Archives September 2023

Septembre 30, 2023 1:25 am

While Ghana aspires to modernize and expand economic opportunity, it is constrained by a struggling power distribution sector and unreliable electricity for homes and businesses. As a leading trade hub in West Africa, Ghana’s economic success carries global significance.

Ghana, like many African nations, has long grappled with energy access and reliability issues, hindering industrialization in both urban and rural communities. Between late 2012 and 2016, Ghana experienced a severe electricity crisis called ‘Dumsor’.

This crisis was caused by a drought from the Volta Lake that threatened electricity production from the Akosombo Dam, Ghana’s largest energy generating station. The crisis triggered a severe power rationing programme resulting in heavy load shedding throughout the country. At the height of this crisis, consumers faced at least 16-hour power cuts every 24 hours. Henceforth, the country’s power sector has failed to keep up with increasing demand from a growing population of over 31 million people.

Ghana’s energy sector has significant debt. The country’s electricity access rate is 86.63%, with 50% of rural residents and 91% of urban residents connected to the electricity grid. 

In 2021, 86.63% of Ghana’s population had access to electricity. This is a 0.86% increase from 2020. 50% of rural residents and 91% of urban residents are connected to the electricity grid.  Ghana’s electricity access rate is one of the highest in sub-Saharan Africa. The Bank’s April 2023 Africa’s Pulse Report scored Ghana 81.2%. This was followed by: 

• Côte D’Ivoire (77%)
• Kenya (76%)
• Senegal (73.5%)
• Nigeria (69.1%)
• Rwanda (65%)
• Gambia (61%)

Ghana’s installed capacity is around 4,300 MW. In 2018, Ghana’s peak demand exceeded its installed capacity by more than 2,000 MW. Ghana’s main sources of thermal power are natural gas, diesel, and sometimes light crude oil. The country exports power to Benin, Burkina Faso, and Togo. 

Ghana’s electricity demand is expected to rise from 21.3 thousand gigawatt hours in 2021 to over 36.5 thousand gigawatt hours in 2030. However, Ghana’s actual availability of electricity rarely exceeds 2,400 MW due to: 

• Changing hydrological conditions
• Inadequate fuel supplies
• Dilapidated infrastructure

Ghana’s energy sector is expected to see generation/supply shortfalls of at least: 

• 467MW in 2025
• 916MW in 2026

Ghana’s power supply sources include: 

• Hydroelectricity
• Thermal fueled by crude oil, natural gas, and diesel
• Solar
• Imports from La Cote D’Ivoire

Ghana’s energy supply is dominated by thermal generation (68%), followed by hydropower (31%). Gas is the largest source of electricity production, followed by hydropower. 

Ghana’s Current Response to the Energy Crisis

Ghana unveiled its $550 billion Energy Transition and Investment Plan (ETIA) at the UN General Assembly on September 21, 2023. The plan aims to achieve net-zero emissions and universal energy access by 2060. It also aims to create 400,000 jobs. 

H.E. Nana Akufo-Addo, the President of Ghana launched the Ghana Energy Transition and Investment Plan on 21 September 2023 during the UN General Assembly.

“This pioneering “Energy Transition and Investment Plan” maps out Ghana’s journey to achieve net-zero emissions by 2060 based on the latest data and evidence, ensuring that as our economy thrives, it does so in harmony with the environment.” Declaration of his H.E. Nana Akufo-Addo, the President of Ghana.

The Energy Transition and Investment Plan includes: 

The Energy Transition and Investment Plan is expected to be the government’s main roadmap for achieving these goals. It will help Ghana achieve net-zero energy-related carbon emissions by deploying low-carbon. 

• Achieving net-zero emissions
• Creating 400,000 jobs
• Universal energy access
• 150 GW of solar PV
• Hydropower, biomass, solar energy, and wind energy

Ghana uses both renewable (10%) and non-renewable (90%) forms of energy.

