Government re-negotiates PPAs on renewable energy 

Mr John Peter Amewu, the Minister of Energy, says the government has taken steps to address the challenges it inherited in the renewable energy sector.

He identified as a major challenge the signed Renewable Energy Power Purchase Agreements (PPAs) to the tune of 2,265MW with an average price of cent19/KWh, which was far above what the electricity network could accommodate.
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.

Mr Amewu indicated that the government had reduced the capacities from 2,265MW to 515MW, which could be accommodated within the country’s electricity network.

He said further that the government had re-negotiated and reduced the price/KWh from an average of cent19/19KWh to cent12/KWh; and that further engagement with scheduled PPAs was ongoing to achieve tariffs below cent10/KWh, which is the ministry’s ultimate goal.

He said those actions were undertaken to correct the imbalance in investment by renewable energy of Independence Power Producers (IPPs).

Mr Amewu said the ministry had put a moratorium on new PPAs until the 515MW signed PPAs had been executed.

It had also developed a Renewable Energy Master Plan, which clearly provides 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 the 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.

He said the rest included the construction of the Pwalugu multipurpose hybrid (50MW solar and 60MW hydro) project and 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 completed in November 2020.

Mr Emmanuel Armah-Kofi Buah, former Minister of Energy, reacting to the claims by Mr Amewu, said the minister, instead of responding to the question on how much investment the government had made in renewable energy,  rather sought to talk about the re-negotiation of PPAs.

He said since the government assumed office in 2017, all it had been trumpeting was re-negotiation of PPAs without coming up with any effective policy on renewable energy.

Mr Buah said the NDC government passed the Renewable Energy Act to ensure that 10 per cent of the country’s energy sources were from renewables.

He said the key policy in the law was an aggressive drive to ensure that by 2020, 10 per cent of the power generated came from renewable sources.

“We know we have not even crossed one per cent; where we left off is where we are. In the last budget of 2019 investment by the government in renewable energy was zero,” he added. – GNA

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