Power Sector Transition in Ghana
Introduction
Spanning 238,588 square kilometers, Ghana is situated in West Africa between Burkina Faso, Togo, and Côte d'Ivoire. Its climate is tropical with nearly 70% of its land in-use for agriculture. It is rich in natural resources including gold, timber, petroleum, rubber, and limestone. The northern part of the country, which experiences less access to infrastructure and higher rates of poverty, is particularly vulnerable to incidences of flooding and droughts than the South.[1]
Ghana's national electricity access rate sits at 86.63% of the population, with 50% of rural populations and 91% of urban populations connected to the grid. Historically, challenges have included significant debt in across the energy sector, excess gas supply, overgeneration of power, and high costs to power generation.[2] Models predict that energy demand in 2070 will reach 84,308 MW.[3]
The Ghana Investment Promotion Center has identified the following power sector needs:[2]
- Street lighting
- Companies to supply energy-monitoring equipment to better meet the increased requests for power monitoring and tariff analysis from industry in the country
- Companies to provide an alternative decentralized sustainable energy system that can easily be deployed in remote and deprived communities
- Companies to provide solar vaccine refrigerators for the preservation of vaccines for child immunization programs in remote and off-grid parts of the country
- Provision of solar energy systems to schools in off-grid communities
- New, higher quality and cost competitive energy services to low-income communities for cooking, transport, water heating, and other home appliances
Additionally, the National Energy Transition Framework establishes the following net-zero targets by 2070:[3]
| Year | Targets |
|---|---|
| 2030 |
|
| 2040 |
|
| 2050 |
|
| 2070 |
|
Current System Description
Current Power Capacity Mix
Ghana has an installed generating capacity of 5,227.5 MW, comprised of:[4][5][6]
- 1,584 MW of hydropower
- 3,429 MW of natural gas
- 214.5 MW of solar
Renewable energy from wind and solar makes up .82% of installed capacity.[7] With a peak electricity demand of only 2,804 MW in 2019,[7] Ghana faces two challenges: excess gas supply and overgeneration of power.[2]
Prospective Power Capacity
Ghana's total hydropower generating potential is estimated to be 2,420 MW, of which only 65.3% (1,580 MW) had actually been exploited as of 2019.[8] An additional 90 MW are expected to come online with the completion of the Juale hydroelectric plant project.[4]
Currently, there is 1,795 MW of solar generating capacity in Ghana's project pipeline. Most of these projects are expected to come online by 2030.[5]
There is also 1,365 MW of wind energy in Ghana's project pipeline.[9] Average wind speeds generally range between 4.0 m/s and 7.0 m/s,[10] with speeds peaking at approximately 9.0 m/s along the Kwahu Plateau.[11]
Renewables in Ghana
Renewable Targets
By 2030, Ghana aims to increase the proportion of renewable energy significantly, from 42.5 MW in 2015 to 1,363.63 MW, with a total of 1,094.63 MW in grid-connected systems. The Renewable Energy Master Plan (REMP) also highlights several other goals related to renewable deployment, namely reducing dependence on biomass for thermal energy needs, creating decentralized renewable electrification options for approximately 1,000 off-grid communities, and promoting domestic content and local participation in the industry.[10]
The REMP aims to install the following (cumulatively) by 2030:[10]
- 447.5 MW of utility-scale solar
- 200 MW of distributed solar PV
- 20 MW of standalone solar PV
- 53.8 MW of solar for community lighting and irrigation
- 325 MW of utility-scale wind
- 150 MW of small- and medium-sized hydro plants
- 50 MW of wave power
- 12 MW of mini and micro-grids
Additionally, resilience can be improved, particularly in the north during off-peak hours, by integrating enough variable renewable energy generation to reach 10-15% of total system capacity.[12]
Major Renewable Projects
In October 2018, the Energy Commission suspended the issuance of licenses for utility-scale solar PV and wind power plants, citing 1) the issuance of 124 licenses for renewable energy projects since passing the Renewable Energy Act of 2011, of which only three were developed; 2) the Electricity Company of Ghana's existing power purchase agreements in excess of 2,000 MW; and 3) overall oversubscription of the wholesale energy market. This suspension does not apply to the Volta River Authority, the Bui Power Authority, and private developers who sell in bulk to customers or to the West African market, subject to grid availability. The moratorium is still in effect.[2][13]
| Project | Generation | Capacity (MW) | Status |
|---|---|---|---|
| Akosombo hydroelectric plant | Hydroelectric | 1,020 | Operating |
| Bui hydroelectric plant | Hydroelectric | 404 | Operating |
| Kpong hydroelectric plant | Hydroelectric | 160 | Operating |
| Blue Power Energy solar farm | Solar PV | 100 | Operating |
| Bui floating solar farm, Phase 1 | Solar PV | 50 | Operating |
| Bxc solar power station | Solar PV | 20 | Operating |
| Gomoa Onyadze solar farm | Solar PV | 20 | Operating |
| Bui Hydro Dam solar farm | Solar PV | 5 | Operating |
| Kaleo solar project | Solar PV | 13 | Operating |
| Lawra solar project | Solar PV | 6.5 | Operating |
| Project | Generation | Capacity (MW) | Status |
|---|---|---|---|
| Juale hydroelectric plant | Hydroelectric | 90 | Announced |
