Ghana requires an additional generation capacity of about 225MW in 2023 and 480MW beyond 2024 in order to meet electricity demand, a study has revealed.
The West African nation has an installed energy generation capacity of 5,050MW comprising hydro, thermal and other renewable energy sources.
However, dependable generation is 4,742MW while available generation is around 3,181MW with peak demand hovering around 2,957MW as at March 2020.
Making a presentation at the second day of the 9th Ghana Economic Forum, which focused on Energy Sector, Mr. Wisdom Ahiataku-Togobo, Director of Renewable and Alternative Energies at the Ministry of Energy, said electricity demand, is projected to grow by 11 percent.
“Looking at our energy demand and supply output, we have been hearing always about excess demand. Yes, but how does it project into the future? This is a study from the power sector institutions and it shows clearly that Ghana has adequate generation to meet demand till around 2023. Beyond 2023, there is the need to add 225MW to be able to meet the 18 percent reserve margin requirement,” he said.
Challenges In The Sector
Touching on the current challenge confronting the power sector, Mr Ahiataku-Togobo said there is the issue of increased generation capacity currently in excess of demand, higher electricity generation cost resulting in reduced demand for power for industrialisation, loss of revenue due to payments of capacity charges on ‘Take or Pay’ PPAs, weak transmission and distribution infrastructure leading to high technical and commercial losses, delay in payment of electricity utility bills by residential and non-residential consumers and in particular government buildings-MDAs, hospitals, schools, security services among others-and difficulty to extend electricity to the hard to reach islands and lakeside communities along the Volta Lake.
According to him, the ‘Take or Pay’ situation is getting worse with more service sectors shifting to the use of diesel and solar powered complementary generation; further reducing demand on utility distribution system.
Measures To Address The Issues
On the measures to address the challenges in the power sector, Mr Ahiataku-Togobo mentioned that steps have been taken to negotiate for price reduction for existing IPPs in operation, re-scheduling Commercial Operation Dates (COD) of new IPPs with PPAs and renegotiating price downwards, transition from use of HFO to NG for thermal power plants, explore cheaper power generation options below 6cents/kWh to support industrialisation, placing moratorium on PPAs for new power plants (Thermal and Renewable) until issues with excess generation are addressed, as well as implementing Cash Water Fall Mechanism (equitable distribution of revenue alone the value chain).
Other measures he said are being pursued include implementing innovative mechanism for electricity consumers to regularly pay their own electricity bills (Prepaid meters, Gov. Go Solar Programme etc.), Short to medium term policy directions in the power sub-sector, procuring new power generation plants through competitive bidding, strengthening and upgrading strategic transmission networks to support rural electrification and enhance power export to neighbouring countries, replacing absolute and inefficient networks some of which are over 50 years, reducing technical and commercial losses in distribution networks; prepaid meters among others and supporting investments in renewable energy sub-sector, particularly in mini-grid and offgrid systems for remote communities not easily accessible by road.