Ghana Grid Company Ltd. (Gridco) : APRIL 2022

GHANA GRID COMPANY LTD.
(GRIDCo)
2022- 2027 TARIFF PROPOSAL
TO
PUBLIC UTILITIES REGULATORY COMMISSION
APRIL 2022
PROPOSALS FOR REVIEW OF ELECTRICITY TRANSMISSION AGGREGATE REVENUE REQUIREMENT AND TARIFF
TABLE OF CONTENTS
TABLE OF CONTENTS ...................................................................................................................... ii

LIST OF TABLES ................................................................................................................................ iv
1 Introduction.................................................................................................................................... 1
1.1 Brief Background of GRIDCo’s Power Transmission Operations................................. 1
1.2 Rationale /Objective Underpinning Tariff Submission .................................................... 1
1.3 Legislative Provision(s) in Support of Tariff Application ................................................. 2
1.4 Highlights of Major Issues which Describe Structure of Tariff Submission ................. 2
2 Initiatives Undertaken Since July 2019 Tariff Review............................................................. 4
2.1 Projects Undertaken ............................................................................................................ 4
2.2 Performance Improvement ................................................................................................. 7
2.3 Enterprise Resource Planning............................................................................................ 8
2.4 Compliance with Directives of the Commission............................................................... 8
3 Key Policy Issues for Tariff Consideration................................................................................ 8
3.1 Ancillary Services ................................................................................................................. 8
3.2 Stranded Assets Resulting from Embedded Generation ............................................... 8
3.3 Operation and Maintenance of Transmission Assets owned by IPPs ......................... 8
4 Proposed Service Delivery and Efficiency Improvements During Tariff Period.................. 9
4.1 Increase Transmission Transfer Capacity ................................................................................ 9
4.2 Increase Reliability and Stability of the NITS .......................................................................... 9
4.3 Meet Increasing Demand ........................................................................................................ 9
4.4 Reduction of Transmission System Losses .............................................................................. 9
4.5 Service Delivery & Efficiency Targets ............................................................................. 10
4.6 Technical/Operating Performance Indicators/Indices ................................................... 10
4.7 Financial Performance Indicators/Indices ...................................................................... 11
5 Key Challenges Likely to Impact Service Delivery ................................................................ 11
5.1 Delays in Project execution .............................................................................................. 11
5.2 Major Transmission Constraints ...................................................................................... 11
5.3 Inter – Regional Transmission (Imports / Exports of Power) ....................................... 12
5.4 System Availability /Reliability of Supply (Quality of Service) ..................................... 12
5.5 System Improvement / Expansion ................................................................................... 12
5.6 Reactive Power Compensation ........................................................................................ 12
5.7 Embedded Generators & Interconnection ...................................................................... 12
5.8 Customer Complaints and Dispute Resolution .............................................................. 13
Ghana Grid Company Limited ii

5.9 Legal Issues Including Resolution of Court Cases ....................................................... 13

5.10 Introduction of Wholesale Electricity Market .................................................................. 13
5.11 Wholesale Bulk Customers............................................................................................... 14
6 Strategies to Address Key Challenges ................................................................................... 14
6.1 Transmission Loss Reduction Strategy .......................................................................... 14
7 Projected Generation ................................................................................................................. 15
8 Capital Expenditure .................................................................................................................... 19
8.1 Capital Expenditure Financing Plan ................................................................................ 19
9 Operation & Maintenance Costs .............................................................................................. 19
10 Administration and General Costs ....................................................................................... 19
11 Human Resource Costs (Employee Costs) ....................................................................... 20
12 Financing and Interest Costs ................................................................................................ 20
13 Conclusion ............................................................................................................................... 20
14 Appendices .............................................................................................................................. 21
Ghana Grid Company Limited iii

LIST OF TABLES
Table 1: Key Operational Assumptions ............................................................................................ 3
Table 2: Proposed Tariff for 2022 – 2027......................................................................................... 3
Table 3: Completed Projects Since the last tariff. ........................................................................... 4
Table 4: Medium Term Projects ......................................................................................................... 6
Table-5 Summary of Projected Electricity Generation 2021-2027 ....................................... 15
Table-6 Summary of Akosombo Generating Station Data 2021-2026 ................................ 16
Table- 7 Summary of Kpong Generating Station Data 2021-2026 ....................................... 16
Table- 8 Summary of TAPCo Data 2021-2026 ........................................................................ 16
Table-9 Summary of TICo Data 2021-2026 ............................................................................. 17
Table-10 Summary of TTIPP Data 2021-2026 .......................................................................... 17
Table-11 Summary of TT2PP Data 2021-2026 ......................................................................... 18
Table 12: Summary of Capital Expenditure Financing Plan (Million GHS) 2021 - 2027......... 19
Table 13: Summary of Operation and Maintenance Costs (Million GHS) 2021-2027............. 19
Table 14: Summary of Administration and General Costs (Million GHS) 2021-2027.............. 19
Table 15: Summary of Human and Resource Cost (Million GHS) 2021 - 2027 ....................... 20
Table 16: Summary of Financing and Interest Costs (Million GHS) 2021-2027 ...................... 20
Ghana Grid Company Limited iv