| Bui floating solar farm, Phases 2-5 | Solar PV | 200 | Pre-Construction |
| Bui Hydro Dam solar farm | Solar PV | 60 | Announced |
| Bui solar farm, Phases 1-8 | Solar PV | 260 | Announced; Phase 1 in Pre-Construction |
| Dagbon solar farm | Solar PV | 50 | Construction |
| Ghana Meinergy solar project, Phases 1-12 | Solar PV | 1,000 | Announced; Phases 1 and 2 under Construction |
| Gushie Solar Power Project | Solar PV | 20 | Announced |
| Nzema solar farm | Solar PV | 155 | Construction |
| Pwalugu Solar Component | Solar PV | 50 | Construction |
| Amlakpo wind farm | Onshore Wind | 200 | Pre-Construction |
| Ayitepa wind farm, Phases 1-2 | Onshore Wind | 225 | Pre-Construction |
| Koluedor wind farm | Onshore Wind | 160 | Pre-Construction |
| Konikablo wind farm | Onshore Wind | 250 | Pre-Construction |
| Madavunu wind farm | Onshore Wind | 200 | Announced |
| Togbloku wind farm | Onshore Wind | 280 | Pre-Construction |
| Windstar wind farm | Onshore Wind | 50 | Pre-Construction |
| Project | Generation | Capacity (MW) | Status |
|---|---|---|---|
| Bodi solar farm | Solar PV | 50 | Cancelled |
| Jema solar farm | Solar PV | 70 | Cancelled |
| Kusawgu solar farm | Solar PV | 400 | Cancelled |
| Mahe-Obomshai solar farm | Solar PV | 30 | Cancelled |
| Nabogu solar farm | Solar PV | 40 | Cancelled |
| Nante Solar Energy Project | Solar PV | 20 | Shelved |
| Nyimbale-Sankana Solar Power Farm | Solar PV | 100 | Cancelled |
| Prampram solar farm | Solar PV | 157 | Cancelled |
| Sede solar farm | Solar PV | 100 | Cancelled |
| Siginik Solar PV Farm | Solar PV | 50 | Cancelled |
| Tampion solar farm | Solar PV | 100 | Cancelled |
| Tilli solar farm | Solar PV | 20 | Shelved |
| Osudoku Wind Project | Onshore Wind | 70 | Shelved |
| Tamale solar farm | Solar PV | 20 | Cancelled |
| Anloga Extension wind farm | Onshore Wind | 76 | Cancelled |
| Wokumagbe and Goi wind farm | Onshore Wind | 76.5 | Cancelled |
Potential impacts from renewable expansion
The National Energy Transition Framework 2022-2070 estimates that a comprehensive energy transition will result in:[3]
- Approximately 99.8% access to electricity by 2030
- 48,218 premature respiratory, cardiovascular, and other deaths avoided due to improved air quality
- 200 megatonnes of CO2 (equivalent) of avoided emissions
Fossil Fuels in Ghana
Fossil Resources and Retirement
In 2007, Ghana's commercial quantities of crude oil were discovered to contain approximately 1,019 million barrels, all of which is exported. As of 2019, natural gas reserves totaled approximately 1,936 billion cubic feet, all of which is used domestically.[7]
Ghana's natural gas needs are met by importing natural gas from Nigeria through the West African Gas Pipeline, though these imports have become unreliable in recent years. This is due to feedstock constraints in Nigeria, as well as the debt accrued (and subsequent inability to meet obligatory payments) across Ghana's power sector, resulting in a temporary suspension of imports in June 2016. Because of this unreliability, the Ghanaian government is beginning to explore liquefied natural gas as a fuel source.[14] In 2021, Ghana imported 18.71 trillion British thermal units (BTU) of natural gas, down from a country high of 30.5 trillion BTU in 2011.[15]
Overview of current fossil fuel impacts
In 2022, Ghana exported 2.4 million barrels of crude oil and products, primarily in the forms of normal butane and distillate fuel oil.[16]
In 2013, the Government of Ghana established local content laws that require a 5% equity stake in activities supporting hydrocarbon exploration or productions. While the oil and gas industry only provides about 8,000 jobs nationally, government officials aim to increase local participation to 90% of labor in the value chain.[17]
The West African Gas Pipeline (WAGP) was met with local pushback in the 2000s. In April 2006, twelve Nigerian communities, as well as Friendss of the Earth Ghana, filed a complaint stating the project would cause irreparable damage to the land, if continued as planned.[18] The authors raised concerns regarding inadequate compensation for landowners, insufficient pipeline safety measures, and a lack of transparency on potential environmental impacts.[18] The communities also argued that the project did not reduce gas flaring as intended. Following the complaint, the World Bank launched an investigation, after which the World Bank created a new Management Action Plan to increase consultations, implement compensation schemes, ensure continuation of livelihoods, etc.[19]
The 5,600-km long Nigeria-Morocco Gas Pipeline will extend the West Africa Gas Pipeline to Tangiers, Morocco and Cádiz, Spain, with connections to every coastal country in West Africa (Benin, Togo, Ghana, Cote d'Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Senegal, and Mauritania).[20] In June 2023, the Nigerian National Petroleum Company Limited and the Moroccan National Office of Hydrocarbons and Mines signed memoranda of understanding with relevant national decision-makers from Liberia, Côte d’Ivoire, Benin, and Guinea.[21] The pipelines will connect off the coast of Ghana.
Burning fossils fuels for energy generation is a major contributor to air pollution, which is estimated to cause 28,000 premature deaths in Ghana annually. Deaths from outdoor air pollution have increased since 1997, while those due to indoor air quality have decreased.[22]
Left: Map of the Nigeria-Morocco Gas Pipeline. Right: Map of the West African Gas Pipeline, which delivers natural gas from Nigeria to Ghana. Source.
