3.1 Ghana’s electricity supply: Origins and highlights
State-operated electricity supply in Ghana dates back to 1914 under the then colonial government. These were fossil-powered stations that supplied limited electricity to selected cities such as Takoradi, Koforidua, Accra, Kumasi, Tamale, Cape Coast, Winneba and Tema (Clark, 1994; Eshun and Amoako-Tuffour, 2016). The biggest of these stations, the Tema diesel power station, had a generation capacity of 35,298 kilowatts. The first grid electricity transmission system was installed in 1963. It was a 161 kV transmission system to transmit electricity from the Tema power station to mostly Accra. The inauguration of the Akosombo hydroelectric power station in 1966 by the then independent Ghana Government marked a significant turning point in Ghana’s electricity sector. This large dam project resulted in the creation of one of the world’s largest man-made lakes, the Volta Lake. It is about 500 km long and about 8,500 km2 square large. The Akosombo hydropower station has a generation capacity of about 1,000 megawatts (MW). At the time of its inauguration, about 60% of the electricity output was used to power the smelter of the Volta Aluminum Company Limited. The remaining provided almost all of Ghana’s grid electricity. Ghana’s population then was about 5 million compared to the present population of about 30 million people. Moreover, the majority rural population had not been connected to the national grid. There was even surplus energy that was exported to neighboring countries Togo, Benin and Burkina Faso2. With increase in electricity demand as a result of increasing population, increasing industries and expansion of grid electricity to rural areas, the power supply from the Akosombo hydroelectric power station soon became inadequate. The supply shortfall has been addressed over the years through smaller hydroelectric stations and thermal power stations.
3.2 Ghana electricity supply: Present situation
The present Ghana electricity sector has three major actors: electricity producers, a transmitter company and distributers. The power producer category comprises both State companies and private companies. The State power producer is the Volta River Authority (VRA). It owns and operates the Akosombo hydroelectric power station, the Kpong hydroelectric power station, five thermal power stations and one solar plant. Collectively, the State-operated power stations have a present installed capacity of 2,269.5 MW and a dependable capacity of 2,031.75 MW (Energy Commission, 2020). The private power producers are termed Independent Power Producers (IPPs). The major IPPs are twelve thermal power stations and one hydropower station, with a total installed capacity of 2,867.5 MW and a total dependable capacity of 2,625.6 MW Commission, 2020). This energy is sold to the State for onward transmission and distribution. Table 1 provides further details of the present situation of electricity supply from State and private producers.
For 2020, the peak electricity demand was 2,957 MW, a marginal increase over the 2019 peak demand of 2,665.68 MW (Energy Commission, 2020). The total dependable grid capacity was 4,657.35 MW: approximately 30% hydro, approximately 69% thermal and about 0.64% solar; and approximately 44% State and approximately 56% Private (See Table 1).
The electricity transmitter category is a State company called Ghana Grid Company Limited (GRIDCO). It operates high voltage electricity lines that convey electrical power from the production areas to cities and towns where the power is consumed. The power distribution category is composed of two State companies: the Electricity Company of Ghana (ECG) which is responsible for electricity distribution in the southern and middle parts of Ghana, and the Northern Electricity Company Limited (NEDCO) which is responsible for electricity distribution in the northern part of Ghana. These two companies are responsible for bringing down the high voltages of the transmitted electricity to consumption voltages, distributing the power to homes and industries, and collecting revenues from the power users. There were attempts in 2019 to privatize electricity distribution in Ghana, but controversies surrounding the privatization stalled the process.
When the present situation of Ghana’s grid electricity situation is compared to situations in the past, the notable changes over the years are: transition from exclusive hydro electrical energy to hydro-thermal mix, with thermal constituting approximately 69% of present production; and transition from exclusively State supply to State-private supply mix, with approximately 56% of present supply coming from private companies (Table 1). These changes have been motivated by the need to expand energy supply to meet increasing demand of 10–15% per annum from increasing population, industries and grid expansion. Additional thermal plants and private electricity producers have mostly been brought on board during periods when the nation had run into power crisis. Ghana’s unstable electricity problems started as far back as 2001. It however peaked in 2014 and 2015, partly due to prolonged dry seasons during the period resulting in decreased electricity generation from the Akosombo hydroelectricity station. In 2015, the blackouts were so severe that the term ‘dumsor’, literally meaning ‘power off and on’ became a household term in Ghana. As quick fix, the then Government entered into a 10-year contract with the Turkish Karadeniz Energy Group for the provision of thermal electricity from two floating power ships. The agreement did not require Ghana to pay the upfront cost for the power ships but rather for the about 450MW electricity to be fed into the national grid.
The increasing transition to thermal electricity in Ghana has been accompanied by astronomical increases in electricity prices over the years. This is well captured in a remark the Managing Editor of the Insight local newspaper, Kwasi Pratt, made during a radio discussion at Adom FM in 2016:
“How can electricity bill that was around GH₵ 300 move to GH₵ 1200, when I complained, it jumped to GH₵ 1800; while we were still deliberating on this, it shot up to GH₵ 2000 something. The bill that was brought last month was just too serious, it was GH₵ 6000, I don’t even know whether to cry or to laugh about this,”- Kwasi Pratt, Managing Editor of the Insight newspaper (2016)3.
There is no written government policy driving the increasing transition from hydro power to thermal power. The increasing transition from State power production to private production is backed by a general government policy of Public-Private partnerships for infrastructure and better public services delivery, which is enshrined in a written National Policy on Public Private Partnerships (2011).
3.3 Ghana’s renewable energy agenda
New renewable energy has attracted attention in policy, with policy targets such as 10% of renewable energy in Ghana’s energy mix by 2030 (Renewable Energy Act, 2011), and renewable energy to 1,000 off grid communities by 2030 (Renewable Energy Master Plan, 2019). There is however limited action on the ground towards achievement of these new renewable energy targets. There are scattered solar energy projects in Ghana by both State and non-state companies but overall, Ghana has not moved beyond demonstration projects on new renewable energy to large scale adoption. New renewable energy presently accounts for less than 1% of the grid electrical energy mix (see Table 1). Ghana’s larger scale hydroelectricity projects (of over 100 MW) are not considered here, as the Ghana Renewable Energy Act (2011) considers only hydropower projects of up to 100 MW capacity as renewable.
2Source: https://www.energymin.gov.gh/sector-overview
3Source: https://www.ghanaweb.com/GhanaHomePage/NewsArchive/Gov-t-must-be-forced-to-reduce-electricity-bills-Pratt-442220