Let there be light

In the April 9, 2015 issue of the Daily Graphic, it was reported, “Captains of industry have asked the government to come up with timelines indicating short, medium and long term solutions to the current power crisis.”  It added that the “impact of the power shortfall on industry was so enormous that some companies had reduced production drastically, while some workers had lost their jobs.”

It is against this backdrop that the Association of Ghana industry proposed to meet the Minister of Power because they said “the pledge by government to provide power badges in the first quarter of the year had not been redeemed.” We are already in the fourth month of the year and the “dumsor” crisis does not seem to be ending anytime soon. Some have predicted we may be experiencing this crunch till the end of the year and this is what I foresee happening; more companies will lay off more staff, others will go bankrupt and would have to fold up and criminal activities will increase.

Impact on Consumer Confidence

Power outages have adverse effects on businesses and consumer confidence. Two major institutions that come to mind are the financial institutions and healthcare delivery facilities.

For the financial institution, the consumer’s ability to access ATM machines, online banking and other financial services will reduce drastically. Consumers will hop from one financial institution to the other. In the short term, competition will now move from such basic things as customer service, etc, to who has power (electricity) at a period in time. In any business, power reliability is a key component of emergency preparedness; in the healthcare industry, it is a factor critical to its success and livelihood. An extended power outage within a hospital can have a devastating impact on lives and its financial standing. Aside patient safety and the liabilities associated with patient mortality or other injury; there is an immediate loss of revenues from the discontinuation of patient admissions and services. In addition to revenue loss, there are the unavoidable fixed costs regardless of the hospital’s operability (like salaries, utilities, infrastructure costs, and so on) that the hospital continues to pay even when it is not generating revenue. In the advertising and marketing sector, how do you calculate “reach?” Is it by the number of audience who have lights at a particular period? And how do you account for the other numbers that do not get exposed to your commercial because they do not have power even though you are paying to reach them? And for the individual, it means being jobless. Purchases will reduce. The trader at Makola will have to reduce the prices of his goods in order to get a “quick market.” Goods cannot be cleared at the harbour. Harbour authorities will have the goods auctioned. The wares never got to the market so there will be no taxes paid. The government loses. Programmes will come to a standstill. There will be fear and uncertainty… the economy plunges into darkness, and then what?

The Real Situation

The Akosombo Dam was built between 1961 and 1965 to provide electricity for the aluminium industry in Ghana. The population of Ghana at that time was merely 7.711 million.

Fifty eight years down the line, the population and economic growth of the country has increased tremendously. This has resulted in the rise of factories and other businesses, leading to a high consumption rate. The pressure on the electricity generating capacity of the dam cannot be underestimated.

The Solution

Nevertheless, it is not too late to explore other alternatives. We can consider solar energy as another avenue for the generation of power apart from gas and hydro. Some will say solar energy is costly but would we like to compare the consequences of an economic sinkhole to the price of executing solar energy to aid the power crisis?

This notwithstanding,  I am tempted to agree with Ronald N. Keener Jr., Senior Scientist of Duke Power Company when he mentioned the possibility of transitioning from a monopolised industry to a “competitive market driven industry which will allow customers to choose their electric provider much in the same way people choose their long distance phone company. The opening up of retail, and eventually residential markets, to allow choice will have a great impact on individual utility operations.” So, let there be light!