both costs and reliability are critical to continue increasing Ghana’s appeal as an investment destination. This objective will be aided by the adoption of technology to increase energy efficiency, and to monitor and prevent losses. The key variables are a progressive increase in supply, continuous cost reduction and efficiency initiatives, as well as ensuring a level playing field for all producers, including essential independent power producers.

Foreign investment will also have a critical role to play in providing additional funding and expertise, and there has been clear interest from international companies, given both the improving business environment in the country, and the openness and simplicity of the technical criteria required to be part of the national interconnected transmission system.