To address energy shortfalls, the Ghana government introduced policy interventions in 2019 aimed at boosting the utilization of renewable energy and fulfilling its commitments to achieving Sustainable Development Goal 7 (SDG 7). The key of these interventions was the Government’s Renewable Energy Master plan, which sought to among others, increase the proportion of renewable energy in the national energy generation mix from 42.5 MW in 2015 to 1,363.63 MW by 2030.

Ghana integrated some renewable energy solutions into its national grid, which also includes a Hydro-Solar Hybrid (HSH) plant at Banda in the Bui enclave. This HSH plant, managed by the Bui Power Authority, has a hydro capacity of 404MW and a solar capacity of 55MW. The plant makes use of Huawei’s Smart Photovoltaic (PV) Solution to fuel the national grid which supports communities, factories, enterprises, and small-scale businesses of over 24,000 locals in the Banda community. Bui Power Authority – BPA supports the Government’s goals of increased renewable energy penetration in the country and its greenhouse gas reduction obligations.

Banda in the Bui Enclave – One megawatt floating solar at Bui, Bono East Region – Bui Power Authority

Aerial-view-of-the-5MW-Floating-Solar-at-the-Bui-Generating-Station. This is the strategy that Morocco should emulate to save energy, to produce clean energy near where it is needed most while protecting the reserve of water from evaporation during sunny days and recuperating the power produced during the night.

Bui Power Authority leads the way for floating solar Installation in the West African Sub-Region

Power Africa worked with the National Renewable Energy Laboratory to conduct and review grid impact and stability studies for the project, which is being built in installments of 50 MW to a total of 250 MW. The project generates renewable energy from solar that can operate during the day to complement existing hydropower production. The facility also features a 1 MW floating solar component. Due to increasingly low water levels, especially during the dry season, BPA opted to add a solar element to the existing hydropower plant. This move enables the plant to operate during the day, harnessing the vast solar radiation resource in northern Ghana while giving grid operators more flexibility to run the hydropower plant during the evening.

The most commonly used energy resources are: 

• Biomass (46.667%)
• Oil (40.52%)
• Natural gas (10%)

Ghana’s energy strategy is to diversify its energy portfolio and increase the role of renewables. 

The government’s Renewable Energy Master Plan (REMP) aims to increase the country’s renewable energy capacity from 42.5 MW in 2019 to about 1390 MW by 2030. 

The REMP is a US$ 5.6 billion investment plan, with more than 80% coming from the private sector. The plan is implemented over a 12-year time-space, from 2019 to 2030. 

Ghana’s energy strategy includes:

Ghana’s National Energy Policy focuses on the country’s vast mini hydro potential. Twenty-one micro- and medium-hydro power sites, with generation capacities ranging from 4kW to 325 kW, have already been identified as suitable for power generation. 

• Renewable energy: Ghana’s goal is to have 10% of its energy come from renewable sources by 2030. This includes adding 520 MW of solar, 325 MW of wind, and 60 MW of hydro from 2022 to 2030.
• Net zero emissions: Ghana plans to achieve net zero emissions by 2060 by using six main decarbonizing technologies. 

These technologies include:

• Small hydro potential: The government’s National Energy Policy focuses on using the country’s small hydro potential. Ghana has 21 micro- and medium-hydro power sites with generation capacities ranging from 4kW to 325 kW.
• Energy Sector Recovery Program: The Energy Sector Recovery Program (ESRP) was approved in 2019 to address cost under-recovery in the sector. The program is a five-year plan with 30 reform actions to bring the sector into financial equilibrium by 2023.
• Electrification and renewables
• Carbon capture and storage
• Low-carbon hydrogen
• Battery electric vehicle technologies
• Clean cooking technologies

Ghana’s energy mix is expected to provide affordable electricity at a generation cost below 4.5 cents/kwh. 

