Ghana: Energy Resources

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National access is about 66%. Electrification is very much an urban phenomenon with as high as 78% of urban inhabitants having access to electricity compared to less than 30% of their rural counterparts. The Greater Accra region has the highest electrification level of 96% while the Upper East Region is the least electrified at only 30%.

Apart from the main centralised hydro and thermal power generation, quite a number of industries have installed their own electric power generation plants, not connected to the national grid. The majority of the grid operates at 225kV or 161 kV, with international transmission links, including the West Africa Power Pool coastal transmission line of 330 kV, also being operational.

Energy procedure

The Energy Commission (EC, http://new.energycom.gov.gh/) is required by law to prepare, review and periodically update indicative national plans to ensure that all reasonable demands for energy are met in a sustainable manner. The Commission has developed and elaborated a Strategic National Energy Plan (SNEP) for the period 2006 - 2020.

The Energy Development and Access Project

In 2007, the World Bank approved US$95.5 million in financing for the Energy Development and Access Project to increase electricity access, supply, and reliability in Ghana, where rolling blackouts and inaccessibility continue to impede economic growth.  The project is to be implemented over a 6-year period, from November 2007 to November 2013.  The main objective of the Energy Development and Access Project is to support long-term efforts aimed at:

Improving the performance of power companies,

Increasing energy efficiency,

Scaling-up energy access to reduce inequity due to urban-rural imbalance, and

Enhancing renewable energy generation capacity.

The Appliance and Energy Efficiency Standards and Labelling Programme The program requires that importers and retailers of room air conditioners and Compact Fluorescent Lamps (CFL) import and sell only products that satisfy the minimum energy efficiency standards:

For room air conditioners a minimum energy efficiency ratio (EER) of 2.8 watts of cooling per watt of electricity input is required;

For CFL lamps a minimum light production of 33 lumen per watt and a minimum lifetime of 6,000 hours is required. Only products with these minimum performance standards receive a label. The more stars displayed in the label the more energy efficient the product.

Estimated energy savings from efficient room air conditioners are worth US$8 million, with 132,000 tons of CO2 emissions and power generation capacity savings of approximately 29 MW by 2010.

Appliance Energy Efficiency Project The project involves the introduction of appliance performance standards and labels that will guide consumers to make a choice with regard to energy efficiency of appliances before they purchase them; as well as the transformation of the refrigerating appliance market through a phase-out of used refrigerators because of the impact of ozone-depleting CFC gases used in such appliances. The project, which was approved in June 2011, was formally launched in October 2011. It is being funded by Global Environment Facility (GEF), the UNDP, the Multilateral Fund of Canada and the Government of Ghana. It is expected that the project will reduce the energy consumption of refrigerators from a national average of 1,200 kWh per annum, to 600 kWh per annum.

Ghana Energy Development and Access Project (GEDAP) The GEDAP is a US$227.5 million multi-donor project involving the World Bank’s International Development Association (IDA), Global Energy Facility (GEF), African Development Bank (AfDB), Global Partnership on Output-Based AID (GPOBA), Africa Catalytic Growth Fund (ACGF) and the Swiss Agency for Development and Cooperation (SECO). The development objective of the project is ‘to improve the operational efficiency of the electricity distribution system, increase the population’s access to electricity, and to help transition Ghana to a low-carbon economy through the reduction of greenhouse gas emissions’. The project has 3 main components:

Sector and institutional development;

Electricity distribution; and

Electricity access and renewable energy.

The GEDAP was approved by the IDA Board on July 26, 2007, and was declared effective on December 6, 2007, with an original closing date of November 30, 2012, which has been extended to November 2013.

The Electricity Access and Renewable Energy (EARE) component seeks to assist the Government to establish an enabling environment and facilitate market development to attract private investments in large-scale commercialization of renewable energy  and energy efficency improvement. The EARE has 4 components: 1. Renewable energy policy framework and renewable energy/energy efficiency (RE/EE) capacity building; 2. Large scale grid-connected renewable energy; 3. Mini-grid renewable energy and Energy Service Companies (ESCOs); and 4. Stand alone renewable systems. The EARE component is to be financed at a cost of US$162.5 million by the GEF (US$5.5m); IDA-GEDAP (US$15m); IFC/IDA MSME project (US$8m) and private sector/banks (US$134m).

These EARE components are yet to be implemented and therefore the various combinations of technology to be used in remote off-grid applications are yet to be identified. However in the absence of local manufacturing renewable energy technology companies, these technologies are estimated to be imported for the various initiatives under the EARE component of the GEDAP project.

