Stakeholder Consultations 2018 Major Tariff Review

Transcription

1 Stakeholder Consultations 2018 Major Tariff Review Ghana Grid Company Limited February 12,

2 OUTLINE Introduction Performance Projections Tariff Proposal 2

3 Our prime objective is to provide RELIABLE TRANSMISSION CAPACITY 3

4 INTRODUCTION 4

5 BRIEF BACKGROUND Plan, Develop, Operate and Maintain Transmission Assets. Undertake economic dispatch and transmission of electricity Develop and manage the Wholesale Electricity Market 5

6 TRANSMISSION NETWORK COVERAGE Over 5,500 kilometres of transmission lines Over 5,600 KVA transformer capacity 57 Sub-Stations nationwide Ghana Peak Demand 2017: 2158 MW Ghana Peak recorded this year : 2225MW 6

7 OUR PERFORMANCE 7

8 TRANSMISSION LINE IN-SERVICE (%) Transmission Line In-Service % 8

9 FEEDER AVAILABILITY (%)

10 NITS TRANSFORMER CAPACITY , 610MVA 5,214 MVA 4,059 MVA 3,871 MVA 3,404 MVA 3,138 MVA 2,195 MVA 38% since % since

11 NETWORK DEVELOPMENT SINCE LAST TARIFF REVIEW 2015 Network 2017 Network 330 kv = 220km 225 kv = 73km 161 kv = 4,193km 69kV = 133km TOTAL = 4,619 km 330 kv = 371km 225 kv = 73km 161 kv = 4,933km 69kV = 133km TOTAL = 5,510 km Substations

12 PROJECTS UNDERTAKEN SINCE 2015 COST (US$ PROJECTS STATUS % completion m) Prestea-Bogosu 161kV Transmission Line upgrade 8.5 Completed 100 Kpandu-Kadjebi 161kV Transmission Project 20 Completed 100 Supply Improvement to Berekum 20 On- going 95 Evacuation of Karpowership Project Completed 100 Obotan Power Project Completed

13 ONGOING PROJECTS PROJECT COST (US$ m) STATUS % completion EXPECTED COMPLETION DATE Kumasi-Kintampo-Tamale- Bolga 330kV Transmission line, commenced in On- going 75 Jun-18 Ghana Burkina Interconnection commenced in On- going 80 Mar-18 Supply Improvement to Western Region: Extension of 161kV system to enhance power delivery. Commenced in Sept On- going 95 Jun-18 13

14 NEWLY COMPLETED KPANDU SUBSTATION 14

15 ON-GOING CONSTRUCTION OF 330KV LINE PRESTEA KUMASI PROJECT 15

16 ON GOING CONSTRUCTION OF GHANA BURKINA FASO INTERCONNECTION LINE PROJECT 16

17 PROJECTIONS 17

18 DEMAND FORECAST MW Bulk Customers 2% Mines 9% EPC 1% Losses 4% Exports 4% VALCO 7% NEDCo 8% ECG 65% 18

19 SUPPLY PLAN , GWh SAPL 9% CENIT 2% AKSA 3% CENPOWER 7% BXC Solar 0% MEINERGY Solar 0% VRA 52% Karpower Barge 17% AMERI Power Plant 5% Bui GS 5% 19

20 INVESTMENT PLAN FOR NEW PROJECTS ,000,000, Amount/GHS 12,000,000, ,000,000, ,000,000, ,000,000, ,000,000, ,000,000,

21 OPERATING EXPENSES (MILLION GHS

22 DEPRECIATION USEFUL LIFE IN YEARS Transmission network Assets Leasehold lands Buildings Motor Vehicles Computers Equipment and Other Miscellaneous Assets 22

23 REVENUE REQUIREMENT (MILLION GHS) Rev. Requirement = Variable Cost (Total Operating Cost) + Fixed Cost (Depreciation and Return on Ave. Net Assets) GHS =

24 BUDGET VARIANCES Repairs & Maintenance Materials Actual 2014 Budget - GH 2015 Actual 2015 Budget - GH 2016 Actual Budget - GH Actual 2014 Budget - GH 2015 Actual 2015 Budget - GH 2016 Actual Budget - GH 24

