The Volta Aluminum Company (VALCO) is expected to benefit from an additional 75MW of hydro power at a competitive price of $0.035/kwh in the first quarter of 2018.
This will expectedly enable the aluminum smelting company to expand production from the current one pot-line to two pot-lines.
According to a report of the Select Committee on Mines and Energy on the Annual Budget Estimates of the Ministry of Energy for the year ending December 31, 2018, the expansion is expected to increase production from the current 40,500 tonnes with a correspondent increase in revenue and payment of Value Added Tax to government from $79m to $150.75m and $7.6m to $16.1million per annum respectively.
The expansion in production is further expected to create about 1,200 direct employment jobs, made up of 200 at VALCO and 1,000 in the downstream industries such as Aluworks, Western Rods and Allied Industries.
A proposed LED manufacturing venture, which will also use aluminium from VALCO, is also expected to create an additional 330 direct jobs.
The Committee commended the ministry for the initiative and requested that the needed power to operate all the 5 pot-lines should be supplied at the same competitive price to enable the country realise the full benefits from establishing VALCO and revitalising the integrated aluminium and bauxite industry.
VALCO is a major long-term investment in Ghana, and one of the largest enterprises in the country. It is the second-largest smelter in sub-Saharan Africa. VALCO is a major producer of primary aluminium for the world market, and the company currently employs some 574 Ghanaians directly.
Currently, the total electricity demand of the nation – according to the Energy Commission, is 2,533MW for homes, schools, businesses, and industries.
Presently, VRA and other Independent Power Producers (IPPs) together have an installed capacity of about 3,644MW.
Access to cheap power remains the long-standing concern of businesses that are yet to fully recover from the shocks of half a decade of erratic power supply.
However, constraints on fuel sources for power generation — crude oil, gas and water for hydro power generation — have necessitated the need for exploring cost-effective, reliable, and clean energy sources.
Given the current gas demand of about 450Mscf per day, indigenous gas and limited supply from the West Africa Gas Pipeline are unable to meet demand.
With the coming on-stream of more oil and gas fields, the volume of indigenous gas is expected to increase in the medium-term. Available indigenous gas is however expected to run out by 2036, according to energy experts.