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Regulatory and policy options to encourage development of ...

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MODULE 9: RENEWABLE ENERGY: REGULATORY AND POLICY OPTIONSpage 9.851.3. Energy consumptionIn 2004, Ghanaians consumed a <strong>to</strong>tal <strong>of</strong> 5,158 GWh <strong>of</strong> electricity supplied by VRA.VRA has two main cus<strong>to</strong>mers: the Volta Aluminium Company (VALCO), which isthe largest industrial cus<strong>to</strong>mer, <strong>and</strong> ECG, the largest non-industrial cus<strong>to</strong>mer. VRAalso supplies power <strong>to</strong> some mining concerns <strong>and</strong> other industries. In 2002,VALCO <strong>to</strong>ok up <strong>to</strong> 32 per cent <strong>of</strong> the power sold by VRA. Production at VALCOwas closed in May 2003, following a breakdown in negotiations between the government<strong>and</strong> VALCO’s parent company Kaiser Aluminum at the end <strong>of</strong> VALCO’senergy contract. Extra electricity became available <strong>to</strong> VRA as a result <strong>of</strong> thesmelter shutdown. In Oc<strong>to</strong>ber 2004 VALCO was bought by the Government <strong>of</strong>Ghana <strong>and</strong> subsequently reopened on a reduced scale in September 2005 undera joint venture agreement with the US company ALCOA.ECG distributes power <strong>to</strong> households <strong>and</strong> industries in the heavily populatedsouthern part <strong>of</strong> Ghana. The utility presently has about 1.1 million cus<strong>to</strong>mers, <strong>of</strong>which about 80 per cent are residential <strong>and</strong> the remaining 20 per cent includeindustrial cus<strong>to</strong>mers, the military, <strong>and</strong> other public facilities. The distribution networkhas relatively high losses <strong>of</strong> about 26 per cent, including about 15 per centnon-technical losses. This indicates that a significant amount <strong>of</strong> distributed poweris lost through illegal connections <strong>and</strong> wastage.

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