AGI demands power; manufacturing sees negative 8% growth in 2014

Business News of Thursday, 5 February 2015

Source: B&FT

AGI Members

Major business lobby, the Association of Ghana Industries (AGI) has asked managers of the power sector to come up with a “short term, time bound action plan” to resolve the worsening energy crisis, in a bid to save industries from collapsing.

Lack of power came up tops among the major challenges facing businesses in the 2014 fourth quarter results of the association’s business barometer report.

The situation, it said, led to the manufacturing sector registering an “unprecedented minus eight percent” growth in 2014.

At its National Council’s Strategic Workshop held from January 29 to February 1, 2015, the association took a critical look at the situation and issued a communique which called for stringent efforts to bring about relief.

“As a matter of urgency, the Ministry of Energy and the Energy Commission should make available the strategic national energy plan – 2015 to 2030 – and also the five-year energy sector strategic development plan covering 2015 to 2020, should be released alongside for purposes of effective implementation and monitoring,” AGI President, James Asare-Adjei, read from the communique.

But businesses which have not done so already may have to readjust their plans for the year to accommodate extra power costs, as power sector managers have failed to say exactly when the intensified load-shedding of power will end.

The AGI has been advising its members to rearrange their operations. “For example, if you work a straight-day shift and you know that you will get power in the night why don’t you arrange so that you can work in the night?” the AGI president said. “If you are not used to doing what we call the 21/10 system, why won’t you just learn to do that such that any time power is available you produce?”

On Monday, the Power capos, led by newly-appointed Power Minister Dr. Kwabena Donkor, enumerated to the press a plethora of problems that have hindered generating plants — including faults, mandatory inspection, routine maintenance, poor hydrology and fuel supply challenges, among others.

The problems have led to the shedding of 440megawatts of power during off-peak periods and 650megawatts during peak periods, out of a total available generation capacity of 1,494megawatts.

The minister said he would not stick his neck out and give a timeline regarding when the severe power rationing regime will end, but assured that it will be this year.

“Leaders have been forced to make commitments that are noticeable by our inability to keep them, and for that reason I will not give a specific date. What I will say is that load-shedding will end this year. Not only will it end, but we do not expect to see load-shedding in the coming years,” he said.

To resolve the crisis, he said government is embarking on “emergency power arrangements” including a 250megawatt project at Aboadze, 450megawatts to be delivered by power ships and 250megawatts from General Electric.

Significant progress, he added, has been made toward completing the 220megawatt Kpone Thermal Power Project (KTPP) and the 110megawatt Tico expansion project.

“While the above is ongoing, we shall continue to work assiduously to restore already existing plants that have been shut down in order to mitigate the situation.”

Intense power cuts in most communities have been lasting anything between 24 to 72 hours — leaving business owners in particular with no choice other than resorting to generator sets, prices of which have seen an increase due to demand.

A dealer in generator sets at the Central Business District told the B&FT demand for relatively smaller (1.5–4.5 kVH) standby generator sets has gone up considerably, and that the buyers are mostly small-sized business operators.

“Because of the dumsor-dumsor, prices of generators have risen remarkably. The ones that typically sold at GH¢400 now sell at GH¢450, and the issue is since most businesses rely on power it makes sense for people to come in for the generators,” he said.

For larger businesses that already have generating plants installed, their headache now is the amount of fuel they buy to keep the plants running.

Dealers also say they are having to do a lot more servicing of the plants due to increased usage.

“Usually, you service your gen-sets after 250hrs or three months, whichever comes first. But with the power crisis, 250hrs is about 10 days — and depending on where you are situated, every 15 days your gen set will be due for servicing,” James Aidoo, Director of Sales and Marketing for G&J Technical Services, dealers in industrial power plants, told the B&FT.

“You service it today, take the invoice there — and by the time the company starts processing for payment it is due for another servicing. So your payments gets messed up; he thinks that what he is paying for is the second one you did, forgetting it’s the first one,” he added.

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