The Ghana Grid Company (GRIDCo) is facing several court cases, which could result in the payment of about GH¢106,810,500.00 to litigants.
According to GRIDCo, these claims could result in project delays across the country, thereby affecting their ability to meet statutory objectives. GRIDCo revealed this in the Multi-Year Major Tariff Review 2022-2027 proposals submitted to the Public Utilities Regulatory Commission (PURC) for consideration.
The company said it continued to face enormous legal challenges concerning claims for the payment of compensation to Project Affected Persons (PAPs). GRIDCo added: “Cash flow issues related to the availability of funds to cover all aspects of project execution remains a major hurdle for project execution.”
In this regard, the company said: “When payment to PAPs is unavailable or inadequate, PAPs impacted by substation and transmission line projects across the country make substantial financial claims in courts and before statutory bodies such as the Commission for Human Rights and Administrative Justice (CHRAJ) for the resolution of matters related to compensation payments.”
Still, in the 2022-2027 tariff proposal submitted to the PURC, GRIDCo says it had lost more than GH¢6.7 million in revenue since 2019 due to embedded power generation. In electrical terms, embedded generation is the production of electricity from power stations that are directly connected to a distribution network.
Justifying why PURC should approve its request for a 48 per cent increment in Transmission Service Charge, GRIDCo said since the last tariff review in 2019, some bulk customers connected to the National Interconnected Transmission System (NITS) procured generation at their sites, while others had indicated their intention to follow the same path.
It pointed out that as more customers embrace Embedded Generation (EG) the demand for service from the grid reduces significantly, leading to the under-utilisation of transmission capacity.
The company mentioned BXC 20MW solar power in Gomoa Onyeadze, near Winneba in the Central Region, and Genser Energy’s 48MWe in Tarkwa in the Western Region as examples.
Explaining how embedded generation would affect the company, GRIDCo said: “A high penetration of EG will result in stranded assets for GRIDCo, and lead to low returns on investments on such assets.”
It said further that in instances where EG becomes unavailable due to technical reasons, the immediate upsurge in demand may create instability in the NITS. It, thus, recommended that embedded generation be adequately regulated to prevent such adverse impact on the NITS.
