Africa Destiny: Power and Energy Challenges in Ghana
Dr. Said El Mansour Cherkaoui
★ Strategic Catalyst Driving U.S.A-Africa and Morocco Investment, Trade, and Business Development ★ Policy Adviser in International Affairs ★ Accomplished Public Speaker ★ Distinguished News Editor ★
Update on 6/9/2024
SATURDAY NIGHT FEVER IN THE HEAT OF DARK NIGHT IN ACCRA
In the streets of Accra, people demanded an end to power cuts in Ghana on Saturday.
This country has been suffering from untimely interruptions in the supply of electricity for several years now; And according to civil society organizations, this cannot continue.
The term "Dumsor", derived from the Akan words meaning "off" and "on", refers to the frequent and unpredictable power outages that have plagued Ghana for years. This problem has had significant social, economic, and commercial impacts, particularly between 2015 and today.
The last serious Dumsor crisis began around 2012 and persisted with varying intensity. By 2015, the situation had become dire and led to large-scale protests and social media campaigns under the hashtag #DumsorMustStop, led by celebrities such as Yvonne Nelson and Sarkodie.
Frequent power cuts have seriously affected daily life. Households faced disruption, with students struggling to study in the dark and health services compromised due to unreliable electricity. Social unrest increased as people lost confidence in the government's ability to resolve the problem effectively.
Small and medium-sized enterprises have been hit hardest, with many businesses closing their doors due to the high cost of running generators. Nearly 50% of small industries experienced significant downtime, leading to lower productivity and lost revenue.
Update on 6/9/2024 - 3:22 PM - Oakland, California - USA by Dr. Said El Mansour Cherkaoui - Dr. Said Cherkaoui
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:?
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 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:?
Ghana’s energy sector is expected to see generation/supply shortfalls of at least:?
Ghana’s power supply sources include:?
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.?
“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.?
Ghana is building its strategic plan as a Model of a Productive Solution for the Energy Crisis and the Drought, using dual productivity and generation of power by combining the two productive areas of renewable energies, hydro and solar power alternate and substitutive extraction per the climate change and the oscillations of the weather and the depth of the drought impact.
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.
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:?
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.?
These technologies include:
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:?
Other possible solutions to the global energy crisis include:?
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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:?
The commission consists of seven commissioners responsible for:?Licensing, Renewables, Infrastructure, Efficiency.? The Ministry of Energy is responsible for:?
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
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:?
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:?
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:?
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.
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
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.
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. In line with Ghana’s mission to promote access to reliable, clean, and affordable electricity, Power Africa and the National Renewable Energy Laboratory assisted the Bui Power Authority (BPA) in conducting and reviewing 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. 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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TRI CK USA CALIFORNIA - January 24 to 27, 2024 - Oakland, San Francisco Bay Area, Silicon Valley, California - USA
Dreams are renewed each time we dare to dream bigger. The initiative taken by Ghana in combining traditional and renewable energy sources is truly inspiring. It's a brilliant example of innovation and foresight that can enlighten many other nations. Keep up the exceptional work!