STRATEGIC ISSUES OF THE ELECTRICITY COMPANY OF GHANA PRESENTATION BY MR. WILLIAM HUTTON-MENSAH (AG. MANAGING DIRECTOR)
OUTLINE OF PRESENTATION (ECG) 2
Introduction Map of Operational Area Company Mandate, Vision & Mission Organizational Structure Company Vital Statistics Strategic Issues Curative Measures (Ongoing Projects) Expected Benefits Outlook (Future Plans) Sources of Funding Conclusion (ECG) 3
1.0 INTRODUCTION (ECG) 4
This presentation has two motives. They are. To solicit financial and technical support from Donors and experts of the Power Sector. To inform the industry of the impact of rapid economic growth and its effects on electricity generation, transmission, distribution and supply. (ECG) 5
The Electricity Company of Ghana (ECG)... Is a private, limited liability company solely owned by the Government of Ghana It operates in six political regions located in the southern part of Ghana Map of Operational Area (ECG) 6
Has sub divided its operational area into nine regions and a Sub transmission Division Company Mandate.. To distribute and supply electric power to the southern part of Ghana (ECG) 7
The Company s Vision is... To achieve customer satisfaction by providing services which fully meet the expectations of our customers Mission Statement.. To provide quality, safe and reliable electricity services to support the economic growth and development of Ghana Organizational Structure Organizational Chart (ECG) 8
ECG purchases power from VRA and other IPPs (SAPCL) It receives the power at 33kV from GRIDCo at the Bulk Supply Points (BSPs) Electricity supply voltages are 11kV, 415V and 240V Power supply frequency is 50Hz (ECG) 9
2.0 CORPORATE VITAL STATISTICS (ECG) 10
PERFORMANCE INDICATOR UNITS 2008 2009 2010 2011 ACTUAL Energy Purchases GWh 5,799.4 6,052.2 6,771.29 7,259 Energy Sales GWh 4,315.8 4,481.5 4,972.36 5,285 Sales Revenue (with levies) GH m 642.1 661.0 1,006.36 1,273 Sales Revenue (without levies) GH m 598.3 616.1 974.59 1,174 CORPORATE STATISTICS Average End-User Tariff GH /kwh 0.13 0.14 0.1960 0.23 Distribution Service Charge GH /kwh 0.06 0.06 0.0976 0.09 System Losses % 23.7 26.0 24.36 25.01 Staff Strength No. 5,280 5,390 5,493 5,799 No. of Customers No. 1,722,245 1,963,958 2,120,564 2,336,286 Revenue Collection GH m 573.1 668.7 897.77 1,252 Operating Profit / (Loss) GH m 36.4 32.1 38.57 37.22 FINANCIAL STATISTICS OTHER INDICATORS Net Profit After Tax GH m 25.1 (20.7) 1.149 17.57 Rate of Return on Average Net Fixed Assets % 2.4 (0.99) 0.05 0.61 Administrative Cost GH m 12.0 39.8 38.8 38 Staff Cost GH m 57.3 64.2 77.1 140 Labour Productivity GWh/Staff 0.82 0.83 0.91 0.9 Admin. Cost/ Billing % 1.88 6.01 3.85 2.95 Staff Cost / Billing % 3.52 10.90 7.7 12 Energy Demand Growth % -0.13 3.84 11.9 7.2 Revenue Collection as Ratio of Sales % 89.3 101.2 89.2 98.3711
OPERATIONAL INDICATORS NETWORK STATISTICS PERFORMANCE INDICATOR UNITS 2008 2009 2010 2011 ACTUAL Peak Demand MW 927.5 1,036.0 1,115.6 1,156.0 Average Outage Duration (Urban Hrs/ Customer/ Communities) Year 26.58 51.22 65.60 67.9 Average Outage Duration (Rural Hrs/ Customer/ Communities) Year 58.24 78.19 104.1 185 Average Outage Duration Hrs/ Customer/ (Metropolitan Areas) Year - - - 29 Average No. of Outages (Urban No./ Customer/ Communities Year 1,211 1,125 282.0 293 Average No. of Outages (Rural No./ Customer/ Communities) Year 1,422 1353 266.0 282 No. of Bulk Supply Points No. 26 26 26 26 No. of 33/11kV Primary Substations No. 81 87 98 108 No. Secondary Substations No. 8,222.0 8,378.0 8,787.0 9,550.0 33kV Overhead Lines km 12,033.7 12,033.7 12,783.7 13,461.3 33kV Underground Cables km 281.7 293.1 1,393.1 1,462.8 Total km 12,315.4 12,326.8 14,176.8 14,924.1 11kV Overhead Line km 13,970.8 14,166.9 14,441.5 14,946.2 11kV Underground Cable km 1,051.8 1,075.3 1,079.9 1,084.4 Total km 15,022.6 15,242.2 15,521.4 16,030.6 LV Overhead Line km 1,450,033.0 1,450,973.7 1,453,282.6 1,469,312.4 LV Underground Lines km 5,010.4 5,016.7 5,072.6 5,092.9 Total km 1,455,043.3 1,455,990.4 1,458,355.3 1,474,405.3 Notes System losses from 2010 to 2011 excludes energy consumption of street lights which is estimated at 3% of energy sales The finance data is provisional 12