1 Introduction
Ghana Grid Company Limited (GRIDCo), is responsible for developing, managing and
operating the National Interconnected Transmission System (NITS) in a reliable,
efficient and sustainable manner. GRIDCo has been operating independently since
2008, facilitating wholesale electricity trading and the provision of ancillary services on
the NITS.
GRIDCo’s mission is to provide reliable grid for the development of Ghana and the Sub-
region at large rests on the sustainability and financial viability of GRIDCo.
1.1 Brief Background of GRIDCo’s Power Transmission Operations

GRIDCo was established in 2006 and operationalized in 2008 as part of Government
of Ghana’s (GoG) Power Sector Reforms to (i) address power supply reliability and
quality of supply, (ii) attract private investments in generation, (iii) increase competition
in generation supply and (iv) enhance efficiency in electricity delivery systems for
economic growth.
GRIDCo as the Electricity Transmission Utility (ETU) is also responsible for the
implementation and operation of the Ghana Wholesale Electricity Market (GWEM) to
ensure fair, transparent, and non-discriminatory procurement and dispatch of electricity
from Wholesale Suppliers to Bulk Customers and Distribution Companies.
1.2 Rationale /Objective Underpinning Tariff Submission

The objective underpinning this Tariff Proposal is to obtain a cost-reflective tariff that
will enable GRIDCo improve the service levels and quality thresholds, and importantly
enhance the company’s sustainability. It has become increasingly expensive to
maintain the legacy assets and upgrade the transmission infrastructure to reduce
congestions within the NITS.
A cost-reflective transmission tariff will ensure a reliable and stable NITS which will
restore confidence in Ghana’s power system for sustainable economic development.
The current tariff of 0.060398GHS/kWh does not adequately reflect the cost of
GRIDCo’s operational activities.
The tariff granted by PURC since July 2019 has depreciated in US Dollar terms from
1.0915 US Cents/kWh in 2019 to 0.8492 US Cent/kwh in March 2022 notwithstanding
increases in Regulatory Asset Base over the years (See Figure 1 below).
1.2.1 Increasing Cost of Maintenance

The reliability of the NITS is dependent largely on GRIDCo’s ability to maintain the
assets as required and our promptness to resolve intermittent disruptions. Most of the
over 6,400circuit km of the transmission lines are in densely forested vegetation. The
cost of clearing undergrowth along these lines keeps rising. Aside the thickets posing a
threat to the transmission lines, GRIDCo is confronted by a high incidence of corrosion
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on the coastal transmission lines, illegal mining activities (galamsey) and other forms of
encroachments to grapple with. The coastal and western transmission line corridors are
critical to the stability of the power system since it is the main corridor for evacuating
over 1600MW of power generated from the Western Region.
Additionally, increased transformer capacity at most substations to improve operational

flexibility and reliability, have also increased maintenance expenditure on substation
equipment.
However, GRIDCo’s weakened liquidity position does not allow reasonable coverage of
all these maintenance obligations comprehensively. These factors among others are
detrimental to the optimal performance of the transmission assets. GRIDCo therefore
requires a cost reflective tariff to be able to maintain the various assets in the short to
medium term to enhance efficiency.
1.2.2 Increasing cost of transmission financing

The absence of a cost reflective tariff has hampered GRIDCo’s capacity to secure direct
loans for medium to long term investments in the NITS to meet the growing demand.
GRIDCo’s funding sources has therefore been limited to mainly grants. The non-cost
reflective tariff also makes the required return on most planned investments lower than
the cost of financing, thereby warding off potential financiers.
1.3 Legislative Provision(s) in Support of Tariff Application

GRIDCo derives its legal authority from the Energy Commission Act, 1997 (Act 541)
and the Volta River Development (Amendment) Act, 2005 Act 692. GRIDCo’s
operations are guided by the Electricity Standards and Performance, LI 1934, and
Electricity Regulations, LI 1937. This tariff proposal is in compliance with the PURC Act
1997 (Act 538). Further, LI 1937 mandates the Electricity Transmission Utility (ETU) to
establish and implement the Ghana Wholesale Electricity Market (GWEM), governed
by Electricity Market Rules.
1.4 Highlights of Major Issues which Describe Structure of Tariff Submission

The Revenue Requirement Methodology prescribed by the PURC was employed in the
calculation of GRIDCo’s transmission tariff proposal for the 2022-2027 Major Tariff
Review. Key Operational Assumptions include the following:
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Table 1: Key Operational Assumptions
Description Unit 2022 2023 2024 2025 2026 2027
Projected Energy GWh 23,578.51 25,983.05 27,763.55 29,325.35 31,349.97 34,920.18

