Energy experts question capping of power price per kilowatt hour

Energy experts have questioned government’s decision to cap electricity price, in terms of power purchases negotiation, at 10 cents per kilowatt hour, stressing that it will not attract investors into the power sector. They argued that government was badly advised in making this decision because it will not augur well for the efficient growth of the economy. Kwadwo Poku, an energy expert and Kwame Jantuah of the Public Interest and Accountability Committee (PIAC) on 3FM’s Late Edition Tuesday, explained that it was wrong for government to promote renewables, and at the same time have a cap on what investors can charge on the price per kilo watt hour. Dr Bawumia on Tuesday said government has taken some major decisions in the energy sector where power producers in Ghana cannot charge more than 10 cents per kilowatt hour arguing that Ghana is paying the highest in the sub-region for power per kilowatt hour. “If we have to go by Dr Bawumia’s assertion, 90% of energy producing businesses will shut down or will not even start as they will be unable to determine the right prices. It will not make the project feasible or profitable,” Kwadwo Poku analysed. He further noted, “the cheapest price of solar in Ghana today is fixed at 11 cents. So is Dr Bawumia saying all the solar projects yet to come upstream and those prospecting must sell at 10 cents irrespective of their overheads, cost of land and other running costs?” In his assessment, Mr. Poku said it is only Akosombo and Bui dams that can sell at that price, stressing “I want to believe that the Vice-President was referring to hydro, and does not intend to sign any agreement that is more than 10 cents. Kwame Jantuah also called for further clarification, pointing out that, “solar is more than 10 cents. Even if he was just projecting, we should create the impression that Ghana does not provide room for investors to make effective return on investment.” According to him, it does not serve any purpose to have a system where government puts a cap on the price of electricity before production especially when government knows the other undetermined variables. Mr Kofi Kukubor, a member of the National Democratic Congress Communications Team, said it was dangerous for the government to place a cap without knowing the dynamics that will pan out on the international market. He urged government to engage experts and ensure that the right thing is done to make the sector not only attractive but profitable.

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source: | Ghana]]>