The following are some of the achievements of EARE as of December 2010:

106 remote health facilities have been provided with solar systems.

Procurement process for solar systems in additional health facilities and remote teachers’ quarters are underway.

Contract awarded for socioeconomic study for island communities on the Volta river.

Off-grid electricity with photovoltaic (PV) systems successfully launched in 11 villages.

104 solar PV large systems, 263 solar PV small systems and 1,060 solar lanterns installed/supplied.

Operational manual for matching grants business development services modified to include renewable energy business.

Fund manager procured.

Capacity building for rural banks and solar companies on-going.

Capacity Building To expand generation capacity to 5,000 MW in the medium-term, additional capacity of 265 MW will be ready by the end of 2012. This will be done through the completion and commissioning of one unit of 133 MW out of the 400 MW Bui Hydroelectric Project by December 2012 and 132 MW capacity from the Takoradi 3 Thermal Project by June 2012. The Ministry of Energy intends to develop small and mini hydro power projects. Notable amongst such plants are the Juale (90 MW), Pwalugu (48 MW) and the Hemang (93 MW) hydro power plants. Studies are currently on-going for the development of the Pwalugu, Juale and Hemang mini hydro projects.

The Energy Commision (EC) has initiated a programme to support the installation of grid connected solar systems in some public institutions in the country. The Ministry of Energy is supporting the EC to undertake a more detailed wind resource assessment of the potential sites along the coast for the development of wind parks for power generation. The Ministry is also working with the Volta River Authority, the Bui Power Authority and other private developers to undertake further studies towards the development of small and medium hydro power systems. The VRA is setting the pace to install the first 2MW Solar Park for integration into the national electricity grid by 2015.

Energy debates

The country’s Renewable Energy Bill, which has a feed-in-tariff component to ensure return on investment for independent power providers, is currently in the advanced stages of being passed into Ghanaian law.

Energy sources

Total installed electricity capacity (2010): 2,011 MW Hydro: 60% Thermal: 40%

Total primary energy supply (2009): 9,240 ktoe Biofuels and waste:  69.5% Petroleum:  24.1% Hydro-electric:  6.4%

Ghana’s energy sector is characterized by huge dominance of traditional biomass resources. In terms of endowment and utilization, biomass (mainly woodfuels – firewood and charcoal – and to a lesser extent crop residue) is the most important primary energy resource in Ghana accounting for an average of 81% of primary energy and 76% of final energy consumed between 2000 and 2008. Petroleum accounts for 12% of primary energy supply and 17% of final energy consumed, while the share of electricity in the national energy mix is assessed at between 6% and 7% over the same period. However, the energy balance of Ghana is likely to be altered significantly following the discovery and commercial production of hydrocarbons since late 2010.

Rural households depend on wood (charcoal, firewood and crop/sawmill residue) for cooking, whilst about 60% of the urban households rely primarily on charcoal. Biomass resources cover about 20.8 million hectares of the 23.8 million hectare land mass of Ghana, and supplies about 60% of the total energy used in the country. The vast arable and degraded land in  Ghana has the potential for the cultivation of crops and plants that can be converted into a wide range of solid and liquid biofuels.

Electricity is produced from two main sources – hydro and thermal. Historically, Ghana has depended largely on hydroelectric power. Two hydroelectric plants, located at Akosombo (1,020 MW) and Kpong (160 MW) on the Volta River are responsible for up to 60% of installed generation capacity. The remaining 40% of installed capacity i.e. 831MW is produced from 5 thermal plants located at Aboadze, near Takoradi and Tema. However, thermal generation is projected to exceed hydro generation over the next decade with the majority of planned capacity additions expected to come from thermal sources. Peak electricity demand has been growing at a rate of 1.4% annually, from 1,258 MW in 2000 to 1,547 MW in 2010; while total electricity consumption has been growing at an annual rate of 3.3% from 7,539 GWh to 10,305 GWh during the same period.

Electricity demand, which in 2010 was 1400MW, is growing at about 10% per annum. It is estimated that Ghana requires capacity additions of about 200MW to catch up with increasing demand in the medium to long term.

Electricity is also obtained from other sources, for instance solar energy, mainly in off-grid applications, is mostly used in the Northern part of Ghana, where the heat from the sun is intense.