Transmission
Projected Peak Demand MW 3,545.27 3,986.96 4,255.74 4,491.42 4,793.36 5,172.30
Projected Transmission
Losses % 4.49 4.21 4.23 4.30 3.90 3.80
Average Exchange Rate GHS 8.57 9.20 9.70 9.88 10.06 9.41
Expected Rate of Return

on Net Fixed Assets % 20.0 21.0 25.0 25.0 25.0 25.0
Network Usage GWh 11.07 12.08 12.90 13.62 14.52 16.15
Using the assumptions and the proposed methodology outlined by the PURC in the
Tariff Methodology, GRIDCo proposes the following Transmission Service Charges
excluding all levies as shown in table 2 for the 5-year tariff period.
Table 2: Proposed Tariff for 2022 – 2027

Appendix A: Transmission Service Charge (TSC) Computation
Forecast Forecast Forecast Forecast Forecast Forecast

2022 2023 2024 2025 2026 2027
Total Energy Sales GWh GWh 22,520 24,889 26,590 28,065 29,921 31,716
Operating Cost
Staff Costs Gh¢'M 256.33 280.61 320.30 366.16 390.87 450.77
Administrative Costs Gh¢'M 79.48 84.83 92.45 100.53 109.91 117.33
Materials and Spares Gh¢'M 18.48 25.51 28.72 31.67 36.34 38.11
Maintenance Costs Gh¢'M 93.83 115.43 134.53 156.05 190.20 215.62
Operating Cost Gh¢'M 448.12 506.38 576.01 654.40 727.33 821.83
Depreciation Gh¢'M 200.45 213.31 227.18 244.91 250.82 259.91
Regulated Fixed Asset Base 1 Gh¢'M 5,169 5,546 5,746 5,884 6,208 6,563
2
Rate of Return on Fixed Asset Base % 20% 21% 25% 25% 25% 25%
Return on regulated fixed asset base Gh¢'M 1,033.74 1,164.58 1,436.42 1,470.92 1,551.97 1,640.75
Working Capital Gh¢'M 1,530.03 1,579.53 1,702.18 1,820.60 1,940.02 1,930.05

Cost of Working Capital Gh¢'M 306.01 331.70 425.54 455.15 485.00 482.51
Corporate Tax 20.03 34.25 12.31 39.68 109.07 67.16
Annual Revenue Requirement Gh¢'M 2,008.35 2,250.22 2,677.46 2,865.06 3,124.20 3,272.16
Projected TSC3 GHS/kWh 0.089181 0.090411 0.100696 0.102087 0.104415 0.103170

% increase (GHS) 48% 1% 11% 1% 2% -1%
The tariff proposal considers operating and maintenance costs, depreciation for the
asset usage, return on regulatory assets base and corporate income tax.
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2 Initiatives Undertaken Since July 2019 Tariff Review
2.1 Projects Undertaken

Since the last major tariff review, GRIDCo has embarked on numerous projects aimed
at improving reliability of the NITS to enhance customer satisfaction. The projects and
initiatives completed are listed in Table 3 below:
Table 3: Completed Projects Since the last tariff.
Item Project Name Completion Cost

Date (USD
Million)
1 330kV Aboadze – Prestea Transmission Line 2019 29.69
2 330kV Kumasi-Bolgatanga Transmission Project.

• Anwomaso-Kintampo Line 2021
• Kintampo – Adubuliyili Line 2019
• Adubuliyili – Nayagnia Line 2019
• Adubuliyili Substation 2019 158.9
• Kintampo and Anwomaso Substations 2019
• Nayagnia Substation 2019
Tamale and Bolgatanga 161kV substation upgrade 2019
3 161kV Volta – Achimota Transmission Line 2021 11.27

Upgrade Project
4 161kV Kasoa Substation (Grant) 2022 42.8
5 330kV Accra Fourth Bulk Supply Point, Pokuase 2021 45.3

(Grant)
6 330kV Karpowership - Aboadze Transmission Line 2019 7.8
Project
7 330kV Aboadze Substation Expansion 2019 31.96
Total 327.72
The addition of these assets has significantly increased GRIDCo’s Regulatory Asset
Base as depicted in Figure 1 below:
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Figure 1
Figure 1: GRIDCo's Regulated Asset Base 2014 – 2027

The Regulated Asset Base includes Capital Works in Progress (CWIP). The inclusion
of CWIP in this Tariff Proposal is to make the necessary provision for assets to be
capitalised during the 5-year regulatory period (2022 – 2027), since there will be no
major tariff reviews during the 5-year period, it is reasonable to consider assets currently
being funded and most likely to be available for use during the period under regulatory
consideration.
Ongoing Projects Required for Grid Reliability and Expansion
As shown in Table 1, demand for energy is projected to grow at an average rate of 9%

per annum to meet this demand. GRIDCo seeks to continue to invest in the transmission
infrastructure to enable reliable evacuation of power from all generating stations to the
load centres, in a safe and secure manner.
The on-going 161kV Achimota – Mallam Transmission Line Upgrade Project is

expected to be completed by the end of 2022. The funding for this project is covered
under the 330kV Kumasi-Bolgatanga Transmission Line Project.
The upgrade of the 161 kV Achimota-Mallam Transmission Line which serves the
highest load centre in Ghana will significantly improve supply reliability to the national
capital.
Medium-Term Projects
The medium-term projects to be completed within the 5-year tariff period as listed below
in Table 4 are expected to build a robust transmission system that enable to deliver
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power reliably, minimise system interruptions, lower transmission losses and be able to
meet increasing demand.
Table 4: Medium Term Projects
ITEM PROJECT NAME EXPECTED COST

