Volta River Authority: Energy Generation and Distribution in Ghana

Isaac Kirk Koffi gives an overview of the Volta River Authority and discusses partnerships with neighbouring countries. He also talks about investment opportunities, the importance of renewable energies and shares his vision for the future of the energy sector.

Interview with Isaac Kirk Koffi, Chief Executive of the Volta River Authority

energy Ghana

Could you give an overview of VRA?

My dream in five years’ time is to have more than enough to power the development of this nation. Power shortage should be something of the past. We want it to be where you have more than 20% reserve margin and you have enough gas to power all your facilities and enough to export.

VRA has been responsible for the generation of the electricity as well as for its transmission but in the restructuring of the sector we have been mainly responsible for generation. The current situation in terms of energy supply is too good because we are channeling gas supply from Nigeria. As we speak today, the gas pipeline had been restored and we are able to meet the load in this country without any problem. We have adequate generation to meet the demand, but now that Ghana is a middle-income country and is growing – it used to be 6 or 7% and now it is jumping up to roughly 10% per annum – that requires between 100 or 150 megawatts of additional power generation every year.

We have had our challenges in the past few months but going forward I can see us being able to properly meet the supply of electricity in this country. The government has its own goal of 5000 megawatts in 2015 and 2016. We are working with the government to make sure that this growth happens. A lot of the projects take two or three years to develop but by 2016 we need to make sure that we have adequate generation to meet the demand in our reserve. The challenge we have today is that we have just barely enough reserve. If you have enough generation with the requirements which should be not less than 18 to 20%, you should be able to manage this very well.

Our focus is to supply enough power to this country and to the neighboring countries. That’s what we have been working on and we have been collaborating with Togo, Benin, Burkina Faso, and Cote d’Ivoire. We’ve been for some time now supplying power to Togo, Benin and the border towns in Burkina Faso. We want to do that on a bigger scale and we are positioned very well to do that.

In spite of some power crises, Ghana is in a better situation than some other countries in West Africa. What do you think you can bring to these countries?

We have a big hydro now. When we didn’t have gas, 70% of our generation was from hydro. So going from where we had a big hydro, it gives the opportunity to bring in power complementation. Of course, the other companies don’t have that.

We are by the sea where we can get gas from Nigeria. It is quite reliable. We also have Ghana gas in our own field which has been developed.

For us, we want to be able to deliver a good supply to our customers in this country and in neighboring countries at an affordable price. There is no point in supplying electricity which cannot be afforded. That is what we are working toward. As an institution, we are looking at how best we can bring L&G because of course we are running our machines on L&G or gas, it’s cheaper in terms of cost, in terms of materials, and in terms of reliability of operations itself. That’s what we are looking at.

What do you need in terms of collaboration with other countries, such as technology, and what do you bring to other countries?

We have been supplying power to Togo Benin since 1972. We have had this with Burkina Faso as well. We are bigger in terms of power generation in the south region, in the four countries surrounding us. They look up to us and we try to champion some of these things.

We are contracted to supply power, we are doing that and we are doing that very well. They are confident in us. New additional power lines are being built to Togo Benin. It’s going to be finished next year. This will increase the power supply lines in Togo Benin. We have started to build a dedicated power line all the way to Burkina Faso and later on to Mali. That is what is on the drawing. We have funding for the feasibility study. Environmental studies have started. All these things are there to show that we are determined to really push forward out there. Of course, if we are not determined, all of this will not go anywhere.

Are you looking for investments from countries outside of West Africa?

Yes, definitely. We cannot afford all these additional 150 megawatt generation every year. Having said that, we need a reserve margin; we need 5000 megawatt. We are open to IPPs coming in and other financial institutions who can help us in the power sector. Our arms are open. VRA wants to build this plant and if there are investors who want to come on a PPP arrangement with us or support us in building, our arms are open. We have been talking to quite a few people about this.

What makes you more reliable and good to work with than other countries for IPPs?

Our strength is our track record. We have been in this business since the early 1960s. If you go to any of our plants, they will be running at over 97% availability. They are managed by Ghanaians who have been in control all these years. This shows that these are people who are serious and what is built here can be maintained. We have two hydro plants, all being run by us. I have managed a number of these over the years. These are things that make us no different from other plants around the world. This is a comfort for the many people who have visited the plants. It doesn’t work like that elsewhere so when they come here they see that it is working. This is our track record and people who want to invest their money can see that it can be properly maintained. One of the plants has almost been around for 50 years. We are in the process of modernizing that plant and all is running well. They are running well over 94% of availability and that is excellent.

What is your perspective of environmental issues?

Ghana is a very law-abiding country and I must say we have EPA make sure the rules are always followed properly. EPA’s evaluations are making sure we meet all the environmental requirements. EPA is always checking on us and reports are submitted every week. All the environmental considerations are taken care of properly. These are things that we as an operator don’t compromise on. Of course, we work to international standards.

What is your view on the new forms of energy such as solar and wind?

These are the future of the world. Who knows how long crude oil will be available. We need renewable energy. The sun is always there; the wind is always there. That has been developing in the developed world. There is government support for some of these facilities. I believe we should also move toward this. The big thing is that we have already started and we started with the two megawatt solar farm which is the first in this part of the world. It is the national goal to increase it to 10% and up to 12%. I believe by 2015 we should be able to go up to twenty megawatts of solar and we just started our windmills for 150 megawatts of wind. That is the future.

Of course, with time, because of all the generation it is coming down. We are not going to wait until it comes down. We are in need already and we think that is the future. Everyone has said it so we don’t want to wait. We have started and it’s good that we have already started the race. Two megawatts is already on the ground injecting power into the system. The wind farm has already started. In two years, I’m sure you will come back here and we’ll probably show you some sites where we are going to build some wind facilities. Renewables are the future. You have to ask what is always there then you can learn your lessons and you can have control of your own future. That is what we are doing.

What do you think the future of the energy sector will be in five years’ time?

My dream in five years’ time is to have more than enough to power the development of this nation. Power shortage should be something of the past. We want it to be where you have more than 20% reserve margin and you have enough gas to power all your facilities and enough to export. IPPs are always encouraged to come in but locals should take no less than 80% of the share.

I dream that we can help develop this nation. We need power and energy for people to come and invest here and we take this as our responsibility as a state institution to provide that drive and to get to the point where power is available. We should be able to get there where the government’s policy of 5000 megawatts is achieved within the shortest possible. Then there should be a consistent effort to always add on so we always have excess generation to drive the economy.

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