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Former Board Member of the Public Utilities Regulatory Commission (PURC), Dr. Nii Darko Asante, has disclosed that the Ghana’s electricity distribution framework inherently fosters monopolistic tendencies.
Speaking on Joynews which was closely monitored by Elvisanokyenews.net, Dr. Asante explained that electricity distribution is naturally monopolistic, and introducing multiple smaller monopolies, as opposed to a single entity, does not necessarily equate to competition in the traditional sense.
He revealed that consumers will remain tied to their respective distribution service providers regardless of performance. According to him, while introducing multiple players in the sector may create opportunities for local ownership, it does not necessarily address the fundamental issues affecting electricity distribution.”
“Essentially, the nature of electricity distribution is that it will tend to be a monopoly, so option two, instead of having one single monopoly, is to have several smaller monopolies. It’s not competition in the normal sense of the word where somebody who doesn’t perform well will lose market to somebody else because his market is protected. So if you are served by the supplier who handles Dansoman, you will continue to be served by that supplier even if that supplier is bad until and unless that supplier is kicked out by the regulator or whoever else determines that this operation is below par.
“To a large extent, we are not really bringing in competition with any of the options. However, we could allow other players to come in, it’s smaller, so smaller capital. That doesn’t actually solve the problem, but it may be a policy imperative to get Ghanaian ownership of these concessions.” He said.
A major challenge, according to Dr. Asante, remains the high level of electricity distribution losses. He identified commercial losses as the primary concern, arguing that technical losses may have been reduced through investments by the Electricity Company of Ghana (ECG).
“I think commercial losses are the main problem. I think technical losses, if ECG are to be believed, they’ve invested enough to reduce that to reasonable level, but again, you can’t really measure which is technical and which is distribution without quite some investment in measurement of losses.”
Dr. Nii Darko Asante emphasized the need for any private operator in the electricity distribution sector to make a conscious effort to reduce losses
To address the issue of losses, Dr. Asante emphasized the need for any private operator within the electricity distribution space to have a vested interest in loss reduction.
“On the basis that we have a combined distribution loss, which is both the commercial and the technical, to be way too high, the key thing is to make sure that whoever is running a private operation would have an interest in reducing these losses which would mean that they would have to buy bulk power from ECG or whoever and then sell it on to we the consumers.
Source: Elvisanokyenews.net