COMPLETION YEAR (MUSD)
1 50MVAr SVC in Kumasi 2023
2 330kV Dunkwa Substation Project 2026
3 3rd Kumasi Bulk Supply Point (BSP) 133.93

2025
4 Upgrade of 161kV Western Corridor

Transmission Lines
• Aboadze - Takoradi
• Takoradi -Tarkwa
• Tarkwa - New Tarkwa 2025 224.00
• New Tarkwa - Prestea
• Bogoso - Dunkwa
• Dunkwa - New Obuasi
• Dunkwa - Ayanfuri
• Ayanfuri-Asawinso
5 Construction and upgrade of 161kV middle

corridor transmission lines
• Akosombo- Tafo 2025 140.00

• Tafo- Nkawkaw
• Nkawkaw-Konongo
• Konongo-Kumasi
6 161kV Mallam to Pokuase (A4BSP)

2024 42.00
Transmission Line
7 330kV Pokuase – Nkawkaw - Anwomaso

2025 154.00
Project (Transmission Line and Substation)
8 Wholesale Electricity Market Systems 2023 25.00
9 Wide Area Monitoring Systems (Phasor

2026 2.50
Measurement Units)
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10 Upgrade of SCADA and Corporate

2023 8.50
Telecommunications Network
11 Supply of Two (2No.) 330/225/34.5kV,

250MVA Autotransformers at Nayagnia 2023 6.00
Substation
12 Supply Of 6 No. 120/145MVA Power

2022 10.50
Transformers
13 Prestea-Bogoso Transmission Reinforcement

Project - Termination of the 2nd Prestea – 2022 4.00
Bogosu Transmission Line
14 225/161kV Prestea Substation Improvement

2023 19.10
Project (Including 50MVAr SVC)
15 Live Transmission Line Maintenance

2022 3.00
Equipment
16 Akwatia – New Abirem Loop Closure 2023 16.00
17 Supply and Installation of Variable Reactors

2023 11.00
including 50MVAr SVC at Nayagnia
18 161kV Obotan – New Obuasi Loop Closure 2023 6.00
19 Tafo Substation Break – In Project 2023 6.00
20 Break-in of 225kV Transmission Line at Elubo

2023 4.00
and looping back to Esiama
21 161kV Aboadze-Cape Coast-Winneba-

2026 55
Mallam Coastal Transmission Line Upgrade
22 2nd 330kV Kumasi to Bolgatanga Transmission

2027 120
Line
TOTAL 990.53
2.2 Performance Improvement

Technological improvement and sustainability are key to utility operations. GRIDCo
therefore, has put in place a new Performance Management System which allows the
Company to define, describe, clarify, and communicate its strategy.
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A key strength of this new Performance Management System enables planning at all
levels (corporate, departmental and employee) to be results-oriented. The results are
clear, measurable and motivational. This has enhanced operational efficiency.
2.3 Enterprise Resource Planning

GRIDCo has embarked on some initiatives including the Enterprise Resource Planning
(ERP) to enhance operational effectiveness, access to reliable company information,
compliance to best practice, improvement in operations and financial efficiency.
The ERP system integrates data and processes across multiple departments and
locations making information available for decision making at all levels.
The system streamlines business operations by integrating the data and refining the
processes required to operate as an organization. It also enhances data sharing
among departments and related organisations to enable quick decision making.
2.4 Compliance with Directives of the Commission

Historically, GRIDCo has displayed support for the Commission’s work and remains
committed to working with the Commission to ensure enhanced service reliability to our
cherished customers.
3 Key Policy Issues for Tariff Consideration
3.1 Ancillary Services

GRIDCo as the System Operator requires reactive energy and other ancillary services
to maintain system stability and voltage support, in line with the Grid Code. There is
therefore the need for an approved per unit tariff to formalise the arrangement for
procurement of the various ancillary services for all participants in accordance with the
Grid Code.
3.2 Stranded Assets Resulting from Embedded Generation

Bulk Customers connected to the NITS are increasingly engaging embedded power
generators for direct power supply. This will result in under-utilization of transmission
capacity which results in high transmission cost burden on other regulated transmission
customers. There is therefore the need for a policy direction to guide the deployment of
embedded generation. Challenges with Embedded Generation are further discussed in
Chapter 5.
3.3 Operation and Maintenance of Transmission Assets owned by IPPs