Regulatory roles

The PURC is mandated to regulate the water, electricity and gas sectors. The utility service providers under these sectors are: the Ghana Water Company, the Electricity Company of Ghana, the Volta River Authority (VRA) and the Northern Electricity Department of VRA. 

The PURC’s functions include:

Protecting the interests of providers and consumers, approval of rates and reviews of tariffs,

Monitoring performance standards and promoting competition among service providers.

Act 538 gives the PURC the power to make regulations that are necessary for the implementation of its mandates under the act. Two such regulations have been issued by the Commission.  They are the Public Utilities (Termination of Service) Regulations 1999, LI 1651 which set out the circumstances under which utility service to consumers may be terminated, and the Public Utilities (Complaints Procedure) Regulations 1999, LI 1651 which specifies the procedures by which any person (utility or consumer) may lodge a complaint with the commission.

Competition

The power sector has been unbundled to create an environment conducive for private sector investment. Approximately 1600MW of additional generation capacity is already under construction and is expected online in the short-to-medium term.

Although the VRA has a monopoly over the generation of power in the country, more than four independent power producers (IPPs) are already at different stages of power plant construction in Ghana.

Energy efficiency

The growth in the demand for fuel-wood and charcoal is estimated at 3% per annum. Electricity demand, on the other hand, is growing between 6%-7% annually while consumption of petroleum products is estimated to increase at about 5% per annum. Energy efficiency and conservation can help reduce these high growth rates.

The losses in the production, transportation and use of energy are also high. System losses in electricity distribution are about 25% while wastage in the end-use of electricity is estimated at about 30%. Reduction of losses in energy supply and more efficient use of energy would also reduce demand for energy and delay investment in energy supply infrastructure.

Efforts, in the past, have been made by the Ministry of Energy and other agencies to promote energy efficiency and conservation in homes and industries. However, These efforts have not resulted in sustained adoption of energy efficiency and conservation in the country owing to a number of financial and institutional obstacles. Empirical evidence also suggests that pricing of energy services has been successfully used to encourage consumers to adopt measures to conserve energy and use energy efficiently. In order to encourage energy efficiency and conservation in the development of the sector requires new innovative interventions to deal with the challenges.

Industry

Energy Demand Management Program – 30 MVA saved through power factor correction and load management since inception.

Energy auditing and energy management strategies from the Energy Foundation.

Utilities

Local capacity-building programs from the Energy Foundation.

Management from the Energy Commission for efficiency in generation and distribution.

Total hydro capacity will be 1500 MW when current projects are completed.

Over 6000 solar systems (3.2MW capacity) installed (off-grid application).

Transport

Fuel substitution under the UNFCCC – LPG, CNG, electricity considered for public transport.

Residential

Efficient Lighting Initiative – 6 million incandescent bulbs have been replaced by CFLs, funded by the government, saving 200-240 MW in capacity.

Mandatory “Ghana Electrical Appliance labelling and Standards Programme” (GEALSP) for CFLs and room air conditioning.

Public

“Energy Efficiency in Public Buildings Project” , retrofitting buildings with EE equipment and electrical devices, including universities and ministries.  

Capacity concerns

Ghana’s most pressing challenges lie in the power sector, where rapid demand growth and periodic hydrological shocks leave the country increasingly reliant on expensive oil-based generation. Ghana’s power tariffs are based on the costs of baseload hydropower priced at $0.05 per kilowatt-hour. However, the oil-based generation used to meet incremental demand is priced at more than $0.20. Since there is no mechanism for automatically adjusting tariffs, this situation generates annual financial losses for the Volta River Authority (VRA) of $400 million (3% of GDP).

The existing power plants are unable to attain full generation capacity as a result of limitations in fuel supply owing to rising fuel prices, as well as uncertainty in rainfall and water inflows into the hydroelectric power facilities.

Ghana has an extensive transmission system which covers all regions of the country. Transmission infrastructure has, however, deteriorated over the years, resulting in frequent interruptions in power supply, transmission bottlenecks, overloaded transformer sub stations and high system losses.

Government agencies

The Environmental Protection Agency (EPA, http://www.epa.gov.gh/) Among other activities, the Environmental Protection Agency Act seeks to ensure compliance with established environmental impact assessment procedures in development projects. Power generation and distribution activities are subject to EPA permits.

The Environment and Sustainable Development Department: To be able to comply with the environmental regulatory regime, the Volta River Authority (VRA) has established the Environment and Sustainable Development Department and has promulgated its Corporate Environmental Policy Statement. Accordingly, the VRA prepares all required pre-project environmental reports, namely Environmental and Social Impact Assessments (ESIA), Environmental Management Plans (EMP) and Annual Environmental Reports (AER) for all projects.

