OBG talks to Charles Darku, Former CEO, GRIDCo

Interview: Charles Darku

What sorts of potential obstacles do you see for the future full implementation of the West Africa Power Pool (WAPP) project?

CHARLES DARKU: The prices of cross-border regulatory arrangements are set on historical provisions. However, these must be harmonised so that each utility does not add up in cost, minimising its competitiveness as it travels across borders. Today, power from Ghana can be sold to Senegal quite easily through the Ivorian network, which is connected to the Malian network, which in turn is connected to the Senegalese system. Basically, we have the beginnings of an entire sub-regional network, so it is imperative that cross-border trade rules along with the pricing of parts and licensing issues be resolved.

What sort of scope do you envision for improving competition in the power market? What will the future role of the private sector be?

DARKU: Our system is relatively small, so competition is not necessarily a word that applies. But we want to have more private sector participation and multiple players, which inevitably brings its own drivers for efficiency. The more we deepen the framework for the private sector to participate in both the generation side and the administration side, the better it is for the country. Demand is growing at about 8-10% annually; therefore, anyone who adds a power plant into the system would see their power easily dispatched.

The sector is maturing and regulators are strengthening their work in pricing and licensing, which means that independent power producers (IPPs) can be more confident of the regulatory framework of Ghana.

The key challenge for IPPs right now is fuel security. The rupture of the West African Gas Pipeline and the loss of gas from Nigeria have brought about some uncertainty. The good news is, however, that the local procurement of gas is progressing steadily, improving confidence for both the supply and reliability of Ghanaian gas. These should send the right message to help encourage private developers to invest in the sector.

In what way will local gas production improve the stability of electricity supply?

DARKU: Having gas from indigenous sources in sufficient quantities provides greater fuel security. Therefore the hiccups in gas supply from outside sources like Nigeria will abate. The price of gas will reduce the cost of power generation, so the network’s ability to supply a reliable source will definitely improve. Once Ghanaian gas comes onto the scene some of the challenges we see will disappear. Fuel security will also encourage investors. IPPs have shown interest in building various power plants of 400-MW capacity – a big step, as even the WAPP does not have capacity that large in Ghana.

Once there is evidence that gas is available, agreements will be signed and construction can commence.

How successful has rural electrification been?

DARKU: The government’s target is to supply 80% of the population with electricity by 2015. Efforts are moving ahead steadily. The government has raised money from the US to electrify around 35,000 villagers in middle of the country through the Kintampo substation. Moreover, we are working on three or four more substations to enhance the government’s rural distribution programme, by either taking the produced power to the countryside or improving capacities in the cities.

Interest in renewables is increasing, as well. The aggregate capacity of the potential investors already looking into Ghana is about 300-400 MW. This mostly comprises solar power, and solar installations will be built throughout various regions of the country. In 2013 the first 2 MW of solar capacity will be installed on the distribution network in the north.

Furthermore, we have been approached by the British developers Blue Energy to build 150 MW of capacity in the western region of the country, as well as interest from two separate German investments in the north for 50 MW each. If these take shape, not only will we have conventional sources of generation, but we will also be at the leading edge of renewables technology.