GRIDCo operates the NITS regardless of ownership and maintains third party owned
transmission assets including that of Bui Power Authority and the Karpowership Ghana
Company. These assets are used for transmission service delivery to all customers
connected to the NITS. This proposal includes the operation and maintenance (O & M)
costs of these assets. However, the capital cost recovery of these non-GRIDCo owned
assets is not included in this Tariff Proposal. GRIDCo proposes that the capital recovery
8
cost of these assets should be excluded from GRIDCo’s assets based. We recommend
that Stakeholders are engaged to implement a policy for efficient recovery for such third
parties.
4 Proposed Service Delivery and Efficiency Improvements During Tariff Period
4.1 Increase Transmission Transfer Capacity

The upgrade of existing low-capacity infrastructure during the tariff period will
improve power transfer capability of the NITS to eliminate congestion within
transmission corridors as well as overloads at BSPs. This will enable GRIDCo
efficiently and effectively evacuate power to the major load centers. Adequate
redundancy will also be created to reliably meet the projected demand such
that outage of an element on the NITS would not result in customer outage.
4.2 Increase Reliability and Stability of the NITS

The installation of SVC and variable reactors at critical substations will
continue to improve and maintain system voltages within the requirements of
the National Electricity Grid Code as well as provide sufficient reactive power
within the NITS. This will improve the quality of power supply to customers.
4.3 Meet Increasing Demand

The construction of new lines, provision of higher capacity transformers to
existing substations and development of new substations will enable GRIDCo
meet increasing demand at a rate of 8-10% per annum driven by economic
growth.
4.4 Reduction of Transmission System Losses

The implementation of these medium-term projects, siting generation
facilities on the NITS close to load centres (especially Kumasi and the North)
as well as optimising generation dispatch will also enhance the transmission
loss reduction to improve efficiency.
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4.5 Service Delivery & Efficiency Targets

Figure 2: System Transmission Losses 2019 – 2027
Transmission Losses
Actual
6.00% Forecasted
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Transmission Losses PURC Benchmark
4.6 Technical/Operating Performance Indicators/Indices

TRANSMISSION SYSTEM INTERRUPTION DURATION INDEX (TSAIDI)
7.0 TSAIDI
6.0 TSAIDI PURC Benchmark
5.0 Actual Forecast
4.0
Hours
3.0
2.0
1.0
0.0
Jul-19
Jul-20
Jul-21
Jul-22
Jul-23
Jul-24
Jul-25
Jul-26
Jul-27
Nov-19
Nov-20
Nov-21
Nov-22
Nov-23
Nov-24
Nov-25
Nov-26
Mar-20
Mar-21
Mar-22
Mar-23
Mar-24
Mar-25
Mar-26
Mar-27
Figure 3: Transmission System Interruption Duration Index (TSAIDI) Jul 2019 -Jul
2027
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4.7 Financial Performance Indicators/Indices

Table 5: Projected Financial Indicators
GRIDCo has not been able to satisfy key financial covenants on loans contracted for its
projects. Within this tariff proposal, GRIDCo has projected the levels of tariff that will
progressively help attain an appreciable level of financial performance that will bring
comfort to both current and prospective financiers.
In determining the expected tariff for the regulatory period 2022 – 2027, GRIDCo took
into consideration, the ongoing interventions in the sector which are aimed at
addressing the levels of inter-utility debts and invariably low liquidity. Hence the working
capital assumptions for 2022 onwards, excludes the debts prior to the implementation
of the Cash Waterfall Mechanism.
5 Key Challenges Likely to Impact Service Delivery
5.1 Delays in Project execution

The proposed medium-term projects (Section 2) must be executed to meet the system
demand, minimise system interruptions and increase system reliability. Any delays in
the project schedules will therefore have adverse impact on service delivery.
5.2 Major Transmission Constraints

The NITS is currently challenged with the following major constraints:
• Congestion on some critical lines:

o 161kV Western Corridor Transmission Lines.
o 161kV Coastal Corridor Transmission Lines
o 161kV Middle Corridor Transmission Lines
• Transformer overloads at Tamale, Sunyani and Techiman Substations.
• Single transformer substations including Esiama, Yendi, Akosombo, and
Akyempim.
• Radial transmission network on the NITS.
o 161 kV Tamale-Yendi Line
o 69kV Asiekpe-Kadjebi Line
o 161kV Ayanfuri-Obotan Line
o 69kV Asiekpe-Sogakope Line
o 161kV Sunyani-Berekum Line
o 161kV Nkawkaw-New Abirem Line
o 161kV Takoradi-Esiama Line
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• Low voltages on the eastern corridor due to low network capacity (Ho, Kpeve
and Sogakope)
5.3 Inter – Regional Transmission (Imports / Exports of Power)

Power transfer to Burkina has increased drastically from about 65 MW to an average of
100 MW and it is expected to increase to 150MW.
5.4 System Availability /Reliability of Supply (Quality of Service)

The system currently has been experiencing voltage challenges due to overloads on
the 161kV Western and Middle Corridor Lines. This challenge has direct impact on
transmission losses and makes the system prone to outages.
5.5 System Improvement / Expansion