Employment
Current employment by sector
According to the International Trade Administration, the upstream oil sector employs approximately 8,000 people.[17]
Prospective employment from the renewable energy sector
The Ghana Green Jobs Programme is built on four component strategies intended to promote green jobs throughout the country: 1) building capacity within the Ministry of Employment and Labour Relations to monitor, regulate, coordinate, and facilitate policy implementation across stakeholder groups; 2) promoting skill development for green jobs, particularly in sectors where Ghana has a competitive advantage; 3) supporting small- and medium-sized enterprises (SMEs) in their efforts to expand and create green job opportunities; and 4) mobilizing sustainable and adequate financial support for green entrepreneurs.[23]
Ghana's 2019 Renewable Energy Master Plan estimates that 220,000 jobs could be created by successfully implementing the plan.[10]
Additionally, the National Energy Transition Framework projects that 1,367,894 jobs could be created by 2070 through a just transition of the electricity sector. This includes 911,929 indirect or induced jobs, as well as 455,965 direct jobs.[3]
Workforce Development
Workforce development for careers in renewable energy is a focus of both public and private entities. Technical institutes such as the Deng Solar Training Centre, Kumasi Technical University, and Koforidua Technical University provide training to renewable energy companies and offer relevant certifications and degrees. The Ghana Climate Innovation Centre support incubation for small- and medium-sized enterprises working in sustainability and the environment. The Kumasi Institute of Technology, Energy and Environments has a program focused on building technical knowledge of 92 energy professionals, as part of the Clean Development Mechanism. Finally, Suka Wind and Solar Energy Ghana Ltd. has a Women in Renewable Energy Training Program, which takes a broad approach to transferring knowledge and skills to women and girls specifically throughout three- to six-month long training programs.[24]
Additionally, the Lady Volta Green Tech Academy (LVGTA) is technical training center aimed at providing disadvantaged students, particularly women, in the rural Volta Region with education and training in electricity and renewables. Founded in 2015, the LVGTA established its Renewable Energy Institute, which discusses the theory and practical applications of renewable energy in order to develop local technical knowledge and train specialists for building, operating, and maintaining renewable energy facilities.[25]
Land availability
Forest management is an important climate change mitigation strategy highlighted by the Ghanaian Government in their Nationally Determined Contribution document, especially since domestic deforestation rates in recent years have reached some of the highest in the world. Additionally, declining yields of economically important crops like cocoa (for which Ghana is the second largest exporter globally), environmental degradation due to mining, illegal timber harvesting, and weather variability due to climate change have all signaled government leaders to take a more sustainable and comprehensive approach to forest and landscape management.[26]
An estimated 120,459 acres of land will be required in Ghana's energy transition. This figure represents only about 0.17% of Ghana's estimated agricultural land area.[3]
Civil Society Engagement
The Global Call to Action Against Poverty (GCAP) is a network of non-governmental organizations that works with women's associations, faith-based groups, organizations that support people with disabilities, youth groups, and healthcare advocacy groups to hold governments accountable and build grassroots support for social tools. GCAP Ghana works to build local capacity, generate awareness, mobilize community members, and lead publicity and media campaigns to promote sustainable livelihoods and increase resilience. Specific to the power sector, GCAP Ghana aims to increase the proportion of renewable energy in the country's generation mix to 10%, as well as build technical knowledge in women to increase women's participation in energy planning and development.[27]
Founded in 1986, Friends of the Earth Ghana (FoE Ghana) and its 15,000 members work to address environmental concerns and increase public awareness about climate change and its effects. FoE Ghana emphasizes the intersection of sustainability and gender equity and works to advance both simultaneously. Of their projects, one of note involves highlighting the environmental impacts of the West African Gas Pipeline.[28]
Symbolic Importance
Ghana is experiencing an economic crisis: inflation in 2022 reached 40.4% annually, the value of the cedi dropped more than 50%, and public debt reached 467.4 billion cedis (USD $37.4 billion).[29]The power sector is also in severe debt.[30] In May 2023, a group of independent power producers (IPPs) rejected a proposal to restructure USD $1.4 billion in arrears. These IPPs cumulatively account for meeting 61%[31] of Ghana’s electricity needs and have indicated that they will shut down production if the government fails to meet its payment obligations.[30] As of July 2023, a temporary payment agreement has been made between the government and IPPs to encourage continued operations.[32]
Electricity prices are already being affected by the crisis. Between July and September 2022, the price of electricity increased by 27%.[33]
To combat the crisis and drive inflation down, in December 2022, the International Monetary Fund (IMF) has approved a USD $3 billion loan for the Ghanaian Government, though restructuring the debt and getting assurances from lenders are stipulations for receiving the full loan.[30] At the same time, national leadership also rolled out a plan to swap USD $10.5 billion in local bonds with new ones that will mature in 2027, 2029, 2032, and 2037.[29]
While Ghana has one of the highest electrification rates in sub-Saharan Africa and aggressive climate and clean energy targets, the country’s finances will make renewables rollout more difficult. Ghana’s Nationally Determined Contribution estimates that USD $9.3-$15.5 billion per year is needed to meet the country’s climate ambitions. In addition, the Green Jobs Programme works in tandem with existing workforce development programs to prepare Ghana’s workforce for a clean energy future. In doing so, Ghana could leverage the energy transition as a powerful tool for economic recovery.
Governmental information
Ghana is a republic headed by a President (currently Nana Addo Dankwa Akufo-Addo) who serves as the head of state, government, and the armed forces. The President appoints their Vice President, can veto legislation, and serves for four-year terms. The Supreme Court oversees Ghana's judicial system with members appointed by the President, and the Parliament, which creates legislation, is elected into four-year terms by a plurality vote in single member constituencies.[34]
The Ministry of Energy is the primary body overseeing renewable energy development in Ghana and is tasked with developing, coordinating, and implementing policy, as well as supervising activities across relevant sectors.[10]
The Energy Commission has eight primary responsibilities:[10]
- Regulating the technical aspects of the energy sector
- Advising the Minister of Energy on matters pertaining to renewable energy
- Fostering public awareness and education about renewable energy
- Providing recommendations for exempting renewable energy machinery and equipment from customs, levies, and other duties.
