Ghana: Evolving Power Mix and The Energy Trilemma of Energy Security

Speaking at the Nigeria Energy Leadership Summit on the theme: ‘Unlocking New Value with Reforms, Investments and Technology’ the Ghana Minister for Energy, Dr. Matthew Opoku-Prempeh emphasized on the country’s power mix.

The Minister’s keynote address was delivered by Deputy Minister of Energy, Hon. Andrew Egyapa Mercer, on Ghana Country Project Spotlight.

He spoke on “How Ghana’s evolving power mix affects the energy trilemma of energy security, energy equity, and environmental sustainability”.

According to Mercer, the provision of stable, realistically priced, and universally accessible power in a sustainable and environmentally friendly manner is a key objective which cuts across the energy agenda and is indeed at the core of Ghana’s energy policy.

In this regard, Ghana’s approach has long shifted from viewing energy security, energy equity and environmental sustainability as three divergent paths at a crossroad; rather Ghana views the three as necessary destinations which needs to be arrived at simultaneously using the best possible routes available.

This underlying principle has informed the various policy interventions the Government of Ghana has rolled out over the years.

Ghana’s Energy Mix

Mercer made it known to guests that the electricity generation in Ghana has primarily been derived from hydro and thermal sources. However, there has been a gradual increase in the share of renewable sources due to efforts at diversify the generation mix; leveraging on favourable factors such as lower costs of PV technologies.

Hydropower was the leading source of electricity generation in Ghana between 2000 and 2015, with a share of up to 92%. This has seen a significant decline since 2016, with the share of thermal power increasing steadily, reaching a share of 65% in 2022.

In 2023, the share of hydropower decreased to 28.9% of the total installed generation capacity, thermal further increased to 68.5% with Renewable Energy sources increasing to 2.6%.

Currently, the total installed capacity is 5,454 Megawatts (MW) whereas dependable capacity is 4,843 MW with peak demand reaching 3,561MW in May 2023.

The Deputy Minister said Ghana’s evolving power mix plays a crucial role in addressing the energy trilemma, which encompasses three key aspects: energy security, energy equity, and environmental sustainability.

Diversification of Energy Sources

Ghana has traditionally relied heavily on hydroelectric power and thermal generation using fossil fuels like natural gas and fuel oils. However, the country’s dwindling hydro resources requires that it explores other indigenously available resource to diversify its generation mix.

This diversification enhances energy security by reducing dependence on a single energy source, making the country less vulnerable to supply disruptions due to factors like climate change, fuel availability, and geopolitical tensions.

Renewable Energy Integration

The incorporation of renewable energy sources such as wind and solar power reduces Ghana’s reliance on imported fossil fuels. Thus, contributing to energy security by reducing exposure to international energy price fluctuations.

The Government of Ghana’s policy therefore places emphasis on renewables and alternative energy as sources of power to complement conventional power. It is Government’s policy to scale-up renewable energy penetration by 10% by 2030.

The West African country is encouraging increased private sector investment in utility scale solar and wind energy projects. It is also accelerating the development of mini-grid solutions in off-grid and island communities for lighting, irrigation and other economic activities.

Increased Access to Electricity

Mercer pointed out that Ghana has made significant progress in expanding access to electricity in recent years, especially in rural and underserved areas. According to the Deputy Minister, the President of Ghana emphasized the aggressive target of the government to achieve universal access by the end of 2024 from the current rate of 88.54%.

This is consistent with the UN Sustainable Development Goal 7 (SDG7) which is to “ensure access to affordable, reliable and modern energy for all by 2030,” including universal access to electricity and clean cooking.

In furtherance of this, Government is determined to complete the electrification of about 200 islands and 2000 lakeside communities with an estimated population 1.25 million in the short to medium term.

In Ghana, currently, there are five mini grids in operation providing electricity to about 10,000 people and three mini grids under construction to serve some 6,000 people.

In December 2022, government launched full implementation of the Ghana Scaling-up Renewable Energy Program (SREP) with an $85milliom concessional facility from the Climate Investment Fund, African Development Bank (AfDB), and the Swiss Government.

The program will provide 12,000 net-metered solar energy for public institutions, small, medium enterprises and households; about 2000 off-grid solar home systems for basic schools, health facilities and individual homes; and the construction of 35 mini grids in island communities.

Ghana, I can proudly say, is well on track to achieving this SDG7 target by 2030.

Mercer said Ghana believes that through productive uses of electricity extended to communities across the country, socio-economic transformation agenda of government would be realized.

Challenges

He said achieving universal access comes with its own peculiar challenges as most of the outstanding areas are either islands or difficult to reach by roads. There are over 200 islands and more than 2,000 communities in twenty-three districts along the Volta Lake that cannot be immediately connected to the national grid.

The objective, therefore, is to provide such communities with decentralized energy solutions in the form of Mini grids or standalone solar systems.

The adoption of renewable energy sources, particularly off-grid solutions like solar power, has played a pivotal role in increasing energy equity by reaching communities that were previously without access to reliable energy.

Reducing Energy Costs

Renewable energy sources can help reduce energy costs for consumers, as they often have lower operating and maintenance expenses compared to fossil fuel-based power generation. This can alleviate energy poverty and promote energy equity, particularly for low-income households.

Reduced Carbon Emissions

The integration of renewable energy sources and the reduction of fossil fuel dependency contribute to environmental sustainability. By decreasing greenhouse gas emissions and air pollution, Ghana is taking steps to mitigate the impacts of climate change and protect public health.

Conservation and Biodiversity

The energy sector can have significant impacts on local ecosystems, particularly through large-scale hydropower projects. Ghana must carefully manage its hydropower resources to balance energy production with environmental conservation and biodiversity preservation.

It is important to note that while Ghana is making progress in addressing the energy trilemma through its evolving power mix, challenges remain. For instance, intermittent renewable energy sources like solar and wind require effective energy storage solutions to ensure reliable power supply.

Additionally, infrastructure development, policy implementation, and financial investments are essential for realizing the full potential of a sustainable energy transition.

These, especially financial investments are as we heard during yesterday’s deliberations significant hurdles that most African nations including Ghana, are grappling with and we must make conscious efforts at attracting the requisite investment to enable us to continue our quest at attaining Energy

Security and Equity

On Security, Mercer was of the view that Ghana’s evolving power mix, characterized by a shift towards renewables and greener energy access, has had a positive impact on energy security, equity, and environmental sustainability.

However, continued efforts, including policy support and infrastructure development, are crucial to achieving a more balanced and sustainable energy sector that effectively addresses the energy trilemma.