3.0 STRATEGIC ISSUES (ECG) 13
Financial Inability to self-finance capital investment projects Dependence on Government of Ghana, IDA, AfDB and other development partners for financial support (ECG) 14
Technical 1) Meeting the rapid energy demand growth of customers (about 7% p.a. over the past 10years; was 11.5% and 7.2% in 2010 and 2011 respectively) High Level of Suppressed Demand Increasing demand of existing customers Rapid extension of network through rural electrification 2) High Technical Losses Currently estimated abt. 12% (ECG) 15
3) Inadequate Capacity of the Existing Network (transformers & lines) 4) Weak & Obsolete Equipment 5) Supply Availability & Reliability Challenges Frequent Network Outages Poor Customer EndVoltages (ECG) 16
Commercial 1) High customer population growth (abt. 9.8% p.a.) 2) High Commercial Losses (estimated at abt. 15%) 3) Inadequate Revenue Collection Revenue Collection as a ratio of sales for 2011 was 102.2%. This was achieved through prepayment metering (currently abt. 28%) Propose to achieve abt. 105% Collection Rate by end of 2012 (ECG) 17
3) Prepayment Metering Expansion to all urban centers within 2years Meter monitoring 4. Delayed capturing and billing of new customers 5. Vandalism Theft of network assets (i.e. transformer oil, cables, conductors, etc.) (ECG) 18
4.0 CURATIVE ACTIONS (ON-GOING PROJECTS) (ECG) 19
A. Capacity/ Network Expansion and Voltage Improvement Projects B. Financial Interventions (ECG) 20
A. SUB-TRANSMISSION & DISTRIBUTION PROJECTS Capacity Expansion and Voltage Improvement Projects Technical Loss Reduction Projects Commercial Loss Reduction Interventions Rural Electrification ICT & Network Modernization Projects (ECG) 21
CAPACITY EXPANSION & VOLTAGE IMPROVEMENT PROJECTS 1 Construction of 3no. Bulk Supply Points (BSPs) in Accra, Kumasi, & Winneba Construction of 19no. Primary Substations in Accra (10), Tema (4), Kumasi (2), Koforidua (1), and Takoradi (2) Construction of 12no. Switching Stations across all operational areas (all stations have been commissioned) Akuse, Kasoa, Bunso Junction, Kuntunase, Bogoso, etc. Upgrade of 3no. existing BSPs Mallam, Akwatia, & Tafo (ECG) 22
CAPACITY EXPANSION & VOLTAGE IMPROVEMENT PROJECTS 2 Upgrade of 15no. existing Primary Substations in Accra (4), Ashanti Region (8), Western Region (2) and Koforidua (1) 33kV & 11kV Lines are also under construction to interconnect new substations to existing ones Conversion of 11kV lines to 33kV in Eastern Region (Tafo Koforidua, Tafo-Suhum) (ECG) 23
TECHNICAL LOSS REDUCTION PROJECTS Pilot Implementation of High Voltage Distribution System (HVDS) Madina & Adenta in Accra Suame Magassine and its environs (Kumasi) Shunt Capacitor Compensation At substations and on feeders across operational areas Reconstruction of the Low Voltage (LV) network within 4no. markets using aerial bundled conductors (Asafo Market, Makola, Tema Comm. One, and Ashaiman Mkts.) (ECG) 24
COMMERCIAL LOSS REDUCTION PROJECTS Re-routing of concealed service tails and the use of meter enclosures to secure meters Deployment of consultants to monitor service connections of the 10,000 largest customers Strengthening of the ECG Loss Control Unit to monitor energy consumption of customers areas Establishment of utility courts to prosecute energy theft (ECG) 25
