The Chairman of the Parliamentary Select Committee on Mines and Energy, Alhaji Amadu Sorogho has said that there is the need for households to pay more for power than industry in order to save firms from collapse.
In a remark that is set to elicit criticisms from consumers who are already reeling from the recent increment in electricity tariffs, the lawmaker charged households to brace themselves to pay more for power saying: “the time consumers pay cheap for electricity is over.”
Alhaji Sorogho in justifying his call explained that the cost of doing business in the country have risen so much so that industry must now be supported to grow and create jobs by making consumers to subsidise the power of industries.
Speaking at a stakeholder workshop organized by the Institute of Green Growth Solutions in Accra, he said currently industry subsidizes for households and this makes them pay more while households pay less.
He believes that when industry pays less for power, it will free resources for them to expand their operations and hire labour to support their operations.
The comments of Alhaji Sorogho resonate with the position of the government’s energy adviser, the Energy Commission, which has established that the current cost of buying power has made businesses uncompetitive whiles many others will struggle to survive since most industries now have to pay about three times what they are required to stay in business.
According to the Commission, heavy industries like mines would require on the average tariff less than 6 US cents per kWh to stay competitive with similar products imported while light industries could go as high as 10 US cents per kWh to survive and that businesses will be better off running their own diesel powered generator sets since the current electricity tariff is largely anti-competitive.
Mr. Kwabena Nyanteh, an executive member of the Association of Ghana Industries (AGI) – the umbrella body of businesses in the country – contended that the current situation where industry continues to subsidise residential consumers must be reversed in order not to disadvantage industry.
He advised government to put all households on solar panels to produce electricity for them while industries alone enjoyed grid power, a proposition that currently looks unrealistic despite the take off of the National Rooftop Solar programme by the Energy Commission.
“There must be a policy that will dedicate hydro-power plants to industry only in order for them to enjoy a lower-tariff,” he said.
He said considering the high-power tariff that industry is facing in the country, government must begin to consider a less expensive sources of power generation.
“When every household has solar panels on rooftops to produce electricity, domestic consumers will be excluded from the national grid so that industry will have sufficient energy to power their operations,” he argued adding: “That is why an approach with a financial model for households to pay for affordable guaranteed electricity from clean sources installed at the premise of use is far more sustainable.
“Industry expects that efforts at developing the national share of renewable energy to 10 percent by 2020 ought to be more policy driven. There must also be incentives to motivate the adoption of solar and other sustainable sources, such as the removal of custom duties on components or possibly the application of some of the ECOWAS Common External Tariffs to safeguard measures for the solar components,” he said.
He also urged government to institute a renewable and sustainable energy-friendly pricing framework to encourage utility companies to adopt renewable energy in its energy supply mix.
In addition, he said “we must scale up the use of solar PV systems as a positive step towards our climate change mitigation and transition into green economy.
Dr. Seth Twum, Chief Executive Officer of Institute of Green Growth Solutions, said the workshop aimed at creating the platform for decision-makers to deliberate on how to bring a sustainable energy into the country.
The workshop brought together various stakeholders from the energy industry and politicians including members of parliament, media and civil society groups.
He said: “All we need as a country is the political will from the leaders to implement some of the energy policies to make energy accessible for all.”
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