To address the challenges discussed, GRIDCo has undertaken key projects to improve
transmission services on the NITS as listed in Section 2 above.
5.6 Reactive Power Compensation

Reactive Power Compensation on the NITS could be achieved through either or a
combination of:
• Installation of Capacitor banks

• Installation of SVCs
• Procurement from power generation plants
GRIDCo has installed 796MVAr Capacitor Banks. We note that capacitor banks are
more effective when installed within the Distribution Network as well as the networks of
Bulk Customers which are the sources of reactive power demand.
Currently a 40MVAr SVC is in service at Tamale. A new 50MVAr SVC has been installed
and commissioned as part of the Kasoa BSP project. As indicated above, GRIDCo is
also working at installing a 50MVAr SVC in Kumasi.
5.7 Embedded Generators & Interconnection

Over the last tariff review, GRIDCo has lost revenue in excess of GHS 26.7Million due
to embedded generation. Some Bulk Customers connected to the NITS have procured
generation at their sites whiles others have indicated their intention to follow the same
path. As more customers embrace Embedded Generation (EG), the demand for service
from the grid reduces significantly, leading to under-utilisation of transmission capacity.
A case in point is the location of EG at Winneba and Tarkwa. A high penetration of EG
will result in stranded assets for GRIDCo, leading to low returns on investments on such
assets. Further, in instances where EG becomes unavailable due to technical reasons,
the immediate upsurge in demand may create instability on the NITS. GRIDCo
recommends that EG must be adequately regulated to prevent such adverse impact on
the NITS.
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5.8 Customer Complaints and Dispute Resolution

Some bulk customers in the mining areas have complained of voltage dips at their
facilities. GRIDCo has taken the necessary steps to ensure speedy completion of
projects to improve quality of supply.
5.9 Legal Issues Including Resolution of Court Cases

GRIDCo continues to face enormous legal challenges with respect to claims for the
payment of compensation to Project Affected Persons (PAPs). 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, 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 & Administrative Justice (CHRAJ) for resolution of
matters related to compensation payments.
Currently GRIDCo is facing several court cases which could involve in the payment of
about GHS106,810,500.00. These claims have at times led to delays in the execution
of projects across the country thereby affecting the ability of GRIDCo to meet its
statutory objectives.
5.10 Introduction of Wholesale Electricity Market

GRIDCo as the ETU is responsible for the implementation and operation of the Ghana
Wholesale Electricity Market (GWEM) to ensure fair, transparent, and non-
discriminatory procurement and dispatch of electricity. The GWEM seeks to attract
private investments in the electricity sector and improve transparency, efficiency and
provide pricing signals based on actual cost of generation, transmission, and distribution
of electricity. This will lead to fair and optimum pricing that reflect the actual competitive
cost of electricity.
The GWEM Design has been completed and approved by the Energy Commission.
Market Participants and Regulators were engaged in 2020 on the Market Design and
Draft Market Rules to educate and inform participants and solicit their comments. These
comments have been incorporated to finalize the draft Rules. The Draft Final Rules
have been submitted to the Energy Commission for approval. Subsequently, GRIDCo
together with the Market Consultant will carry out Gap Analysis to identify gaps in
Ghana’s current electricity market relative to the Final Market Rules. GRIDCo will
engage Stakeholders to address the gaps for the implementation of the GWEM.
Currently, challenges in the implementation of the data exchange phase in preparation

towards the GWEM include the timely submission of availability and demand declaration
schedules by Market Participants. GRIDCo has engaged Market Participants to submit
their generation availability declaration and demand data to the System Operator (SO)
daily. However, only a few Market Participants are committed to the submissions, which
has an adverse effect on dispatch scheduling.
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5.11 Wholesale Bulk Customers

GRIDCo currently has 30 Bulk Customer and 3 Distribution Companies.
6 Strategies to Address Key Challenges
6.1 Transmission Loss Reduction Strategy

All efforts are being made to ensure timely completion of the projects to improve system
stability and reduce losses. Additionally, GRIDCo encourages the siting of more
generation in the central section of the NITS such as the relocation of AMERI plant to
Kumasi. This is expected to contribute to the reduction of system losses.
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7 Projected Generation
Table-5 Summary of Projected Electricity Generation 2021-2027
Name Plate Net Effective /

Gross Projected
Generating Power / Dependable
Generation Energy
Station/Plant Capacity Generation
Capacity Generated
Factor Capacity
Hydro:
Akosombo Generating
1023.15 900 22,075
Station
Kpong Generating
183.6 140 4,425
Station
BUI Generating Station 400 360 3,500
Sub Total 1,606.75 1400 30,000
Thermal:
TAPCo 364.4 300 7,067.49
TICo 364.4 320 10,512.00
TT1PP 113.4 100
TT2PP 86.2 70
MRP
T3 132 130 2,903.94
KTPP 220.1 200
AMERI 250 230 7,177.73
SAPP I 180 170 5,212.20
SAPP II 360 350 13,030.50
CENIT 113.4 100 3,285.00
KARPOWERSHIP 450 450 16,753.50
AKSA 370 330
CENPOWER 360 325 11,388.00
AMANDI 202 190 7,073.70
Early Power 400 390 10,900.94
15
Sub Total 90,133.11
TOTAL 5,187.65 4,679.00 120,133.11
Table-6 Summary of Akosombo Generating Station Data 2021-2026

