The State of Ghana’s Energy Sector

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energy sector
energy sector

According to the World Bank, 84% of Ghana’s population is connected to electricity supply as at 2017, a high access rate, ranking Ghana second country in the Sub-Saharan African continent after South Africa but cited a disparity between rural and urban access. However, about 759 million people worldwide lack access to electricity and 3 out of 4 of these disadvantaged people live in Sub-Saharan Africa.

Ghana’s power supply is mainly from hydroelectric power, a form of energy that harnesses the power of water in motion to generate electricity. Some supportive power generation systems include fossil-fuel (thermal energy), and renewable energy sources. For more than half a century, hydroelectric power has been the world’s greatest source of renewable energy and a key low-carbon energy technology for many countries.

The Ministry of Energy, stated that Ghana has 4,132 Megawatts (MW) total installed capacity for existing power plants consisting of 38% hydro, 61% thermal and less than 1% solar.

Ghana’s energy sector is heavily controlled by public and state owned enterprises with fewer private sector players in its value chains. The Volta River Authority (VRA) and Bui Power Authority (BPA) control the hydroelectricity component of the power generation phase, whereas, VRA is also involved in some aspects of thermal power generation in association with Independent Power Producers (IPP). The Ghana Grid Company (GRIDCO) is fully incharge of power transmission across the country, whilst, Electricity Company of Ghana (ECG) and Northern Electricity Company (NEDCO) are in charge of distribution of power with Enclave Power involved in some minor role in the distribution chain. The 1980 reforms in the power sector created a level playing field for the participation of independent power producers in an area which hitherto had only public sector participants.

The Volta River Authority currently has a total installed generation capacity of 2,519 MW generating power from various sources including 1020 MW from Akosombo GS (hydro), 160 MW from Kpong GS (hydro), 330 MW from TAPCO (T1) (thermal), 340 MW from TICO (T2) (thermal), 110 MW from Tema Thermal 1 Plant (TT1PP) (thermal), 80 MW from Tema Thermal 2 Plant (TT2PP), 220 MW from Kpone Thermal Power Station (KTPS) (thermal), 250 MW Ameri Power Plant (thermal), 2.5 MW from Navrongo Solar Plant (renewable) and 6.5 MW from Lawra Solar Plant (renewable). In its annual hydro generation for 2021, Ghana projected a total of 7,001 GWh from its three (3) main stations; 5,650 GWh from Akosombo GS, 850 GWh from Kpong GS and 501.2 GWh from Bui GS.

Historically, after securing independence in 1957, Ghana decided to embark on a massive infrastructure investment including building roads, schools, hospitals, and factories that called for a reliable supply of power. In 1961, the Government of Ghana established the Volta River Authority (VRA) with the aim of generating hydroelectric power via the Volta River with loan financing from the World Bank and VALCO-USA. This led to the construction of Akosombo dam and a power station near Akosombo from 1962 to 1965 at a cost estimate of $200 million.

In 1968, electricity demand peaked at 540 GWh due to an increased demand for power after the successful completion of the Akosombo Dam. By 1972, the installation of two additional generation units increased Akosombo dam’s total generation capacity to 3321.23 GWh. In 1972, after Akosombo Dam’s increased total generation capacity to 3321.23GWh, Ghana became an exporter of electricity to Togo and Benin following the construction of a 205km 161kV transmission line from Akosombo to Lome. According to the 1966-1990 Volta River Authority’s Annual Report, Ghana recorded a sharp increase in domestic power consumption from 540 GWh in 1968 to 3917 GWh in 1976 with a 10% annual growth rate.

However, power consumption fell from 3917 GWh in 1976 to 3429 GWh in 1978 further to 1151 GWh in 1984, as a result of Ghana’s deteriorating economy. In 1982, the Kpong Hydroelectric Project was commissioned to provide an additional 160MW to meet the growing demand for electricity.

Same year, electricity supply decreased from 5180 GWh in 1981 to 1670 GWh while consumption during the same period decreased from 4652 GWh to 1151 GWh following the impact of the Economic Recovery Programme in 1983 with emerging industries and urbanization called for an increased demand for power from 1985, power consumption increased from 2083 GWh in 1985 to 4780 GWh in 1990. In 1998, Ghana recorded another power crisis, largely blamed on low rainfalls and inflows to the Volta Lake. This led to power rationing with a significant drop of electricity supply to consumers to 4942 GWh in 1998 while consumption dipped from 5110 GWh in 1991 to 4965 GWh in 1998. Between 2004 and 2005, Ghana experienced a short term load shedding and a repeated action in 2009 to 2011.