Energy regulation role

The Energy Commission (EC, http://new.energycom.gov.gh/)) is mandated under Act 541 of 1997 to plan, regulate, manage and develop energy supply and utilization in Ghana. The Commission is the technical regulator of the electricity and natural gas utilities. Specifically, the Commission is mandated to receive and assess applications, and grant licences to public utilities for the transmission, wholesale supply, distribution and sale of electricity and natural gas. In addition, the Commission is required to establish and enforce standards of performance for public utilities active in the sector, and promote and ensure uniform rules of practice for the operations of the sector.

Ownership

Electricity market Electricity generaion is undertaken by the state-owned Volta River Authority (VRA, www.vra.com), which operates the Akosombo Hydro Power Station, Kpong Hydro Power Station and the Takoradi Thermal Power Plant (TAPCO) at Aboadze. VRA is also a minority joint partner with TAQA, a private sector company which owns and operates the Takoradi International Power Company (TICO) thermal power plant also located at Aboadze. Bui Power Authority (BPA), another state-owned entity, is charged with the implementation of the Bui Hydro electric Power Project. In addition, independent power producers (IPPs) have been licensed to build, own and operate power plants. The IPP projects are at various stages of development.

The National Interconnected Transmission System (NITS) for electricity is owned and operated by the Ghana Grid Company (GRIDCO). GRIDCO is a state-owned company. The distribution of electricity is done by the Electricity Company of Ghana (ECG), a state-owned company, and the Northern Electricity Department (NED), a subsidiary of the Volta River Authority (VRA).

Liquid fuels market The Ghana National Petroleum Corporation (GNPC, www.gnpcghana.com) was established under the Provisional National Defence Council Laws 64 and 84 of 1983, as a state-owned entity to undertake the exploration and development of petroleum in the country.

Degree of independence

The PURC is composed of 9 members. This includes a Chairman, one person each nominated by the trades union congress (TUC) and the Association of Ghana Industries; one representative of domestic consumers, and one Executive Secretary appointed by the President of Ghana in accordance with the advice of the commission in consultation with the Public Services Commission.  Section 5 of the Act stipulates that apart from the chief executive, members of the commission shall hold office for five years, and shall be eligible for re-appointment on expiration of that period. Section 4 of the Public Utilities Regulatory Commission Act 1997 states that the Commission shall not be subject to any authority in the performance of its duties. Financing for the commission comes from government subvention and operational levies.

Energy debates

[[ and Wind Energy Resource Assessment (SWERA,  http://en.openei.org/apps/SWERA) project has developed detailed maps of wind and solar resources in Ghana. ]]

Energy framework

The 2010 Ghana National Energy Policy encompasses cross-cutting plans to manage the major challenge of fast-growing energy needs for the national development agenda. The policy contains three chapters (4, 5, 6) dealing with renewable energy deployment, waste-to-energy management and energy efficiency. These underline the need for improved support policy, and for the private sector's involvement to foster sustainable and efficient energy generation.

According to the National Energy Policy, Ghana's renewable energy development shall mainly focus on the vast mini hydro potential of the country. Twenty-one micro- and medium-hydro power sites, with generation capacities ranging from 4kW to 325 kW are identified within the policy as suitable for power generation. Ghana also has great potential for waste-to-energy and biomass management, mainly regeneration of woody biomass resources; as such the National Energy Policy places more emphasis on biofuel generation projects. Solar radiation also provides substantial potential for power generation, and increased government support for the national solar manufacturing sector forms part of national energy policy.

The Government has launched an “energy economy” initiative with mandates to increase renewable energy production, with particular attention to electrification of rural communities by 2020. The Government now understands that this goal may not be reached if electricity supply is understood as based on grid extension only. Off-grid solar photovoltaic (PV) projects have offered an interim solution. These projects have received funding since 1992 from donor agencies, but there is increasing recognition that such projects are unsustainable in the long term, given their high cost. The lifetime for a PV panel is about 30 years and the cost of replacement has not been set into the tariffs, which is a common problem. Recognizing the limitations, the Government and the regulator are working towards the creation of a level playing field for renewable energy by removing existing fiscal and market barriers, such as custom duty and value added tax. Current regulatory efforts are directed at the development of a pricing framework that encourages utility companies to adopt renewable energy as part of their supply mix.

