Renewable energy in Ghana: Prospects & Limits
Energy access- Africa
Access to energy is critical and one of the most sustainable means of transforming an economy. Universal access to energy is one of the main forces behind inclusive growth because it opens up opportunities for women, young people, and children in both urban and rural locations.
Over 640 million Africans lack access to energy, resulting in an electricity access rate of just over 40% for African countries, the lowest in the world.
Nearly 80% of the energy used for cooking in Sub-Saharan Africa is produced by the ineffective combustion of solid biomass, primarily wood or charcoal. Deforestation, greenhouse gas emissions, habitat degradation, and the loss of wildlife are all rising as a result of this.
Access to energy is essential not only for achieving goals in health and education, but also for lowering corporate expenses, maximizing economic potential, and generating employment.
Only a small portion of Africa’s huge energy potential, particularly its renewable energy potential, is now being utilized.
Hydropower provides around a fifth of the current capacity, but not even a tenth of its total potential is being utilized.
Similar to solar energy, biomass energy, wind energy, and geothermal energy all have great potential.
Counting the cost
In most instances, the debate around energy in Africa has focused more on accessibility, rather than on affordability.
Cross-country data on access are provided by a multi-institutional committee monitoring progress toward Sustainable Development Goal 7, which calls for “affordable, reliable, sustainable, and modern energy for all,” but no analysis on affordability.
In the majority of African nations, the cost of power for commercial clients is extremely expensive, placing huge burden on businesses who depend on affordable energy to boost production, generate jobs, and compete in a global market.
In Ghana, effective September 1, 2022, the Public Utilities Regulatory Commission (PURC) implemented an increase in electricity tariffs in Ghana by 27.15%.
Affordability and willingness to pay depend entirely on consumer groups and demographics. As more countries, including Ghana, explore and invest in multiple renewable sources of energy, affordability will gain attention
Energy access- Ghana
Ghana wants to industrialize, modernize its agriculture, and give its almost 32 million people access to economic opportunities. Electricity’s unstable and expensive supply as well as the sector’s large financial deficit are two major obstacles to this objective.
Access to affordable, dependable electricity will be the key to modernizing agriculture; boosting trade; empowering women; saving lives; enhancing transportation; growing industry; and enhancing communication.
The country’s energy demand has increased over the past ten years relative to supply. As a result, Ghana has ratified UN Sustainable Development Goal (SDG) 7, whose objective is to guarantee that everyone has access to modern energy that is affordable, dependable, sustainable, and clean.
This has increased Ghana’s economic potential and contributed to the gradual use of clean and renewable energy. For instance, 34% of the energy produced in Ghana in 2019 came from renewable sources, such as hydro-marine, solar, wind, bioenergy, and geothermal.
Ghana is doing relatively well when it comes to access to electricity in Africa. As of 2021, the rate of electricity access is 86.63 percent, with 50 percent of rural residents and 91 percent of urban residents connected to the grid.
The country also exports power to the neighbouring countries of Benin, Burkina Faso and Togo. The country’s power industry is composed of generation utilities, transmission and distribution companies, and independent power producers.
Energy & Renewable energy development in Ghana
In an industry that had previously been dominated by participants from the public sector, reforms in the power sector in the 1980s gradually removed obstacles and created a level playing field for the involvement of independent power producers.
Ghana’s existing plants have a total installed capacity of 5,134 megawatts (MW), with a reliable capacity of 4,710 MW. Ghana generates 66% of its electricity from thermal sources, with hydropower accounting for the remaining 33%.
The country has been involved in developing renewable energy sources since the mid-1960s, when the first hydroelectric dam was built. Prior to that time, a few scattered diesel generators across the nation served as the primary source of power generation.
As has been clear to all, recent global investments in renewable energy (RE) sources have reached previously unheard-of levels due to the volatility of fossil fuel prices, their rising costs, climate change, and efforts to minimize pollution.
Significant public health advantages come from producing electricity from renewable sources as opposed to fossil fuels. Breathing issues, brain damage, heart attacks, and cancer have all been connected to the pollutants that fossil fuel-powered plants release into the air and water (Machol, 2013).
Renewable Energy Masterplan
In an effort to contribute to the overall energy supply mix and minimise the adverse effects of energy production on the environment, the government of Ghana has identified renewable energy as a major option.
In fact, recent programs and projects, including renewable energy, have shown how effective renewable energy interventions can be at reducing poverty and enhancing the nation’s socioeconomic growth, particularly in rural areas.
In most situations, the renewable energy interventions in the country have either been carried out as pilot projects or on a short-term planning cycle basis. Thus, no clear integrated roadmap existed for the long-term development and promotion of the different renewable energy resources in the country.
To address the attendant effects of such short-term planning on the overall development of the renewable energy sector, the Renewable Energy Master Plan (REMP) was developed and published in 2019.
The Master Plan constitutes an investment-focussed framework for the promotion and development of the country’s rich renewable energy resources
Policy & Regulation Structure
The primary political decision-making body for the utilities industry is the Ministry of Energy (MoE), whose power directorate is specifically in charge of electricity.
There are equally other important bodies involved in regulations, generation, transmission and distribution of energy in Ghana.
These are the Energy Commission which enforces the sector regulations and undertakes energy planning for Ghana; electricity generation authorities – Volta River Authority (VRA), Bui Power Authority (BPA), and Independent Power Producers (IPPs); the transmission authority – Ghana Grid Company Limited (GRIDCo); and the distribution authorities – Electricity Company of Ghana (ECG) in charge of the southern part of Ghana, and Northern Electricity Distribution Company (NEDCo) in charge of the northern part of Ghana.
There is also the Public Utility Regulatory Commission in charge of setting tariffs for both the electricity generation and the distribution entities.
Like many other nations, Ghana is focused on incorporating renewable energy (RE) into its national energy mix to guarantee energy supply security, promote a cleaner environment, and lessen the effects of climate change.
A wide range of technologies and sources are included in renewable energy, some of which are more favoured due to their environmental friendliness than others. For instance, some people believe that solar and wind energy are superior to hydropower produced by large dams, which can release greenhouse gases (methane), encourage diseases associated with stagnant water, displacing populations, and causing drought.
Developing multiple Renewable energy sources is now a crucial investment need as the country aims to meet its energy demand whiles committing to climate change solutions through the reduction in carbon gas emissions.
About Author
Paul Frimpong, CGIA, ICC
Paul Frimpong is a development economist, top voice on Sino-Africa relations, and an award-winning entrepreneur.
He’s currently the Global Head of Strategy & Membership at the Institute of Certified Chartered Economists (ICCE).
This article is originally curated for and published by: Annan Capital Partners.
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