Some ways to solve Ghana’s energy crisis include: 

• Diversifying the electricity generation mix
• Expanding the prepaid metering system
• Having other independent power distributors
• Consulting energy experts and engaging civil society organizations
• Producing biofuels from plants like corn and soybeans
• Promoting the establishment of dedicated woodlots for wood fuel production
• Promoting the production and use of improved cookstoves
• Replacing high energy-consuming appliances with energy-efficient refrigerators, air conditioners, fans, and lighting systems

Other possible solutions to the global energy crisis include: 

• Moving towards renewable resources
• Buying energy-efficient products
• Lighting controls
• Easier grid access
• Energy simulation
• Performing energy audits
• A common stand on climate change

Ghana Actual Energy Supply Chain Management:

According to the International Trade Administration, Ghana’s energy sector currently relies on hydro and thermal generation fueled by crude oil, natural gas, and diesel. Thermal generation accounts for nearly 66% of Ghana’s power generation mix, with hydro accounting for 33%. In total, Ghana’s electric access rate stands at just over 86%, with 91% of urban residents and 50% of rural residents being actively connected to the electricity grid.

Ghana imports energy to secure its supply and promote inter-regional energy trade. Ghana imports natural gas from Nigeria through the West African Gas Pipeline. Ghana also imports petroleum fuel because it has limited oil reserves. 

Ghana’s over reliance on fossil fuels makes its energy insecure and threatens its economic growth and development. The country’s power sector cannot meet electricity demand. The Ghanaian government is turning to liquefied natural gas (LNG) as an alternative fuel source. 

These are the prevailing conditions of the Energy sector in Ghana and the Government is seeking an exit from such dilemma and challenging energetic deficiencies.

The Energy Commission of Ghana was established in 1997. The commission’s main objectives are to: 

• Regulate and manage Ghana’s energy resources
• Coordinate all energy-related policies
• Provide the legal, regulatory, and supervisory framework for all energy providers in the country
• Grant licenses for transmission, wholesale, and supply
• Advise the government on energy matters

The commission consists of seven commissioners responsible for: Licensing, Renewables, Infrastructure, Efficiency.  The Ministry of Energy is responsible for: 

• Formulating, monitoring, and evaluating energy policies, programs, and projects
• Supervising and coordinating the activities of Energy Sector Agencies
• Implementing the National Electrification Scheme (NES)
• Formulating and implementing laws and policies, such as the Renewable Energy Act of 2011

Foreign investments in Ghana

Kasoa, C/R, Ghana – With the inauguration of the Kasoa Bulk Supply Point (BSP) today, the United States has completed its nearly six-year $316 million investment in Ghana’s energy infrastructure, supporting more reliable power for hundreds of thousands of schools, hospitals, offices, and homes in Ghana. Jun 1, 2022

• USD 200,000 for joint ventures with a Ghanaian partner
• USD 500,000 for enterprises wholly owned by a non-Ghanaian
• USD 1 million for trading companies

Foreign Investments in Ghana’s Energy Sector: 

Ghana’s energy sector is becoming an increasingly attractive destination for foreign investment. The country has a high potential for solar energy generation and a favorable investment climate for solar energy companies. 

Here are some foreign investments in Ghana’s energy sector: 

• IFCAs of March 2023, IFC’s investment portfolio in Ghana was $446 million in financing and $12.5 million in advisory services.

Ghana’s top investing countries are South Africa, The Netherlands, France, Mauritius, and China. 

China is the world’s largest investor in Africa in terms of total capital. In 2020, China’s total stock of foreign direct investments (FDI) in Ghana was around $1.6 billion. 

In the first half of 2021, Ghana’s largest investment partners were: 

• Singapore: $307.50 million
• Australia: $204.01 million
• India: $61.57 million
• The Netherlands: $46.80 million

Some of Ghana’s other major foreign investors include China, The United Kingdom, South Africa, The Netherlands, and Australia.  China maintains the highest number of investment projects in Ghana, followed by India, the UK, South Africa, Turkey, Mauritania, and France. 