- Promoting local supply chain development
- Promoting opportunities for building local technical knowledge
- Establishes renewable energy development and utilization targets
- Implements provisions of the Renewable Energy Act of 2011 (Act 832)
Several other bodies collaborate with the Energy Commission on Ghana's renewable energy industry, including the Ghana Standards Authority; the Forestry Commission; the Lands Commission; the Environmental Protection Agency; the Ministry of Food and Agriculture; Metropolitan, Municipal and District Assemblies; the National Petroleum Authority; the Water Resources Commission; the Ghana Cocoa Board; the Ministry of Environment, Science, Technology, and Innovation; and the Ghana Revenue Authority. Other stakeholders including the Volta River Authority, Ghana Grid Company, Electricity Company of Ghana, Northern Electricity Distribution Company, and independent power producers.[10]
The Public Utilities Regulatory Commission (PURC) regulates electricity and water utilities. The PURC is responsible for examining and approving rates, promoting fair competition among public utilities, and protecting the interests of both consumers and utilities. It is comprised of nine Commissioners including a Chairman, an Executive Secretary, four commissioners with technical expertise in relevant subject areas, and representatives from labor, industry, and domestic consumers. Commissioners are appointed by the President for five-year terms.[35]
Related government papers
| Year | Paper | Significance |
|---|---|---|
| 1989 | National Electrification Scheme | Serves as Ghana's first framework outlining the country's strategy to reach universal access to electricity by 2020. In doing so, leadership aimed to increase overall standard of living and local socioeconomics while creating jobs and supporting existing industry. |
| 1995 | National Development Planning Commission (NDPC, a.k.a. Vision 2020) | Outlines Ghana's plans for sustainable socioeconomic development as it relates to the renewable energy sector and ultimately lay the groundwork for accelerated deployment. Targets included encouraging research on solar and biogas, update existing renewable energy technology, and expand electricity supply through use of natural gas, solar, biogas, and waste. |
| 2003 | Ghana Poverty Reduction Strategy | Aims to support growth and reduce poverty with specific targets related to renewable energy, including the promotion of private business in the power sector, diversifying national energy mix, implementing a rural energy plan to increase access to renewables in economically viable areas, and funding renewable energy specifically in the national budget. |
| 2003 | Renewable Energy Development and Management Programme (REDP) | As part of the National Energy Strategy (created in collaboration with the Government of Denmark), aims to achieve a 10% renewable energy penetration of electricity and petroleum demand mix by 2020. The Programme identified five proposed actions for overcoming barriers to proliferating renewable energy and energy efficiency technology: 1) establish comprehensive technologies related to renewable energy technology, 2) create a regulatory framework friendly to renewable energy, 3) establish favorable prices and financing mechanisms, 4) support research and development, and 5) establish a database to support rollout of renewable energy strategies. |
| 2003 | Strategic National Energy Plan | As part of the National Energy Strategy (created in collaboration with the Government of Denmark), serves as a medium- to long-term plan for entire energy sector, with the primary result being the development of projected energy supply and demand scenarios. |
| 2006 | Growth and Poverty Reduction Strategy (GPRS) | Builds on 2003’s Ghana Poverty Reduction Strategy by focusing on private sector growth, increasing agricultural production, diversifying national energy mix, and minimizing environmental impacts of energy supply. |
| 2009/2014 | Ghana Shared Growth and Development Agenda I and II | Defines a consistent set of policy priorities, goals, and strategies and includes renewable energy targets, including increasing the proportion of renewables in the national energy mix; promoting energy efficient and renewable technologies; creating a renewable-friendly regulatory framework, particularly for mini-hydropower; and supporting small and mid-scale hydropower project development. |
| 2010 | National Energy Policy | Establishes a framework for energy management that is designed to create an environment that is supportive of increased energy sector investment and increase renewable energy in the national energy mix. Identifies cost as a major challenge to renewable deployment. Creates fiscal and pricing incentives to encourage development and use of renewables. |
| 2010 | Energy Sector Strategy and Development Plan | Aims to increase share of renewable energy to 10% of national energy demand by 2020, achieved by promoting bioenergy resources; encouraging development and use of more efficient stovetops; support use of biofuels in transportation applications; promoting wind, solar, and hydropower resources; and establish tax incentives for renewable energy and waste-to-energy project equipment. |
| 2011 | Renewable Energy Act (Act 832) | Aims to create a regulatory environment that is supportive of and attracts private sector actors in renewable energy development and utilization. Key provisions include:
As a result, Feed-in Tariffs have been implemented, of Feed-in Tariffs, the framework for the Renewable Energy Fund, The passage of this Act resulted in the development of Feed-in Tariffs, the Renewable Energy Fund framework, a licensing manual for renewable energy service providers, and draft guidelines for the Renewable Energy Purchase Obligation. Additionally, codes for net metering, as well as sub-codes for transmission and distribution systems, have been developed. |
| 2016 | Mini-Grid Electrification Policy | Approves the addition of mini-grid electrification into the National Electrification Scheme and establishes mini-grids as a public sector investment. Mini-grid customers would receive the same pricing policy as those purchasing from the national grid. |
| 2019 | Renewable Energy Master Plan (REMP) | Represents a USD $5.6 billion investment plan to proliferate renewable energy technologies throughout Ghana between 2019 and 2030. The Plan also aims to improve business conditions for private sector growth and provide training opportunities to increase technical capacity. Successful implementation would achieve an estimated 1,363.63 MW of renewable generating capacity, connected grid systems totaling 1,094.63 MW, creation of 220,000 jobs across the country, and 11 million metric tons of carbon dioxide avoided by 2030. |
| 2019 | Ghana Infrastructure Plan 2018-2047 | Provides long-term planning for a reliable, robust national infrastructure system. Notably, the Plan includes specific sections of energy system upgrades and the deployment of increased renewables and nuclear energy.[8] |
| 2019 | Integrated Power System Master Plan for Ghana | Outlines the "least-regrets" strategy for long-term power sector resource planning required to meet future energy demand, increase resilience, achieve cost competitiveness, and promote economic growth while meeting Ghana's local environmental and climate commitments.[12] |
Relevant political coalitions
Ghana is a member of the Economic Community of West African States (ECOWAS), a union of 15 West African countries intended to foster economic coordination and collaboration across the region. Established in 1975, ECOWAS includes Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, The Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Niger, Nigeria, Sierra Leone, Sénégal and Togo, with Mauritania serving as an associate member.[36] In 2006, ECOWAS published three papers pertaining to the region's energy system: 1) the ECOWAS/UEMOA White Paper on Energy Access, which proposed that at least 20% of new investments in rural and peri-urban electrical generation originate from renewables, 2) the ECOWAS Renewable Energy Policy, which envisions a combination of grid connections for 75% of residents and mini-grids and local, small-scale generation for the remaining 25% of residents living in remote areas, and 3) the ECOWAS Regional Bioenergy Strategy, which aims to reduce barriers to greater deployment of bioenergy throughout the region.[10]
In May 2022, high-level representatives from 10 African nations (Democratic Republic of Congo, Ghana, Kenya, Malawi, Morocco, Nigeria, Rwanda, Senegal, Uganda, and Zimbabwe) published the Kigali Communique, which outlines seven principles for addressing development gaps, align on Paris Agreement efforts, and foster economic prosperity while achieving net-zero targets.[37] The seven principles are:[38]
- Make modern sustainable energy available to the entire African continent.
