Gas flows from West African Gas Pipeline to Sunon Asogli Plant
The Sunon Asogli Power Plant, a private power provider, has resumed full operations after 11 months of shutdown. This followed the resumption of gas supplies from the West Africa Gas Pipeline (WAGP) to fire the plant.
Operations at the company ground to a halt in August, 2012, as a result of damage to the pipeline which supplies gas from Nigeria to the plant.
The damage to the pipeline resulted in power shortages in the country, leading to a power rationing exercise which lasted for more than 10 months.
The Chairman of the Sunon Asogli Power Ghana Ltd (SAPGL), Mr Li Xiaohai, told the Daily Graphic, during a tour of the facility last Friday that gas, through the WAGP, arrived on July 13 and that the company resumed operations that day.
By the next day (July 14) generation hit 180 megawatts, 20 megawatts short of its full capacity.
According to Mr Li the plant was unable to generate to its full capacity because of the weather.
“Although it is a 200-megawatt plant, we are generating 180 megawatts because of the hot weather. If the weather becomes cooler or cold, we can operate at 200 megawatts. The temperature has to be at 15 degrees celsius or below for us to operate at full capacity and that is difficult to achieve in Ghana,”he said.
Power generated by the company forms 14 per cent of the power distributed by the ECG to consumers.
The SAPGL, which is wholly owned by Shenzen Energy of China, has a 20-year power purchase agreement with the ECG.
The agreement includes a clause which states that if the price of gas from the West Africa Power Company increases, the ECG would pay for the extra cost.
The company has 240 workers made up of 150 engineers, 60 of them Ghanaians and 90 Chinese. The rest are auxiliary staff.
The idea to establish the plant was mooted by the Agbogbomefia of the Asogli State, Togbe Afede XIV, who is currently Chairman of the Board of Directors of the company.
The construction of the plant began in April 2008 and was completed in December 2009.
The company, however, began to operate in October 2010 because until then, gas was not available.
Cost of Shut Down
Mr Li said the 11-month shut down affected the company’s fortunes, costing it about $20 million for the period.
“We had to conduct periodic maintenance on our machines, keep our staff here and pay them. All that was not easy,” he said, adding that the power plant was well-maintained even during the lull.
“That explained why the company was able to re-start operations immediately gas supply resumed,” he said.
According to Mr Li moves had already been initiated to improve the capacity of the plant to 560 megawatts.
The company hopes to achieve its dream by the end of 2014 or the early part of 2015.
The expansion project is expected to be financed by the China-Africa Development Fund and other partners.
“Putting up the structures to increase the capacity of the plant is not a problem. The funding is not a problem. What we are worried about is gas supply to power it. If the government can assure us of gas supply, we can start today. We have the experience and the technology,” Mr Li said.
Plans to construct a 700 megawatt coal fired plant is now on course. Coal is said to be far cheaper than gas.
Mr Li said because of its relative cheaper cost, coal was a better alternative for the company to pursue in the interest of Ghana.
Work, he said, had already begun to identify the sites to situate the plant.
He said the gas reserves in Ghana were not enough, adding that although it was being complemented with gas from Nigeria, the country still needed to diversify.
Hydro power, he said, could no longer be relied on as a result of the current changing weather conditions which affected water supply to some of the dams.
Weather pattern fluctuations, in his view, also made solar and wind unreliable.
Therefore, he said, Ghana needed to find alternative and reliable sources of energy now to ensure that economic growth moved in tandem with energy supply.
“I suggest coal because it is very cheap and it is in abundance in the world,” he said.
Mr Li said the SAGPL had made it a policy to generate power at a very low cost but expressed the hope that the Public Utilities Regulatory Commission (PURC) and the ECG would soon arrive at an agreement to “enable the ECG pay the power producers well.”
He said the end users of power needed to come to the realisation that if they wanted reliable and adequate power supply, they needed to pay realistic tariffs.
If realistic charges were exacted on consumers, he said, more independent power producers (IPPs) would invest in the country.
According to him, in some African countries, such as Tanzania, Kenya and South Africa, there existed transparent and realistic systems of power adjustment which attracted IPPs.
In Ghana, on the other hand, investment in the power sector was considered a risk hence the reluctance by the IPPs to venture into the sector.
Mr Li said the economic model on which the SAGPL was established, however, was a good one which produced “a 10 per cent return rate per annum.”
“But that also means that it will take us a long time to recoup our investment. After recouping our investment then we can think about profit,” he said.
He described Ghana as the best place to do business in the West African subregion and added that the SAGPL would strive to be a good example of IPPs in Ghana.
“Our target is to help the Ghanaian economy grow. If the Ghanaian public supports us we will solve the power problem,” he said.
By Mark-Anthony Vinorkor/Daily Graphic/Ghana