The Independent Power Generators, Ghana (IPGG) has raised concerns regarding the new emission levy and its impact on electricity tariffs. Dr. Elikplim Kwabla Apetorgbor, CEO of IPGG, in a statement to the Ghana News Agency, highlighted that the levy would inevitably lead to higher operational costs for electricity generation. This increase, he explained, is due to the additional charges imposed on carbon emissions by the new Emissions Levy Act 2023 (Act 112) introduced by the Ghana Revenue Authority on February 1, 2024.
The government’s introduction of the levy is part of its broader strategy to address environmental concerns, specifically targeting greenhouse gas emissions. By imposing a fee of GHS100 per tonne on carbon dioxide equivalent emissions, the aim is to encourage the adoption of green energy solutions and better environmental practices. However, according to IPGG, the nature of existing power purchasing agreements classifies the levy as a “political risk,” suggesting that the financial burden will ultimately be borne by consumers.
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IPGG further clarifies that the cost structure of power generation is sensitive to such levies, and as a result, the additional costs will be incorporated into the overall cost of generating electricity. The power purchasing agreements contain clauses that allow for such increased costs to be passed on to the end user, indicating that consumers should brace for a rise in electricity tariffs. This adjustment, IPGG asserts, is necessary to maintain the operational sustainability of power producers in the face of new statutory financial obligations.