Energy emissions increased by 10.2 MtCO2e from 1990 to 2011, with transportation contributing the largest share (40%) of the increase as a result of the growing number of passenger vehicles and expanding domestic aviation industry as a result of increase from stationary energy, mainly of electricity generation plants and industrial sources, predominantly mining and quarrying.

The USAID Greenhouse Gas Emission in Ghana report indicated that Ghana recorded a total of 59 MtCO2e greenhouse gas, representing 0.13% of world’s total emission of 46,906 MtCO2e. According to the World Resources Institute Climate Analysis Indicator Tool (WRI CAIT), Ghana’s greenhouse gas emission is largely dominated by the Land-Use Change and Forestry (LUCF) with about 53% emission but electricity and heat emits 19%.

In recent times, Ghana experienced major power crises between 2012 and 2016 that gave it a popular acclaimed name, ‘Dumsor’, meaning, a persistent, irregular, and unpredictable electric power outage. This term has been widely used publicly by Ghanaians since 2012 out of frustration to express anger, mockery, worry and disappointments on the government’s management of electric power supply. The 2015 erratic power supply, rationing and constant blackouts led to a decreased socioeconomic related activities, unproductivity of state institutions, collapsed businesses, laying off workers, increased unemployment, health systems dysfunctioning, security threats and painfully loss of lives. It resulted in the death of both mother and new born baby at the Bawku Presby Hospital who gave birth and was on oxygen after power supply went off in February 2016.

The Institute of Statistical, Social and Economic Research (ISSER) in 2014 estimated Ghana to lose between $320 million and $924 million per annum in productivity and economic growth due to the then power crises. The Wholesale Power Reliability Assessment report (2010) also estimated Ghana losing between 2% and 6% of its gross domestic product (GDP) due to inadequate and unreliable power supply. Thus, with economic costs of inadequate power supply, a reliable and adequate supply of power becomes even more pressing.

In 2019, 15.7% of global primary energy came from low-carbon sources, that is, the sum of nuclear energy and renewables which includes hydropower, wind, solar, bioenergy, geothermal and wave and tidal (consisting 11.4% renewables and 4.3% nuclear). Hydropower and nuclear account for most of our low-carbon energy, combined they account for 10.7%. Wind produces just 2.2%, and solar 1.1% but both sources are growing quickly. Despite producing more and more energy from renewables each year, the global energy mix is still dominated by coal, oil and gas. 84% of most of our energy comes from fossil fuels but we continue to burn more each year. In the last 10 years, total production has increased from 116,214TWh to 136,761 TWh. In 2021, Ghana experienced some minor power rationing and load shedding between March and June for scheduled maintenance purposes.

Ghana failed to reach its commitment to universal electricity access by 2020 to ensure that supply is reliable and adequate. Respective governments have also failed in their preparation towards building a sustainable and resilient power hub to cater for the incessant power demand. Especially for a lower middle-income country like Ghana, it is important to recognize the growth of industries and the increasing population growth in relation to the increase in power demand. Ghana’s first power crisis in 1984, compounded by a major drought from 1983, disrupted the generating capacity of the Akosombo dam. Total inflow into the dam between 1982 and 1984 was less than 15% of the expected total and this triggered power rationing and a reduction of supply to neighboring countries Togo and Benin.

In its recent publication, World Energy Outlook 2018, the International Energy Agency (IEA) expressed worry over an impending shortfall in oil supply that will lead to a 25% increase in energy demand by 2040.

It is a predictable reality that this dramatic rise of electricity demand shall be born out of a global collective failure to tackle greenhouse gas emissions with a clear observation that from 0% in 1990 to 32.9% in 2012, the share of electricity generation from light crude oil, diesel and natural gas increased as Ghana diversified its supply to meet rising demand and enhance energy security. As a continuous trend, Ghana seeks to increase domestic natural gas production, natural gas imports and a potential coal import.

In 2010, the global transport sector accounted for 14% of the greenhouse gas budget and contributed to climate change through long-lived carbon dioxide and short-lived black carbon from diesel vehicles. Emissions from transport represent a major problem for cities around the world, particularly in developing countries that are witnessing rapid urbanization. Upsurges in vehicles are the fastest growing contributor to climate emissions and energy use.
On 24th March, 2021, The World Health Organization’s Urban Health Initiative report indicated that sustainable modes of transport in Ghana’s capital, Accra, could save up to 5,500 premature deaths with improvements to air quality and an additional 33,000 lives from increased physical activity over a 35-year period, for a total of US$15 billion from averted healthcare costs.

