Ghana to consider fossil fuel for its energy mix in the short term


Vice President Dr Mahumudu Bawumia says natural gas will continue to be part of Ghana’s energy mix in the short term as the country takes steps to fully transition from fossil fuels to renewable energy by 2070.

The Vice President said as much as the Government was committed to achieving net zero carbon emissions by 2070, the country must strike a balance in the context of its social, economic, and environmental requirements in the transition process.

Delivering a virtual address at the opening of the 2022 Ghana International Petroleum Conference (GhIPCon) in Accra on Wednesday, September 28, 2022, Dr Bawumia said the Government would put strategies in place to increase the share of renewable energy in the mix from medium to long term.

“So, even though as a government, we are fully committed to achieving net zero carbon emissions by 2070, we also have to take steps to accelerate the production and utilisation of our oil and gas reserves.” Dr Bawumia said.

The three-day Conference is being organised by the National Petroleum Authority (NPA) in collaboration with the Ghana Chamber of Bulk Distributors (CBOD) and under the auspices of the Ministry of Energy.

The Conference will highlight the petroleum downstream industry’s perspective and guidance on issues of government policy and regulatory framework.

It is on the theme: “Energy Transition in the African Petroleum Downstream Context: Prospects, Challenges and the way Forward”

Dr Bawumia envisaged that the energy transition process would affect the demand for energy and the downstream industries that relied on the production and use of fossil fuels.

He said the transition might also lead to increased investment in renewable energy and the development of new technologies for the transportation and storage of energy.

He therefore urged players in the downstream sector on the African continent to focus on innovation and diversification in order to thrive and mitigate the impact of the transition.

“They should also keep an eye on the long-term implications of the transition and stay prepared for potential disruption in the future which can be turned into future growth areas,” the Vice President said.

Ghana has made a determined effort to phase out fossil fuels and transition to renewable energy, as a party to the 2015 Paris Agreement on Climate Change.

Currently, about 70 per cent of the country’s generation installed capacity of 5,321MW is from a thermal plant that uses natural gas as its primary fuel.

The Ministry of Energy has set up the National Energy Transition Committee (NETC), whose aim is to develop a national energy transition policy for the country.

Mr William Owuraku Aidoo, Deputy Minister of Energy, said the petroleum downstream industry was one of Ghana’s major contributors to greenhouse gas emissions, thus, the transformation of the sector was criticial to mitigating the impact of climate change on humanity.

He said Liquified Petroleum Gas (LPG), natural gas, hydrogen gas and biofuels blended with petroleum products were expected to play a major role in the country’s energy transition agenda in the petroleum downstream sector.

“The Ministry is putting in place the necessary fundamentals to ensure its plan moves from an ambition to reality.” Mr Aidoo said.

Dr Mustapha Abdul-Hamid, Chief Executive, NPA, said the Authority was committed to reducing the emissions from the energy products consumed in Ghana.

He said the petroleum downstream industry which had an annual sales value of about GHS32.94 billion, according to 2021 estimates, contributed 7.2 per cent of the country’s Gross Domestic Product (GDP).

The figure, Dr Abdul-Hamid added, represented a 41 per cent increase in demand for fossil fuels as compared to 2020.

“This is an unprecedented surge in consumption of fossil fuels when the annual average over the years had been between 5 per cent and 7 per cent,” he said.

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