- Support African in the development of gas as a transition fuel and the long-term displacement of gas by renewable energy and green hydrogen for industrial development, if financially and technically feasible.
- Pursue a modern energy minimum of 1,000 kWh per capita consumption - middle income economies are consuming 2,500 kWh per capita and high-income economies 6,000 kWh per capita - in Africa, that also prioritizes a revolution in clean cooking.
- Scale-up private and public sector investment to well over USD $2 trillion in new generation, transmission, and distribution infrastructure and new energy technologies and delivery systems.
- Prioritize the creation of millions of local jobs in the new sustainable energy sector to benefit local economies, including through the creation of local supply chain and climate-aligned national energy transition plans.
- Lift development finance restrictions that currently limit projects in Africa that can meet local development needs and ramp-up domestic resource mobilization.
- Catalyze a step-change in technology transfer mechanisms to ensure that the entire continent has access to the latest energy innovations, on fair terms.
Public-Private Partnerships
Power Africa, a partnership led by the United States government, aims to increase energy access and end energy poverty in sub-Saharan Africa by coordinating resources and efforts across the private sector, governments, and international development organizations.[39] They do this through a transaction model focused on increasing efficiency of energy project transactions while also advocating for policy reform. Interagency teams gather financing, insurance, technical assistance, and grant resources from the U.S. government and private sector partners, and field-based Transaction Advisors helps governments across the sub-Saharan prioritize, coordinate, and expedite power project development. Additionally, Power Africa works to ensure and accelerate financial close by providing technical, transactional, fiscal, and other support to project developers.[40] In Ghana, 550 MW of electricity generation projects have been supported through this effort.[41]
Ghana is a country of focus for Sustainable Energy for All (SEforALL), an organization that partners with the United Nations, government leaders, private sector actors, financial institutions, civil society, and the larger philanthropic community to advance Sustainable Development Goal 7 - access to affordable, reliable, sustainable, and modern energy for all my 2030.[42] In late 2022, the Ghanaian Government announced a partnership with SEforALL and Bloomberg Philanthropies to develop an Energy Transition Plan, which will provide a roadmap for achieving universal energy access, increasing energy efficiency, and providing a net-zero framework for the country.[43]
Permitting
The permitting process in Ghana is time-intensive, with the Energy Commission taking nearly 70 days on average to respond to applicants about the status of their licensing decisions.[44] The permitting process has also been described as complicated, slow, non-transparent, and lacking in clear responsibility structure.[45] IRENA's 2015 Renewables Readiness Assessment for Ghana recommends establishing a one-stop-shop to help independent power producers navigate the permitting process and streamline approvals across relevant agencies.[46]
Licenses are required for the:[47]
- Production of electricity
- Production of renewable energy products
- Transportation of renewable energy products
- Storage of renewable energy products
- Distribution of renewable energy products
- Sale and marketing of renewable energy products
- Import and export of renewable energy products
- Construction and maintenance of renewable energy facilities
Published in 2012, the Energy Commission's License Manual for Service Providers in the Renewable Energy Industry defines renewable energy as wind, solar, hydro, biomass, geothermal, and ocean energy, though biofuels are the primary renewable energy type documented in the guide.[47]
To obtain a license for supplying electricity from renewable energy sources, developers need to acquire a Provisional License, which requires submitting documents outlining 1) a Scope of Operation, 2) Company Registration, 3) Principal Officers, Directors, and Partners, 4) Ownership and Corporate Structure, 5) Cross-ownership and Ring Fencing, 6) Disclosure of Liability and Investigations, 7) Financial Capability and Proposed Financial Plan, 8) Statement of Assets, 9) Feasaibility Report, 10) Business Plan, 11) Company History and Existing Activities, 11) Industry Participation, 13) Operational Experience and Expertise, 14) Specific License Conditions and Exemptions, 15) Indicative Implementation Plan, 16) Commercially Sensitive Information, and 17) Generating Plant Technology and Type of Renewable Energy Resource.[47]
Before construction can begin, a developer must obtain a Siting Permit, which requires submitting 1) Site Analysis, 2) Land Conveyance Agreement, 3) Geological Survey, 4) Health, Safety, and Environmental Plan, 5) Environmental Disclosure, 6) Site Layout and Right of Way, and 7) a Water Use permit, if project is hydropower. Developers must also receive a Construction Work Permit by submitting 1) Implementation Agreement, 2) Detailed Implementation Schedule, 3) Plant and Machinery Specifications, 4) Construction Contract, 5) Feed-in tariff approvals from the Public Utilities Regulatory Commission, and 6) a power purchase agreement.[47]
Finally, Operational Licenses can only be acquired after submitting 1) a supply agreement, 2) an Operations and Maintenance Plan, 3) Safety and Technical Management Plans, 4) Commissioning Report, 5) a plant drawing, and 6) receipt of initial license fees.[47]
Transmission
Current transmission resources
The Ghana Grid Company (GRIDCO) is the state-owned entity solely responsible for the country's transmission. Electricity Company of Ghana (ECG) and Northern Electricity Distribution Company (NEDCO) control most of the distribution system, with one private company, Enclave Power Company, playing a minor role in distribution.[2]
Enclave Power Company (EPC) is Ghana's only privately-owned power distribution company. In total, EPC owns the country's largest privately-owned substation and delivers approximately 45 MW of power to industrial customers in the Tema Free Zones Enclave and in Dawa Industrial Zone. The power is purchased from the Volta River Authority and delivered to processing facilities for Cargill Ghana, Barry Callebaut, United Steel Company, and Rider Steel Ghana Limited, all of which have a maximum demand exceeding 41 MW.[48]
