An ambitious target: Working to source 10% of power from modern renewables by 2020

While hydrocarbons have come to dominate the energy headlines in Ghana, the government is also looking at other means of generating power. Like most economies, the country wants to diversify its generation mix and investigate the potential for sustainable and renewable energy technologies.

While renewable energy in the form of biomass and hydroelectric power accounts for 78% of the country’s total energy consumption (with hydro supplying 68% of electricity generated, according to Gridco and the Energy Commission), the government has set the ambitious target of garnering 10% of electricity generation from modern renewable energy technologies – wind, solar, small hydro and biofuel – by 2020.

ALTERNATIVE SOURCES: For a country that currently has electricity capacity issues and generates less than 0.1% of its electricity from modern renewables, according to the Ministry of Energy (MoE), this is an extremely ambitious target. Indeed, not everybody believes that it should be a key priority for the government. Harriette Amissah-Arthur, executive partner at Arthur Energy Advisors, told OBG, “We have fundamental issues in the sector that need to be addressed without distracting the discussion with renewables.”

Nonetheless, the government has set out its stall and believes the country has significant potential for modern renewables. The MoE believes that 200-300 MW of potential in wind power, 20 MW in solar power, 150 MW in small to medium hydroelectric power and 90 MW in biomass can be realised by 2020. To achieve the goal of 500 MW from renewable sources, the government will require investments of $ 640m900m, according to the MoE. This will come from both larger power plants and localised, embedded generation. Edem Wordi, an advisor with the MoE’s Petroleum Directorate, said, “Some of this will feed into the grid and some will be localised [embedded]. In solar we are working with local communities.”

RENEWABLE ENERGY ACT: The government’s attempts to generate this investment will certainly be helped by the Renewable Energy Act 2011, as it enables the Public Utilities Regulatory Committee (PURC) to mandate feed-in tariffs for renewables. Furthermore, for each energy purchase an offtaker will be obligated to buy a certain percentage of electricity from renewable sources. The Ghana Renewable Energy Fund (GREEN Fund) has also been established to promote research and development of renewable technologies.

The first two provisions, in particular, create favourable conditions for rolling out renewables. For example, the north of the country is ripe for investment in the solar sector, an area that has already seen significant interest. According to the MoE, daily solar irradiation levels in the country range from 4-6 KWh per sq metre, while annual sunshine ranges from 1800 to 3000 hours. These conditions have largely been utilised for off-grid applications thus far, a situation that Amissah-Arthur believes the country should build on. “I think for solar applications, there are low-hanging fruits that can be taken before we get to solar for electricity and lighting. Such as, for example, solar for water heating.”

GAINING INVESTORS: The environment for renewables has already attracted the interest of private investors. In June 2012, the Canadian company Siginik Energy announced its 25-year power purchase agreement with the Electricity Company of Ghana (ECG) to build a 50-MW ground-mounted tracking solar installation in the Northern Region. Meanwhile, the Volta River Authority (VRA) has begun construction on a 2-MW photovoltaic solar plant at Navrongo, part of a plan to install 10 MW of photovoltaic panels in the country’s north. The electricity will be fed into the grid by the Northern Electricity Distribution Company following completion at the end of 2012. The VRA is seeking concessionary funding to develop the remaining 8 MW.

“The first 2 MW have been awarded to a Chinese company and construction started in March [2012]. Once we get those 2 MW out of the way, we should accelerate and we expect the next 8 MW to come on-line fairly quickly,” Kweku Awotwi, CEO of the VRA, told OBG.