Parameter 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026
Gross Generation 1023.15 1023.15 1023.15 1023.15 1023.15

Capacity
Name Plate Power

Factor
Net Effective / 900 900 900 900 900

Dependable
Generation Capacity
Projected Energy 4,415 4,415 4,415 4,415 4,415

Generated
Target Availability of
Power Plant
Table- 7 Summary of Kpong Generating Station Data 2021-2026

Parameter 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026
Gross Generation 183.6 183.6 183.6 183.6 183.6

Capacity
Name Plate Power 0.9 0.9 0.9 0.9 0.9

Factor
Net Effective / 140 140 140 140 140

Dependable
Generation Capacity
Projected Energy 885 885 885 885 885

Generated
Power Plant
Table- 8 Summary of TAPCo Data 2021-2026

Parameter 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026
16
Gross Generation
364 364 364 364 364
Capacity
Name Plate Power

0.85 0.85 0.85 0.85 0.85
Factor
Net Effective /
Dependable 300 150 150 300 300
Generation Capacity
Projected Energy
1,577 788 788 1,971 1,971
Generated
0.6 0.6 0.6 0.6 0.6
Power Plant
Table-9 Summary of TICo Data 2021-2026

Parameter 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026
Gross Generation
364 364 364 364 364
Capacity
Name Plate Power

0.85 0.85 0.85 0.85 0.85
Factor
Net Effective /
Dependable 320 320.00 320.00 320.00 320.00
Generation Capacity
Projected Energy
2,102 2,102 2,102 2,102 2,102
Generated
0.75 0.75 0.75 0.75 0.75
Power Plant
Table-10 Summary of TTIPP Data 2021-2026

Parameter 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026
Gross Generation
113.4 113.4 113.4 113.4 113.4
Capacity
Name Plate Power

0.8 0.8 0.8 0.8 0.8
Factor
Net Effective /
Dependable 100.00 100.00 100.00 100.00
Generation Capacity 100
17
Projected Energy
613 613 613 613 613
Generated
Power Plant
Table-11 Summary of TT2PP Data 2021-2026

Parameter 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026
Gross Generation
86.2 86.2 86.2 86.2 86.2
Capacity
Name Plate Power

0.8 0.8 0.8 0.8 0.8
Factor
Net Effective /
Dependable
70.00 70.00 70.00 70.00
Generation Capacity 70
Projected Energy
Generated 429 429 429 429 429
Power Plant
18
8 Capital Expenditure
8.1 Capital Expenditure Financing Plan
Table 12: Summary of Capital Expenditure Financing Plan (Million GHS) 2021 -
2027
Item 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026 2026/27
Accumulated
155.95 193.49 199.32 204.88 217.15 222.11
Depreciation
Retained
654.89 636.16 844.46 1,198.37 1,692.54 2190.00
Earnings
Commercial
Borrowings:
Domestic 0 0 0 0 0
Foreign 688.43 157.65 157.33 - 207.20
Additional
Equity
0 0 0 0 0
Contribution by
Shareholder(s)
Grants:
Domestic 0 0 0 0 0
Foreign 0 0 0 0 0
Tariff Revenue
(Revenue from
Projected 1,094.06 1,108.96 1,249.88 1,443.39 1,547.66 1764.24
Capacity
Charge)
9 Operation & Maintenance Costs
Table 13: Summary of Operation and Maintenance Costs (Million GHS) 2021-2027
Item 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026 2026/27
Fixed O & M
93.83 115.43 134.53 156.05 190.20 215.62
Costs (GHS ‘M)
Variable O & M
Cost
10 Administration and General Costs
Table 14: Summary of Administration and General Costs (Million GHS) 2021-2027
Item 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026 2026/27
Fixed O & M
79.48 84.83 92.45 100.53 109.91 109.91
Costs
Variable O & M
Cost
19
11 Human Resource Costs (Employee Costs)
Table 15: Summary of Human and Resource Cost (Million GHS) 2021 - 2027
Item 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026 2026/27
Fixed O & 234.67 256.33 280.61 320.30 366.16 366.16
M Costs
(GHS ‘M)
Variable O
& M Cost
12 Financing and Interest Costs
Table 16: Summary of Financing and Interest Costs (Million GHS) 2021-2027
Item 2021/2022 2022/2023 2023/2024 2024/2025 2025/2026 2026/27
Interest on 49.88 53.04 57.67 65.32 83.91
Foreign Loans
Interest on 37.61 28.49 19.37 13.86
Domestic
Loans
Interest on 384.30 330.08 324.62 330.71 342.47 384.30
Working
Capital Loan
13 Conclusion
GRIDCo is committed to deliver on its mandate to provide to fair and non-discriminatory
access to power transmission to support economic development. This request therefore
seeks a cost reflective tariff to sustain GRIDCo’s operation of the NITS.
20
14 Appendices
F-1T - Transmission Lines Data
F-2T - Transmission Substations Data
F-3T - Transmission Fixed Assets Schedule
F-4T - Transmission Fixed Assets Depreciation Schedule
F-5T - Transmission System Project Cost Data
F-6T - Transmission Project Cost Data (Foreign Costs)
F-7T - Transmission Project Cost Data (Local Costs)
F-8T - Capital Expenditure Funding/Financing Plan
F-9T - Transmission Operation and Maintenance Cost Data
F-10T - Transmission Administration and General Cost Data
F-11T - Transmission Human Resource Cost Data
F-12T - Working Capital Requirement Data
F-13T - Summary of Transmission Costs
F-14T -Relevant Documentation in Respect of Transmission Tariff Proposal
F-15T -Summary of Qualitative and Quantitative Data Contained in Forms F-1T-F14T
in Respect of Tariff Application
21

