New 1,200MW Plant Coming… But Without Transparent Tariffs, It’s Just a Dream!
A joint report that was issued by the United Nations Development Programme (UNDP) and KPMG has given its support to the government’s decision to change the source of power generation from light crude oil to locally produced natural gas. However, the report also cautions that the plan will only be successful if electricity tariffs are established in a manner that is transparent and accurately reflects the true expenses involved. According to the analysis, the switch has the potential to reduce generation costs by approximately 75 percent and increase energy security, particularly given that the government intends to rely more heavily on gas from the OCTP, Jubilee, and TEN fields and to construct a new state-owned thermal plant with a capacity of 1,200 megawatts beginning in 2026. The report emphasized that savings that are derived from the use of cheaper gas must be appropriately managed throughout the entire power sector. Additionally, it stressed that tariffs that reflect the actual cost of gas are required in order to maintain the financial stability of the GRIDCo, the Electricity Company of Ghana (ECG), and independent power producers, while simultaneously safeguarding the national budget. It called on the PURC to implement pricing structures that accurately reflect the actual expenses of manufacturing and distribution. The study also made note of the fact that ongoing work on mini-hydropower projects is supporting the goal of Ghana to diversify its energy mix. However, the study also cautioned that if the sector does not have a sound tariff system, it may end up falling back into debt and underinvestment. It further stated that transparency in the process of setting tariffs is crucial in order to ensure that the public continues to have confidence in and support for them.