25 BUDGET VARIANCES Staff Training & Development Safety Actual 2014 Budget - GH 2015 Actual 2015 Budget - GH 2016 Actual Budget - GH Actual 2014 Budget - GH 2015 Actual 2015 Budget - GH 2016 Actual Budget - GH 25

26 Energy Demand Forecast (GWh) 35, Energy Demand Forecast ( GWh) , , , , , , Domestic VALCO Exports 26

27 PROJECTS TO BE UNDERTAKEN TO REDUCE LOSSES AND ACCOMMODATE LOAD GROWTH PROJECT COMMISSIONING YEAR SAVINGS IN LOSSES (MW) A4BSP (Substation) Aboadze -Takoradi - Tarkwa - New Tarkwa - Prestea kV A4BSP K2BSP Aboadze Cape Coast Winneba - Mallam Volta Achimota corridor

28 IN-HOUSE INITIATIVES ØComputerized Maintenance Management System ØTelemetry Project ØBilling System Improvements ØPerformance Management Initiatives (BSC) ØEnterprise Architecture (Intranet Portal, Doc. Mgt. & Workflows) 28

29 KEY CHALLENGES Cash flows (Mounting Receivables) Right of way (ROW) Acquisition and Encroachment Embedded generation ( leading to Stranded Assets) 29

30 OUR PROPOSAL 30

31 RATIONALE /OBJECTIVES UNDERPINNING TARIFF SUBMISSION Ensure security and reliability of the NITS in accordance with the Grid Code. To obtain cost reflective tariff to ensure business sustainability. Minimise GRIDCo s risk exposure to energy volume variations. Send signals to customers to improve efficiency. 31

32 KEY ASSUMPTIONS Energy projected to be transmitted in 2018 is 16, GWh Projected Peak Demand is 2,523.49MW for 2018 Transmission Losses (Allowable): 4.0% Average Exchange rate 2018: GH 4.624: US$1.00 Expected Rate of Return on Net Fixed Assets: 12% AAF will cater for Exchange Rate and Inflation fluctuation 32

33 TARIFF STRUCTURE Option A One Component Transmission Service Charge Ghp/kWh Option B Two Component Transmission Service Charge Fixed Capacity charge (GH /MW/Month) and Variable Energy charge (GH /kwh). 33

34 TRANSMISSION SERVICE CHARGE (GH /KWH ) - OPTION A ( ONE COMPONENT) Transmission Service Charge (GHS/kWh) = Total revenue requirement Total energy projected to be transmitted Revenue Required to meet: Cost of sales Operating Expenditure Depreciation Return on Average Net Fixed Assets and then apportioned over in

35 TRANSMISSION SERVICE CHARGE OPTION B (TWO COMPONENT) Fixed Transmission Capacity Charge GH /MW/Month = Total revenue requirement for Fixed Cost Projected Coincident Peak Revenue Requirement: Depreciation + Return on Ave. Net Fixed Assets. Variable Transmission Service Charge GH /kwh = Total revenue requirement for variable cost Total energy projected to be transmitted Revenue Requirement: Cost of sales + O&M Costs 35

36 TRANSMISSION SERVICE CHARGE OPTION A Transmission Service Charge GH /kwh 36

37 TRANSMISSION SERVICE CHARGE OPTION GH 4.624:US$ 1 Transmission Service Charge US$/kWh 37

38 TRANSMISSION SERVICE CHARGE OPTION B Fixed Transmission Capacity Charge GH /MW/Month Variable Transmission Service Charge GH /kwh 38

39 PROPOSED TARIFF CHANGE 5.04Gp/kWh 6.58Gp/kWh 39

40 In Conclusion OBTION B IS PREFERED TO ENABLE EFFICIENT ASSET INVESTMENT RECOVERY INCREMENT IS NECESSARY TO ENABLE US PRESERVE LIFETIME OF KEY TRANSMISSION ASSETS RESTORE TARIFF TO SAME VALUE IN US$ TERMS 40

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