Ghana’s Parliament has passed the Renewable Energy (Amendment) Bill, 2020.
According to energynewsafrica.com’s sources, the Bill was passed last Friday, November 6, 2020.
The West African nation passed the Renewable Energy Act 2011 (Act 832) to spearhead the promotion of Renewable Energy.
Section 25 (1) of the Amended RE Act 2011, Act 832 emphasises the need for competitive procurement scheme for the purpose of attracting a competitive market rates for electricity generated from renewable energy sources.
It states that the competitive procurement scheme shall consist of (a) a tendering process and (b) an auction scheme.
It adds that a public utility shall not negotiate for a Power Purchase Agreement with a generator of electricity or contract power for electricity generated from renewable energy sources, unless the contracted power has gone through an open competitive and transparent procurement process.
The Amended Act also makes it mandatory for fossil fuel based electricity suppliers and companies that contribute to greenhouse gas emission to invest in non-utility scale renewable energies to offset their greenhouse emissions.
“A fossil fuel based wholesale electricity suppliers, a fossil fuel producer, and any other companies that contribute to greenhouse gas emissions shall invest in non-utility scale renewable energies to offset their Green House Gas emissions and mitigate the impact of climate change.”
Section 53 of the Amended Act also empowers the Minister to designate any public entity to execute and manage RE projects initiated by the state or in which the state has an interest.
Accordingly the BPA amendment Bill has also been passed to enable BPA to undertake RE and other cleaner energy projects designated to them by the Minister.
The amended Act, also defines hydro as a water based energy system which produces electricity. By this definition, Akosombo kpong and Bui power dams are defined as renewables.
Speaking to the Director for Renewable and Alternative Energies at the Ministry of Energy, Wisdom Ahiataku-Togobo, who confirmed the passage of the RE (Amended) Bill, said the Amended Act has scrapped feed-in-tariffs and replaced with a competitive bidding scheme.
A ‘feed-in-tariff scheme’ is a policy that obliges distribution utilities to buy electricity generated from renewable sources at a higher fixed price over a long period of about 20 years to guarantee return on investment.
He explained that at the time the RE Act was enacted, the cost of generating electricity from renewable especially solar was so high that distribution utilities were reluctant to buy the power and, hence, the need to introduce the feed-in-tariff policy to compel them to buy the power at a higher price of above 18 US Cents/kWh for distribution at a lower price. Today, price of electricity from utility scale renewable energy source is a good choice and should no more be an obligation.
He said, instead, there has been an introduction of a net-metering scheme for the purpose of encouraging self-generation of electricity from renewable energy sources on a power cost reduction or climate change mitigation basis and not for income generation.