Reliance

Ghana’s electricity supply is mainly produced from hydropower (two electric power plants) and thermal sources. These are supplemented with imports from neighbouring Cote d’Ivoire and Burkina Faso for domestic supply, especially during peak hours.

Ghana relies solely on imported petroleum product in the form of crude oil from Middle East and Nigeria Petroleum imports totalled 3,410 ktoe in 2007.

Role of the government

The Ministry of Energy (www.energymin.gov.gh) has the responsibility for developing and implementing energy sector policy in Ghana, and also supervises the operations of the Ghana National Petroleum Corporation, the Tema Oil Refinery, and the Volta River Authority. Additionally, the Ministry oversees responsibility of the Energy Commission. It is also the institution charged with the implementation of the National Electrification Scheme (NES) which seeks to extend the reach of electricity to all communities in the long term.

Regulatory framework

The Energy Efficiency (Refrigerating Appliances) Regulations, 2009, LI 1958.

Regulatory barriers

Ghana presents one illustration of the many factors that must be addressed in developing renewable energy. The jatropha plant, which requires little water and can grow on low quality land, has been a focus of biodiesel production. Since a national initiative was introduced in 2006, approximately 20 private companies (mostly foreign owned) have started large-scale projects, and as of 2009, 19% of all agricultural land has been planted with jatropha or earmarked for future production. But there are no specific bioenergy policies or regulatory frameworks to monitor these companies’ actions, and food security could arise as subsistence farmers are displaced to create large plantations.

Renewable Energy project developers and end-users have over the years found it extremely difficult to raise funds from local financial institutions to undertake investments in low carbon technologies and this has been a major barrier in Ghana. Other barriers include relatively low level of awareness and capacity constraints both in project development and regulation. [6] The lack of coordination between energy stakeholders and the absence of clear and enforceable rules for project procurement has meant that new power has not been procured in time and the country’s economy and people have suffered from inadequate power.

Energy regulator

The Public Utilities Regulatory Commission (PURC, www.purc.com.gh) is a statutorily independent body responsible for regulating  provision of electrical and water utility services to consumers, which was created under the Energy Commission Act 1997 (Act 541).

Renewable energy

Ghana is well endowed with renewable energy sources, particularly biomass, solar and wind energy.  The development and use of renewable energy and waste-to-energy resources have the potential to ensure Ghana’s energy security and mitigate the negative climate change impacts. The use of waste-to-energy resources has the potential to act as a significant part of the national sanitation programme.

Solar energy By virtue of its geographic location, Ghana is well endowed with solar resources which could be exploited. According to UNEP’s SWERA (Solar and Wind Energy Resource Assessment) maps, the northern part of Ghana receives fairly good solar radiation in the range of 3.5-4.5 kWh/m2/day. At this rate, the solar energy potential is enormous – some 35 EJ or about 100 times present energy consumption, even at a 10% recovery factor. This resource could supply electricity to rural areas in the northern region where the solar potential is highest and the electrification rate is the lowest in the country.

Wind energy As shown in SWERA maps, the strongest wind regime occurs along the Ghana/Togo border: 9.0-9.9 metres per second wind speed that can yield a wind power density of 600-800 Watt/m2 in the mountains over an area of about 300-400 square kilometres. The total wind energy potential of this area is estimated at around 300 MW capacity or 800 GWh electricity. Over a large area along the coast, high winds (6.2-7.1 metres per second at the height of 50 m) are also present -  total potential there is around 3000 MW capacity or 7,300 GWh.  The wind potential at the Ghana/Togo border (Volta Region) and along the coast of the Gulf of Guinea is suitable for grid connected large wind farms while the scattered wind potential can be exploited through stand-alone wind turbines.

Biomass energy Ghana has a suitable climate for plantation growth of Jatropha Curcas, which can be used for producing biodiesel, and the government of Ghana has developed a plan for such production. The development of alternative transportation fuels such as gasohol and other biofuels can provide substitute fuels for the transportation sector and help diversify and secure future energy supplies of Ghana.

Geothermal energy No study has yet been conducted into the potential for geothermal energy in Ghana.

Hydropower Ghana has a hydropower potential of 2,000 MW, of which 1,200 MW corresponds to large hydropower projects, and the rest in the form of small hydro power projects (SHP). A recent detailed study conducted in Ghana has also identified some 68 sites for constructing mini or micro hydro power plants. The total capacity of these mini/micro hydro plants has been estimated as 25 MW.