Across Ghana, 5,216 kilometers of transmission carry four main voltage levels: 330 kV (~364 circuit-km), 225 kV (~74.3 circuit-km), 161 kV (4,636.6 circuit-km), and 69 kV (132.8 circuit-km). These lines connect generating centers across the country: Akosombo, Kpong, Tema, Bui, Aboadze, and proximity 64 Bulk Supply Points (BSPs).[8] Currently, Ghana's grid is connected to Côte d'Ivoire and Togo,[8] as well as Burkina Faso.[49]
New transmission needed for renewables
While Ghana has one of the highest electricity access rates in sub-Saharan Africa at more than 85%, the remaining population can be reached via grid densification and installing stand-alone systems, both of which are considered lower-cost options for increased connectivity.[50]
Constructing additional transmission and/or local generation options will be required to increase grid stability and reliability, especially in the Middle Belt and NEDCO regions and beyond the mid-2020s timeframe. The Integrated Power System Master Plan's (IPSMP) fourth recommendation pertains to transmission planning and is comprised of four actions: 1) expedite the construction of the A4SBSP substation near Pokuase; 2) conduct additional transmission analyses to confirm specific, additional improvements needed in the 2020s, especially in the Middle Belt; 3) facilitate increased integration of variable renewable energy into the northern zone of the grid by leveraging modern technology and improved operations; and 4) consider a proposed project which would close the eastern corridor loop from Kpandu-Kadjebi to Yendi through Juale, which would increase reliability in the NEDCo zone. The IPSMP also recommends that the Ghanaian Government update the country's 2011 Transmission System Master Plan; upgrade transmission lines connecting the Western region to the Middle Belt, as well as the connection between Tema/Akosombo and Aboadze to mitigate constraints and increase reliability; make double circuits the norm for all new high-voltage transmission and sub-transmissoin lines to mitigate future right-of-way challenges; assess the aggregate effects of all variable renewable energy sources currently connected to the grid and provide recommendations for future wind and solar projects; and install meteorological equipment to help the System Control Center predict wind and solar output, as well as aid the overall dispatch process.[12]
Additionally, the IPSMP goes on to recommend the following regarding distribution:[12]
- Use smarter meter and automatic meter reader information to implement strategies to reduce commercial losses, improve collection rate of the distribution companies, and inform demand forecasting.
- Improve coordination between the Ministry of Energy and distribution utilities in extending the grid to new communities and connecting new customers.
- Improve inventory management of meters to ensure uniformity in rate types across customers.
- Review relevant sections of the GRID Code to enable use of higher voltages.
- Expand scope of Electric Company of Ghana's (ECG) Accra Reliability Assessment (2017) to include more regional capitals and other ECG service areas.
- Expand scope of load flow analyses carried out in Tamale to include heavy load centers to improve distribution planning.
- Develop an integrated SCADA system across all utilities in Ghana.
- The deployment, operations, and maintenance of 11-kV or 33-kV solar PV projects should be undertaken by power distribution companies, though the Ghana Grid Company (GRIDCo) should remain informed throughout the planning, construction, operations, and maintenance stages of project development since each phase will affect the National Interconnected Transmission System. Solar projects with capacities greater than 20 MW should be connected to the grid at higher voltages.
- Carry out studies to determine localities where rooftop solar has the potential to reduce technical loss and improve value to utilities.
- Distribution utilities and the Ministry of Energy should coordinate to synchronize GIS data collection and its use for planning, operations, and maintenance of distribution service assets. This would reduce cost and avoid duplicated efforts.
Social and environmental impacts of new transmission
Approximately 2,000 communities across 23 districts around Lake Volta are unlikely to be connected to the national grid due to their rural location, so off-grid electrification programs can help increase access to energy. These programs include:[24]
- Self-Help Electrification Programme: Allows communities to work with local leadership to receive government support for connectivity earlier than planned in the National Electrification Master Plan, though participating localities must meet a threshold for wired households and procure/erect required distribution poles.
- Rural Development Fund: Provides USD $20 million to small- and medium-sized enterprises (SMEs) involved with either agriculture and manufacturing or energy, on an 80/20 allocation, respectively. This funding is provided by the Danish International Development Agency.
- Renewable Energy Fund: While focused on promoting renewable development, the Fund could theoretically extend to off-grid development.
Companies seeking grid expansion to rural communities tend to encounter challenges, especially regarding last-mile distribution. They tend to have limited access to data regarding current and future grid expansion projects, which would be helpful for making decisions on development locations. Low mobile-money penetration and poor mobile network coverage in rural communities hinder utility of existing pay-as-you-go systems, which is a common model for energy products and services. Distribution can become expensive and time-consuming, particularly for communities with lacking or underdeveloped transportation infrastructure needed for construction. Finally, sales agents need to be trained, retained, and based in rural areas, which poses an additional set of challenges.[24]
Supply Chain
The Renewable Energy Master Plan highlights that both public and private renewable energy projects must source at least 20% of necessary goods and materials from the local market. As local production matures, the scope and content covered by this requirement will be broadened.[10]
In 2019, Parliament established the Ghana Integrated Iron and Steel Development Corporation (GIISDEC) to promote domestic steel and iron industries. While publicly-owned, the GIISDEC works with private sector partners to amplify the industries across the entire value chain from mining through production.[51] Steel is a major component of wind turbine components and solar panel frames.