RURAL ELECTRIFICATION GEDAP - Grid Extension ECG will extend the national grid to about 530 rural towns in 26 Districts GEDAP Grid Intensification 55,000 new customers are expected to be connected in 38 Districts Chinese Contract Phase I extended power supply to 417 communities Phase II will connect an additional 1,000 communities (ECG) 26
ICT & NETWORK MODERNIZATION PROJECTS Installation of Supervisory Control and Data Acquisition (SCADA) Equipment on 33kV and 11kV Networks Accra is completed Works are ongoing in Ashanti and Western Regions Works ongoing on some rural networks Introduction of Live-Line Work in ECG s operations Equipment have been supplied 10no. Gangs (of 5persons) will undergo training (ECG) 27
B. FINANCIAL INTERVENTIONS 1 Implementation of the Automatic Tariff Adjustment Formula GoG is providing additional financial support to operate and maintain streetlights ECG is rigorously employing strategies to collects all debts Cash registers have also been computerized. Development of a common payment platform to ensure real-time capturing of payments (ECG) 28
5.0 EXPECTED BENEFITS (ECG) 29
EXPECTED BENEFITS 1 Provision of enough transformer and line capacity to meet the rapid demand growth Release Suppressed Demand Provide supply to new customers Strengthen the Backbone of the sub transmission network to support rural electrification and cross border projects Automated network to support data acquisition and information flow (ECG) 30
EXPECTED BENEFITS 2 Improve the network by providing redundancies (alternative sources of supply) Reduce system losses to regulated levels Improve voltage levels to achieve 230V±10% Reduce outage levels to achieve regulated levels (ECG) 31
OUTLOOK (FUTURE PLANS) A. Continued Expansion of Sub-transmission and Distribution Network B. Grid Intensification C. Rigorously pursue system loss reduction projects D. HVDS Roll-Out the HVDS across all Operational Areas (Pilot ongoing in Madina and Suame) D. ICT (LAN, WAN, SCADA, Degis, etc) E. Install Prepaid Meters in all Urban Communities F. Complete Roll-Out of Prepayment Metering all across operational areas (ECG) 32
6.0 SOURCES OF FINANCE (INVESTMENT FINANCING) (ECG) 33
Investments are financed through. Internally Generated Funds (IGF) Government of Ghana Support Donor Funds (IDA, AfDB, DFID, JICA, SECKO, etc.) Export Credits Bilateral Loans/ Facilities (i.e. Bank Loans, Suppliers Credit, etc.) (ECG) 34
ECG requires. USD 200M annually to support capital investment projects It is able to generate from its own sources a minimum of GH 30M annually The rest are financed by GoG, Donor Funds, Export Credits, Bilateral Facilities, etc. (ECG) 35
ECG is required to. Implement similar projects across its operational areas Inject more BSPs, primary and distribution substations and the interconnecting lines Strengthen the backbone of the sub transmission network Make quality electricity services available to current and potential customers (ECG) 36
But requires. Financial and technical support to pursue the projects All projects are self-financing within a maximum 6-10 years Even in the presence of low tariffs The expected return on investment are in excess of 20%. (ECG) 37
7.0 CONCLUSION (ECG) 38
We have presented ECG s Strategic Issues and Curative Actions Requirements to revamp and sustain its distribution network We seek the support of donors and all present to implement and address the challenges associated with electricity distribution in Ghana. (ECG) 39
Additionally as support/ investments are ongoing in... Power Generation and Transmission It is important that distribution is included to help evacuate the power to final users or consumers and cross border projects. (ECG) 40
Thank you for your attention (ECG) 41