The energy sector is underdeveloped because of the absence of off-take agreements that investors rely on heavily before making commitments.
According to Dr. Samuel Ofori Onwona, Group Head at the Business Development Unit of JOSPONG Group of Companies, since there are no serious guarantees for private investors for the security of their investments, the country would continue to struggle to meet its energy needs.
?It is not a question of the price but also security of the investment. Why would investors pump millions of dollars in the sector if they are not assured of the off-taker?? he queried.
Dr. Onwona, who expressed the concern last week at the official launch of the Africa Centre for Energy Policy (ACEP) ? a policy think tank focusing on energy, said ?Without such agreements, the IPPs would not come in.?
?We have unbundled the energy sector, we have generation transmission and distribution and there is now the call for opening up the transmission sector which is an excellent idea but where are we on the whole question of off-take agreements.?
?Recently a proposal for waste-to-energy came to our desk. Clearly we have a limitation on the off-take agreement. There is a little sense of unwillingness on the part of the government to go ahead to introduce waste to energy policies.?
He said, ?The policy framework looks good; IPPs are supposedly ready to come on board. If there are no off-take agreements they could present then we are really creating a serious bottleneck.?
The off-take issue ?is something that the government really needs in the immediate term to open doors for IPPs to come on board.?
Dr. Onwona said that currently the surest way to go in the energy sector is the waste-to-energy agenda since the other alternatives have limitations in the long term.
?Akosombo is producing 1,020, Bui is producing 400 and if you add all the thermal plants they run up to about 2000 megawatts so the bulk of the supply is still hydro. If tomorrow we have two or three years massive drought it means Akosombo and Bui would be down. That is the nature of the problem.?
He said load shedding ?is very strictly related to the sources for which we are generating the power and other inefficiencies in the system that reduce reliability of supply.?
?We are always going to produce waste that is why we say waste-to-energy is more reliable. We have right now 2000 metric tonnes of waste we are producing in the Accra Metropolitan area alone?We haven?t talked about the rest of the country.
?If we are to put the tonnes of waste into production then that would give us a fair amount of reliable source of energy. If we really want to minimize the risk of intermittent supplies and look for more reliable supplies then waste is very reliable source.?
He said ?the talk in the air is that more generation is coming. This is the first time we are having load shedding that is not based on water scarcity. So we might have a brief solace and with this installed capacity but let us not tickle ourselves; the weather patterns are clear if we look at the secret time nature, it is a matter of time before it hits us again.?
By William Yaw Owusu