Ownership
Reforms in the 1980s helped create an environment for independent power producers (IPPs) to participate in the industry.[2] In sub-Saharan Africa, Ghana ranks fourth in terms of capacity generated by IPPs.[52]
Major owners of current fossil capacity
Established in 1961, the Volta River Authority owns a diverse mix of generation assets totaling 2,532 MW. In addition to the renewable projects listed below (see Major owners of prospective renewables), this total includes:[53]
- 330MW Takoradi thermal power station
- 340MW Takoradi thermal power plant, which is a joint venture between VRA and TAQA from Abu Dhabi
- 110MW Tema thermal power plant (Station 2)
- 80MW Tema thermal power plant (Station 3)
- 220MW Kpone thermal power station
- 250MW Ameri power plant
Major owners of prospective renewables
Among existing assets, project owners include Meinergy, which own 13 solar projects;[5] NEK Umwelttechnik AG, which own seven wind projects;[9] and Volta River Authority, which own two hydroelectric projects.[4]
In addition to the fossil fuel projects listed above (see Major owners of current fossil capacity), the Volta River Authority owns:[53]
- 1,020 MW Akosombo hydropower generating station
- 160 MW Kpong hydropower generating station
- 2.5 MW solar PV plant in Navrongo
- 6.54 MW solar PV plant in Lawra
- 13 MW solar PV plant in Kaleo
Moreover, the Bui Power Authority (BPA) was established by Parliament in 2007, with its legal mandate amended in 2020, specifically to support buildout of renewables in Ghana. BPA has the authority to execute renewable projects on behalf of the Government of Ghana, as well as undertake its own activities related to renewable energy and other clean energy alternatives. As it stands, BPA currently owns:[54]
- 45 kW Tsatsadu Generating Station in Alavanyo
- A 250-MW project, only 50 MW of which has been completed so far. This is the first project to be connected to the National Interconnected Transmission System.
- 1 MW floating solar PV project on the Black Volta River
- 30 kW of rooftop solar PV in Accra
Finance
The total cost of Ghana's energy transition is estimated to be USD $562 billion. National leadership is already in discussions with potential funders, including domestic banks, specialized debt and hedge funds, investment banks, pension funds, and multilateral development banks. Funding will likely require involvement from both public and private sector actors.[3]
Ghana's Nationally Determined Contribution also estimates that between USD $9.3 billion and USD $15.5 billion from 2020-2030 will be required to meet their goals. This includes approximately USD $3.9 billion for implementing 16 unconditional programs, as well as USD $5.4 billion for 31 conditional programs. An additional USD $3 million would be needed biennially to finance coordination efforts.[55]
Previous power sector projects have garnered financial support from international development institutions. For example, the Ghana-Burkina Faso Interconnector, which was designed to increase Ghana's electrical export capacity and reduce Burkina Faso's energy costs, received an estimated USD $41.9 million from the World Bank. This funding was part of the World Bank's International Development Association and included USD $16 million for Burkina Faso and a USD $25.9 million credit for Ghana. In addition, the European Investment Bank committed USD $30.9 million, and the French Development Agency committed USD $39.3 million.[49]
Potential providers of wind/solar finance
Banks involved in financing Ghana's renewable energy sector include Stanbic Bank, Ecobank Ghana, Fidelity Bank, and CalBank, though the commercial banking sector does not actively lend to off-grid energy companies, and loans tend to have high interest rates and short payback periods.[24]
Between 2016-2020, the African Development Bank committed USD $7.2 billion of its own funds, as well as USD $850 million in co-financing, in support of the New Deal on Energy for Africa. Across the continent, the Bank expected the investments to: 1) add 3 GW of installed generation capacity, of which 2.2 GW would be from renewable sources; 2) construct over 7,000 km of transmission lines and 65,000 km of distribution lines, which expand electricity access to an additional 12 million people; and 3) increase energy access for 3 million off-grid individuals by stimulating market for decentralized systems.[56]
Additionally, the Sustainable Energy Fund for Africa finances private sector investments in renewable energy and energy efficiency. It is a multi-donor fund managed by the African Development Bank with contributions from the governments of Denmark, the United States, the United Kingdom, Italy, Norway, Spain, Sweden, and Germany, as well as the Nordic Development Fund and the Global Energy Alliance from the People and Planet.[57]
Sustainable Energy for All and McKinsey & Company initiated efforts to create Energy Transition and Investment Plans, for which Ghana is a target country, along with Kenya and Barbados. These plans are intended to help target nations achieve net-zero emissions by mid-century and are generally short- to mid-term efforts. Locals argue that these plans, as well at Just Energy Transition Partnerships(JETP) as a whole, must be used as a foundation for larger dialogue on the social, political, and technical opportunities and barriers to make better use of future financing programs.[58]
Other
Articles and resources
Related GEM.wiki articles
Proposed coal plants in Africa and the Middle East
Major Fossil Projects Affected by 2020 Oil Price Collapse
References
- ↑ “The World Factbook: Ghana,” Central Intelligence Agency, July 11 2023
- ↑ 2.0 2.1 2.2 2.3 2.4 2.5 “Ghana - Energy and Renewables,” International Trade Administration, July 22 2022
- ↑ 3.0 3.1 3.2 3.3 3.4 3.5 “National Energy Transition Framework 2022-2070, Abridged Version,” Government of Ghana, November 3 2022
- ↑ 4.0 4.1 4.2 4.3 4.4 4.5 Global Energy Monitor, Global Hydropower Tracker, May 2023 release.
- ↑ 5.0 5.1 5.2 5.3 5.4 5.5 Global Energy Monitor, Global Solar Power Tracker, December 2023 release.
- ↑ Global Oil and Gas Plant Tracker," Global Energy Monitor, February 2024.
- ↑ 7.0 7.1 7.2 “The future of Ghana’s energy mix: how to meet demand growth to 2030,” Energy for Growth Hub, August 2021
- ↑ 8.0 8.1 8.2 8.3 “Ghana Infrastructure Plan 2018-2047,” Grantham Research Institute on Climate Change and the Environment, 2019
- ↑ 9.0 9.1 9.2 9.3 9.4 Global Energy Monitor, Global Wind Power Tracker, December 2023 release.
