GHANA – Ghana Grid Company Limited (GRDCo), has announced that it will be launching the first ever wholesale electricity market in Africa next year.
While delivering the news, GRDCo’s chief executive officer, Mr Jonathan Amoako-Baah, said that the move will allow for the cost of electricity to determined by market forces rather than fixed levelized costs and marginal pricing.
He said this while speaking at the opening ceremony of the 2019 AFRICON hosted by the Institute of Electrical and Electronics Engineers (IEEE), in September 2019 at the Ghana Institute of Management and Public Administration (GIMPA).
Mr. Amoako-Baah said the intended shift to wholesale electricity will enable Ghana to protect its future generation from unnecessary financial burden.
Hence according to him, a more gradual transition to bridging this gap – allowing economies to catch up might be a better answer.
“Ghana today has dovetailed this goal by taking a herculean step to launch the first ever Wholesale Electricity Market in Africa by the year 2022,” noted the grid company chief.
According to Amoako-Baah, the ultimate aim of this endeavour is to improve the socio-economic status of citizenry by providing affordable, reliable, sustainable and clean sources of energy.
GRDCo’s chief also noted that wholesale competition will also induce efficiency gains in the power industry, and this will trickle down to excellent customer service.
Ghana experienced acute power shortage that led to rationing in 2014 and 2015, with serious consequences for the economy.
Most companies were unable to operate efficiently, and this resulted in others being forced to closed down resulting in massive unemployment in the country.
The country reacted to this problem by entering in power purchasing agreements with Independent power producers.
These agreements resulted in the country increasing its installed power capacity to 5,083 MW against a peak power demand of 2700MW.
2,300 MW of the total capacity has been contracted on a take-or-pay basis and has resulted in the country spending close to US$500 million on unused power.
The wholesale electricity market is thus expected to liberalize the market and make electricity more affordable than it is at the moment.