FDI flows in Ghana are mainly directed to the following sectors: 

The State Department says that foreign investors have limited market access in the following sectors: 

• Oil and gas, Services, Trade, Agriculture, Construction, Manufacturing. 
• Banking, Fishing, Petroleum, Mining, Real estate, Telecommunications. 

U.S. Investments in Ghana

Ghana and the United States have a strong economic partnership with bilateral trade reaching $2.7 billion in 2021. Following the success of the first Ghana Compact with MCC, which supported the country’s transport and agricultural sectors, MCC and the Government of Ghana renewed their partnership in 2014 and signed a $316 million Ghana Power Compact. Jun 1, 2022 — United States – The U.S. government’s Millennium Challenge Corporation (MCC) and the Government of Ghana formally completed the 5-year, $316 million MCC – Ghana Power Compact today, celebrating a partnership that created a more effective, sustainable, and inclusive power sector in Ghana.

MCC Deputy Chief Executive Officer, Mahmoud Bah (center), receives a tour of the Pokuase Bulk Supply Point (BSP), which is one of the four power stations built as part of the $316 million MCC-Ghana Power Compact. 

This new investment aimed to transform the country’s energy sector by investing in new power infrastructure, advancing energy-efficiency practices, and creating inclusive economic opportunities in the power sector that will support more reliable power for hundreds of thousands of schools, hospitals, offices, and homes in Ghana, including the Kasoa Bulk Supply Point.

Ghana’s government launched an Energy Transition and Investment Plan on September 21, 2023, during the UN General Assembly. The plan is intended to attract investors and the international community to help Ghana transition to energy. The plan is worth $550 billion and represents an opportunity for the international community to invest in Ghana’s sustainable development. 

Ghana’s main sources of thermal power are natural gas, diesel, and sometimes light crude oil. The country exports power to Benin, Burkina Faso, and Togo. 

Model for the Generation of Electricity in Morocco

Bui Power Authority – BPA – Model of Mix Generation of Electricity Combining the use of Solar elements added to existing hydropower Plant

The operational 50 MW phase of the Bui Power Authority hybrid-solar-hydro project. Photo Credit: BPA

Power Africa worked with the National Renewable Energy Laboratory to conduct and review grid impact and stability studies for the project, which is being built in installments of 50 MW to a total of 250 MW. The project generates renewable energy from solar that can operate during the day to complement existing hydropower production. The facility, which also features a 1 MW floating solar component, is expected to be completed in 2023.

Mr. Yaw Osafo-Maafo, Senior Minister on behalf of President Akufo-Addo, said, “This project further shows my government’s commitment to deliver on the promise to increase the renewable energy component in our energy mix to 10 percent by 2030.”

Due to increasingly low water levels in Morocco, as is the case in Ghana also especially during the dry season, BPA opted to add a solar element to the existing hydropower plant. This move enables the plant to operate during the day, harnessing the vast solar radiation resource in northern Ghana while giving grid operators more flexibility to run the hydropower plant during the evening.

This novel approach has the potential to be replicated with other utilities not only in Ghana but across the West African sub-region as well as in the entire Africa where similar challenges existed. This approach can lead to more sustainable forms of energy generation.

In line with Ghana’s mission to promote access to reliable, clean, and affordable electricity, Power Africa assisted the Bui Power Authority (BPA) to operationalize the first 50 megawatt (MW) phase of its 250 MW solar-hydro hybrid project. This first 50 MW plant resulted in the doubling of Ghana’s grid-connected solar energy and is expected to cut greenhouse gas emissions by more than 47,000 tons per year.

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In 2020, Ghana had enough gold refinery projects in the pipeline to be adjudged sub-Saharan Africa's biggest gold refining hub outside South Africa.

This was of course entirely in line with its status as Africa's largest gold producer.

Why then do Ghanaians, their leaders and… pic.twitter.com/n7SJPG7vT3

— Bright Simons (@BBSimons) August 13, 2024