Suggestive Policies:
In order to achieve United Nations Sustainable Development Goal 7 by 2030, which is, “to ensure universal access to affordable, reliable, sustainable and modern energy for all”;

1. The Government of Ghana should endeavour to address its energy sector losses spanning from high fuel supply by thermal plants, shortage of gas supply, high payments for installed capacity, high distribution losses, revenue collection losses and non-payments by government institutions.
2. Government should consider a huge investment into adequate power supply infrastructure.
3. Research into alternative sources of energy rather than over-reliance on hydro and gas.
4. Provision of adequate access to electricity to reach the rural zones of the country.
5. Research on relatively cheaper cost of fuel for electricity generation.
6. Employ technology to manage transmission and distribution losses.
7. Enforce regulations to manage operational and management difficulties.
8. Address issues on climate change.
9. Promotion of energy efficient usage among the general public.

References:
Abeberese, A. B., Ackah, C. G., & Assuming, P. O. (2017, August). How did the 2012-2015 power crises affect small and medium manufacturing firms in Ghana. https://www.theigc.org/wp-content/uploads/2017/08/Asuming-et-al-2017-policy-brief.

Ackah, Charles (2015). Electricity Insecurity and Its Impact on Micro and Small Businesses in Ghana. ISSER – University of Ghana

Dedee, Joshua (2 February 2019). “The Return of Dumsor, The Bizarre Situation Of Wiamoase”. Modern Ghana. Retrieved 6 September 2020.

Ebenezer Nyarko Kumi. 2017. “The Electricity Situation in Ghana: Challenges and Opportunities.” CGD Policy Paper. Washington, DC: Center for Global Development. https://www.cgdev.org/ publication/electricity-situation-ghana-challenges-and-opportunities

Ghana Greenhouse Gas (GHG) Emissions 1970-2021. www.macrotrends.net. Retrieved 2021-08-08.

Eshun, M. E., & Amoako-Tuffour, J. (2020, October 21). A review of the trends in Ghana’s power sector. Energy, Sustainability and Society. https://energsustainsoc.biomedcentral.com/articles/10.1186/s13705-016-0075-y#Fn1.
Global fossil fuel consumption. Our World in Data. (n.d.). https://ourworldindata.org/grapher/global-fossil-fuel-consumption?country=~OWID_WRL

International Renewable Energy Agency (IRENA) (2012) Renewable energy technologies: cost analysis series. IRENA, Vol. 1 Issue 3/5, 2012. Sector overview. Home. (n.d.). https://www.energymin.gov.gh/sector-overview
IRENA (2018), Innovation priorities to transform the energy system, International Renewable Energy Agency, Abu Dhabi ISBN 978-92-9260-065-5.

National Geographic Society. (2019, May 30). Hydroelectric energy. National Geographic Society. https://www.nationalgeographic.org/encyclopedia/hydroelectric-energy/.
(n.d.). Ghana – energy sector. International Trade Administration | Trade.gov. https://www.trade.gov/country-commercial-guides/ghana-energy-sector.

The impact of renewable energy on Ghana’s economy. International Bar Association. (n.d.). https://www.ibanet.org/impact-renewable-energy-ghana-economy.

United Nations. (n.d.). – sdg indicators. United Nations. https://unstats.un.org/sdgs/report/2021/.
USAID (2016) Greenhouse Gas Emissions in Ghana, https://www.climatelinks.org/
Volta River Development Act (Act 46) (1961) Volta River Authority, Ghana.
World Resources Institute Climate Analysis Indicator Tool (WRI CAIT) 2.0, 2015.
World Bank (2017) Ghana – Energy Sector Transformation Initiative Project (P163984), Combined Project Information Documents / Integrated Safeguards Datasheet (PID/ISDS) Appraisal Stage | Date Prepared/Updated: 23-May-2018 | Report No: PIDISDSA24767.

Wikimedia Foundation. (2021, June 17). Electricity sector in Ghana. Wikipedia. https://en.wikipedia.org/wiki/Electricity_sector_in_Ghana.
World Health Organization. (n.d.). WHO urban Health Initiative RELEASES report on sustainable transport in Ghana. World Health Organization. https://www.who.int/news/item/24-03-2021-who-urban-health-initiative-releases-report-on-sustainable-transport-in-ghana.

Mohammed Sani, Research and Policy Analyst
Email: sanighana@gmail.com Call/Whatsapp: +233244053638

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