- ↑ 10.0 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 “Ghana Renewable Energy Master Plan,” Government of Ghana, February 2019
- ↑ “Global Wind Atlas - Ghana,” The World Bank, 2023
- ↑ 12.0 12.1 12.2 12.3 “Integrated Power System Master Plan for Ghana: Volume #1, Executive Summary,” U.S. Agency for International Development, November 2019
- ↑ “Suspension of Issuance of Provisional Wholesale Electricity Supply Licences,” Energy Commission of Ghana, October 29 2018
- ↑ “Ghana,” U.S. Energy Information Administration, May 2018
- ↑ “Volume of natural gas imported into Ghana from 2009 to 2021,” Statista, April 2022
- ↑ “Petroleum and Other Liquids,” U.S. Energy Information Administration, Retrieved July 20 2023
- ↑ 17.0 17.1 “Ghana - Country Commercial Guide: Oil and Gas," International Trade Administration, July 22 2022
- ↑ 18.0 18.1 “Chevron's Nigeria pipeline under investigation,” Friends of the Earth International, July 13 2007
- ↑ “5th Progress Report to the Board of Executive Directors on the Implementation of Management's Action Plan in Response to the Inspection Panel Investigation Report No. 42644-GH on the West African Gas Pipeline (WAGP) Project,” International Bank for Reconstruction and Development and the International Development Association, May 2014
- ↑ “Nigeria-Morocco Gas Pipeline,” Global Energy Monitor, July 12 2023
- ↑ “Nigeria, Morocco, others sign agreements on gas pipeline project,” Premium Times Nigeria, June 16 2023
- ↑ “Ghana,” Clean Air Fund, Retrieved July 21 2023
- ↑ “National Green Jobs Strategy 2021-2025,” Ministry of Employment and Labour Relations, March 22 2021
- ↑ 24.0 24.1 24.2 24.3 “Off-Grid Solar Market Assessment: Ghana,” United States Agency for International Development, October 2019
- ↑ “Trainings,” Village Exchange International, Retrieved July 31 2023
- ↑ “Supporting Just Transitions to Sustainable Land Use in Ghana,” Climate Investment Funds, March 2022
- ↑ “GCAP Ghana,” Global Call to Action Against Poverty, Retrieved July 20 2023
- ↑ “Ghana,” Friends of the Earth International, Retrieved July 20 2023
- ↑ 29.0 29.1 “Explainer: Who holds Ghana's debt and what restructuring is planned?,” Reuters, December 9 2022
- ↑ 30.0 30.1 30.2 “Ghana's power producers urge government to pay $1.4 bln debt,” Reuters, March 23 2023
- ↑ “Ghana Power Firms Reject Move to Restructure $1.4 Billion Debt,” Bloomberg, March 23 2023
- ↑ “Ghana power producers call off shutdown after interim deal reached,” Reuters, July 1 2023
- ↑ “How Ghana, Africa’s rising star, ended up in economic turmoil,” Al Jazeera, December 31 2022
- ↑ “Ghana: Government,” Michigan State University, Retrieved July 13 2023
- ↑ “Who We Are,” Public Utilities Regulatory Commission of Ghana, Retrieved July 13 2023
- ↑ “About ECOWAS,” ECOWAS CEDEAO, Retrieved July 13 2023
- ↑ “Kigali Communique Outlines Principles for a Just and Equitable Energy Transition,” Rwandan Ministry of Infrastructure, May 20 2022
- ↑ “Ensuring a Just and Equitable Energy Transition in Africa: Seven Transformative Actions for SDG7,” Rwandan Ministry of Infrastructure, May 20 2022
- ↑ “Power Africa,” United States Agency for International Development, Retrieved July 14 2023
- ↑ “How Power Africa Works,” United Sates Agency for International Development, Retrieved July 14 2023
- ↑ “Power Africa in Ghana,” United States Agency for International Development, Retrieved July 14 2023
- ↑ “Who We Are,” Sustainable Energy for All, Retrieved July 14 2023
- ↑ “Country work - Ghana,” Sustainable energy for All, Retrieved July 14 2023
- ↑ “Renewable Energy Deployment in Ghana: The Hype, Hope and Reality,” Shanghai University, January 31 2020
- ↑ “Barriers that control the deployment of alternative energy sources,” MyJoyOnline, December 30 2023
- ↑ “Ghana Renewables Readiness Assessment,” International Renewable Energy Agency, November 2015
- ↑ 47.0 47.1 47.2 47.3 47.4 “Licence Manual for Service Providers in the Renewable Energy Industry,” Energy Commission of Ghana, September 2012
- ↑ “Get to know us,” Enclave Power Company, Retrieved July 14 2023
- ↑ 49.0 49.1 “Increasing Access to Stable, Reliable, and Affordable Energy for the Citizens of the Economic Community of West African States,” The World Bank, January 5 2021
- ↑ “Ghana Energy Outlook,” International Energy Agency, November 11 2021
- ↑ “Ghana Integrated Iron & Steel Development Corporation,” Ghana Integrated Iron and Steel Development Corporation, Retrieved July 17 2023
- ↑ “Independent power producers play larger role in Ghana's energy generation capacity,” Oxford Business Group, Retrieved July 24 2023
- ↑ 53.0 53.1 “Profile of VRA,” Volta River Authority, Retrieved July 17 2023
- ↑ “Who We Are,” Bui Power Authority, Retrieved July 17 2023
- ↑ “Ghana: Updated Nationally Determined Contribution under the Paris Agreement (2020-2030),” Republic of Ghana, September 2021
- ↑ “Energy & Power,” African Development Bank Group, Retrieved July 12 2023
- ↑ “Sustainable Energy Fund for Africa,” African Development Bank Group, Retrieved July 21 2023
- ↑ “Just energy transition for Africa dependent on transformative national processes, By Okereke, Treyer, et al.,” Premium Times, May 18 2023
