Energy experts want details on renewable energy PPAs re-negotiation claims by Minister
Adnan Adams Mohammed
John Peter Amewu, Energy Minister has accused the erstwhile Mahama administration of signing a high priced Renewable Energy Power Purchasing Agreement (PPAs) of up to 2,265 Megawatts at an average price of 31 cents per kilowatt hour (kWh) between 2015 and 2016.
The Minister claimed the government was re-negotiating those PPAs. When speaking to section of pressmen in Parliament, he said, “Mahama administration was to be blame for the unnecessary imbalances in renewable energy independent power producers’ (IPPs) contracts, the current government had to intervene by re-negotiating those contracts to make sure tariffs become very competitive.”
This claim has pushed energy experts who served under the erstwhile administration to come out calling on the current energy minister to give specifics on the so-called ‘re-negotiating of renewable energy PPAs’.
“How many PPAs were? What were the key terms of these PPAs?”, Alex Mould, former GNPC and NPA CEO have asked demanding for details of the claims of Mr Amewu.
Also, the former Energy Minister, Emmanuel Armah Kofi Buah has described the Energy Minister’s comments on the re-negotiated renewable energy contracts as an “old story”, adding that the current government has made no investments in the sector.
He quizzed that; “How much investment has this government made in the area of renewable energy? That’s all the theory you heard and this theory about re-negotiation of PPAs, I’m sure you heard it from year one”.
Adding that, Mr Amewu could not pinpoint how much progress the current government had made from investing in renewable energy after the erstwhile NDC government passed the Renewable Energy Act in 2015.
“Basically, this government has aggressively failed to pursue this policy. And, so, you ask him a question, he is unable to come here to tell you how much investment they’ve made. Where we left off is where we are,” he said when commenting on the energy minister’s claim in parliament last week.
“The Renewable Energy Act has asked for us to establish the Renewable Energy Fund; where is it? The Renewable Energy Act has asked for us to establish the Renewable Energy Authority; where is it?” he queried.
The Renewable Energy Act was tabled to ensure that 10 percent of the power is produced from renewable energy sources.
“In the last budget in 2019, the investment by the government of Ghana was zero. The only investment in our budget was from the African Development Bank and other external sources: the European Union and others. In fact, the only thing that was put in this budget was that they were going to ensure that the Flagstaff House will have solar panels. Even that they couldn’t achieve it.
“The reason why we failed to achieve universal access to electricity was clear: It was because remote communities that do not have access to the national grid can only have electricity through renewable energy sources”, Mr Buah explained.
However, Mr Amewu expressed that, government has taken steps to address the challenges it inherited in the Renewable Energy sector.
He identified the signed Renewable Energy Power Purchase Agreements (PPAs) to the tune of 2,265MW with an average price of cent19/KWh, which, he said, was far above what the electricity network could accommodate, as a major challenge.
Additionally, PPAs were signed for tariffs as high as cent31/KWh more than twice the average end user tariff.
Mr Amewu made the remark when he spoke to the media in Parliament after responding to a question by Mr Frank Annoh-Dompreh, Member of Parliament (MP) for Nsawam-Adoagyiri, on the floor of the House on what the Ministry of Energy had done by way of investment in renewable energy for the past one year.
He indicated that, government had reduced the capacities from 2,265MW to 515MW, which could be accommodated within the country’s electricity network. The Ministry had put a moratorium on new PPAs until the 515MW signed PPAs have been executed.
It has re-negotiated and reduced the Price/KWh from an average of cent19/19KWh to cent12/KWh; and further engagement with scheduled PPAs is ongoing to achieve tariffs below cent10/KWh, which is the Ministry’s ultimate goal and also developed a Renewable Energy Master Plan, which clearly provided the capacity and investment required on yearly basis.
He said the Government had introduced competitive bidding process for renewable energy projects with focus on Utility Scale Solar power plants.
Mr Amewu explained that, besides the investment by IPPs in the renewable energy sector, the Ministry was also facilitating investment by government in projects such as the construction of the first phase of 17MW Solar Park by VRA in Lawra and Kaleo in the Upper West Region at a cost of US$25.3 million.
The rest include the construction of the Pwalugu Multipurpose hybrid (50MW Solar and 60MW hydro) project as well as the construction of the first phase of 50MW Solar PV plant to be hybridised with the 400MW BPA hydro power plant, which had commenced at a cost of US$48.
He said 10MW of solar power was expected to be connected to the national grid by the end of this quarter and the remaining 40MW is expected to be completed in November 2020.