Ghana Grid Company Ltd. (Gridco) : APRIL 2022

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GHANA GRID COMPANY LTD.

2022- 2027 TARIFF PROPOSAL

PUBLIC UTILITIES REGULATORY COMMISSION

TABLE OF CONTENTS ...................................................................................................................... ii

Ghana Grid Company Limited ii

5.9 Legal Issues Including Resolution of Court Cases ....................................................... 13

Ghana Grid Company Limited iii

Table 2: Proposed Tariff for 2022 – 2027......................................................................................... 3

Table 3: Completed Projects Since the last tariff. ........................................................................... 4

Table 4: Medium Term Projects ......................................................................................................... 6

Table-5 Summary of Projected Electricity Generation 2021-2027 ....................................... 15

Table-6 Summary of Akosombo Generating Station Data 2021-2026 ................................ 16

Table- 7 Summary of Kpong Generating Station Data 2021-2026 ....................................... 16

Table- 8 Summary of TAPCo Data 2021-2026 ........................................................................ 16

Table-9 Summary of TICo Data 2021-2026 ............................................................................. 17

Table-10 Summary of TTIPP Data 2021-2026 .......................................................................... 17

Table-11 Summary of TT2PP Data 2021-2026 ......................................................................... 18

Ghana Grid Company Limited iv

1.1 Brief Background of GRIDCo’s Power Transmission Operations

1.2 Rationale /Objective Underpinning Tariff Submission

1.2.1 Increasing Cost of Maintenance

Additionally, increased transformer capacity at most substations to improve operational

1.2.2 Increasing cost of transmission financing

1.3 Legislative Provision(s) in Support of Tariff Application

1.4 Highlights of Major Issues which Describe Structure of Tariff Submission

Table 1: Key Operational Assumptions

Description Unit 2022 2023 2024 2025 2026 2027

Projected Energy GWh 23,578.51 25,983.05 27,763.55 29,325.35 31,349.97 34,920.18

Expected Rate of Return

Network Usage GWh 11.07 12.08 12.90 13.62 14.52 16.15

Table 2: Proposed Tariff for 2022 – 2027

Forecast Forecast Forecast Forecast Forecast Forecast

Depreciation Gh¢'M 200.45 213.31 227.18 244.91 250.82 259.91

Working Capital Gh¢'M 1,530.03 1,579.53 1,702.18 1,820.60 1,940.02 1,930.05

Corporate Tax 20.03 34.25 12.31 39.68 109.07 67.16

Projected TSC3 GHS/kWh 0.089181 0.090411 0.100696 0.102087 0.104415 0.103170

2 Initiatives Undertaken Since July 2019 Tariff Review

2.1 Projects Undertaken

Table 3: Completed Projects Since the last tariff.

Item Project Name Completion Cost

2 330kV Kumasi-Bolgatanga Transmission Project.

3 161kV Volta – Achimota Transmission Line 2021 11.27

5 330kV Accra Fourth Bulk Supply Point, Pokuase 2021 45.3

Figure 1: GRIDCo's Regulated Asset Base 2014 – 2027

Ongoing Projects Required for Grid Reliability and Expansion

As shown in Table 1, demand for energy is projected to grow at an average rate of 9%

The on-going 161kV Achimota – Mallam Transmission Line Upgrade Project is

Table 4: Medium Term Projects

ITEM PROJECT NAME EXPECTED COST

1 50MVAr SVC in Kumasi 2023

2 330kV Dunkwa Substation Project 2026

3 3rd Kumasi Bulk Supply Point (BSP) 133.93

4 Upgrade of 161kV Western Corridor

5 Construction and upgrade of 161kV middle

• Akosombo- Tafo 2025 140.00

6 161kV Mallam to Pokuase (A4BSP)

7 330kV Pokuase – Nkawkaw - Anwomaso

8 Wholesale Electricity Market Systems 2023 25.00