ECG-GHANA

STRATEGIC ISSUES OF THE ELECTRICITY

COMPANY OF GHANA

PRESENTATION BY MR. WILLIAM HUTTON-MENSAH(AG. MANAGING DIRECTOR)

ELECTRICITY COMPANY OF GHANA

OUTLINE OF PRESENTATION

22/08/2012ELECTRICITY COMPANY OF GHANA (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 22/08/2012ELECTRICITY COMPANY OF GHANA (ECG) 3

1.0 INTRODUCTION


This presentation has two motives. Theyare …………….

� To solicit financial and technicalsupport from Donors and experts ofthe Power Sector.

� To inform the industry of the impactof rapid economic growth and itseffects on electricity generation,transmission, distribution and supply.


The Electricity Company of Ghana(ECG) …...

� Is a private, limited liability companysolely owned by the Government ofGhana

� It operates in six political regionslocated in the southern part of Ghana

� Map of Operational Area


� Has sub divided its operational areainto nine regions and a Subtransmission Division

Company Mandate …………..

� To distribute and supply electricpower to the southern part of Ghana


The Company’sVision is ...............

� To achieve customer satisfaction by providingservices which fully meet the expectations of ourcustomers

Mission Statement …………..

� To provide quality, safe and reliable electricityservices to support the economic growth anddevelopment of Ghana

Organizational Structure

� Organizational Chart22/08/2012

ELECTRICITY COMPANY OF GHANA (ECG) 8

� ECG purchases power from VRA andother IPPs (SAPCL)

� It receives the power at 33kV fromGRIDCo at the Bulk Supply Points(BSPs)

� Electricity supply voltages are 11kV,415V and 240V

� Power supply frequency is 50Hz


2.0 CORPORATE VITAL STATISTICS


11

PERFORMANCE INDICATOR

UNITS 2008 2009 2010 2011

ACTUAL

CORPORATE

STATISTICS

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

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

FINANCIAL

STATISTICS

Operating Profit / (Loss) GH¢m 36.4 32.1 38.57 37.22

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

OTHER

INDICATORS

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 98.37

12

OPERATIONAL

INDICATORS

Peak Demand MW 927.5 1,036.0 1,115.6 1,156.0

Average Outage Duration (Urban

Communities)

Hrs/ Customer/

Year26.58 51.22 65.60 67.9

Average Outage Duration (Rural

Communities)

Hrs/ Customer/

Year58.24 78.19 104.1 185

Average Outage Duration

(Metropolitan Areas)

Hrs/ Customer/

Year- - - 29

Average No. of Outages (Urban

Communities

No./ Customer/

Year1,211 1,125 282.0 293

Average No. of Outages (Rural

Communities)

No./ Customer/

Year1,422 1353 266.0 282

NETWORK

STATISTICS

No. of Bulk Supply Points No. 26 26 26 26

No. of 33/11kV Primary

SubstationsNo. 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

PERFORMANCE INDICATORUNITS 2008 2009 2010 2011

ACTUAL

3.0 STRATEGIC ISSUES


Financial

Inability to self-finance capitalinvestment projects

�Dependence on Government ofGhana, IDA, AfDB and otherdevelopment partners forfinancial support


Technical

1) Meeting the rapid energy demandgrowth of customers (about 7% p.a.over the past 10years; was 11.5% and7.2% in 2010 and 2011 respectively)

� High Level of Suppressed Demand

� Increasing demand of existing customers

� Rapid extension of network through ruralelectrification

2) HighTechnical Losses

� Currently estimated at abt. 12%22/08/2012ELECTRICITY COMPANY OF GHANA (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


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 2011was 102.2%. This was achieved throughprepayment metering (currently abt. 28%)

� Propose to achieve abt. 105% Collection Rateby end of 2012


3) Prepayment Metering

� Expansion to all urban centers within2years

� Meter monitoring

4. Delayed capturing and billing of newcustomers

5. Vandalism

�Theft of network assets (i.e. transformeroil, cables, conductors, etc.)


4.0 CURATIVE ACTIONS (ON-GOING PROJECTS)


A. Capacity/ Network Expansion and Voltage Improvement Projects

B. Financial Interventions


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


CAPACITY EXPANSION & VOLTAGE IMPROVEMENT PROJECTS1

� 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, & Tafo22/08/2012ELECTRICITY COMPANY OF GHANA (ECG) 22

CAPACITY EXPANSION & VOLTAGE IMPROVEMENT PROJECTS2

� 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)


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.)


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 customersareas

� Establishment of utility courts to prosecute energy theft


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


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


B. FINANCIAL INTERVENTIONS1

� 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


5.0 EXPECTED BENEFITS


EXPECTED BENEFITS1

�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


EXPECTED BENEFITS2

�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 22/08/2012

ELECTRICITY COMPANY OF GHANA (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


6.0 SOURCES OF FINANCE (INVESTMENT FINANCING)


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. BankLoans, Suppliers’ Credit, etc.)


ECG requires ……….

� USD 200M annually to support capitalinvestment projects

� It is able to generate from its ownsources a minimum of GH¢30Mannually

� The rest are financed by GoG, DonorFunds, Export Credits, BilateralFacilities, etc.


ECG is required to ……….

� Implement similar projects across itsoperational areas

� Inject more BSPs, primary and distributionsubstations and the interconnecting lines

� Strengthen the backbone of the subtransmission network

� Make quality electricity services available tocurrent and potential customers


But requires ……….

� Financial and technical support topursue the projects

� All projects are self-financing within amaximum 6-10 years� Even in the presence of low tariffs

� The expected return on investment arein excess of 20% .


7.0 CONCLUSION


We have presented ECG’s……………

� Strategic Issues and Curative Actions

�Requirements to revamp and sustainits distribution network

We seek the support of donors and allpresent to implement and address thechallenges associated with electricitydistribution in Ghana.


Additionally as support/ investments are ongoing in ……….......

�Power Generation and

�Transmission

It is important that distribution isincluded to help evacuate the powerto final users or consumers andcross border projects.


Thank you for your attention


ECG-GHANA

Documents

ecg purchases power

staff cost ghm

levies ghm

revenue collection ghm

tax ghm

sales revenue

administrative cost

electricity generation