Gov’t considers clean coal

The Minister of Power Dr. Kwabena Donkor has said the country is focused on diversifying is sources of power generation in the face of dwindling hydro’s contribution in the energy generation mix, as government is vigorously perusing the introduction of clean coal into the energy mix.

The exploitation of clean coal energy is perceived to be a cheaper source of power for industrial use, which would promote competition and lead to creation of jobs for Ghanaians and also address environmental issues.

“This country is also moving on a new trajectory, which is that hydro is increasingly becoming a minor player in the generation mix; and therefore going forward other generation sources that are more expensive than hydro will have to become the dominant generation source: but Ghana has a responsibility to remain competitive; we are looking at the introduction of clean coal energy to address future needs while the renewable sector builds up.

“This government will continue to partner the private sector in order to provide efficient power supply to the country,” Dr. Donkor told stakeholder of the power sector at a ‘Strengthening Public-Private Partnerships in the Electricity Sector’ conference organised by the International Finance Corporation and Millennium Development Authority. It was also in collaboration with the Global Sustainable Electricity Partnership.

Confirming the proposed development of clean coal facility in the country, Dr. Donkor said a Public Private Partnership (PPP) arrangement is being considered and that the Volta River Authority (VRA) and China’s Shenzhen Energy Group -- parent company of Sunon Asogli Ghana Ltd. -- are currently undertaking pre-feasibility studies on the coal project: it is estimated to cost about US$1.5billion to build a 700-megawatt coal-fired plant after feasibility studies yielded positive results.

The project is expected to include two units of 350 megawatts, and a subsidiary coal port with a 50,000-tonne berth as a terminal to receive coal from overseas and transmit it to the plant.

Construction could take between 30 to 36 months, or even longer, depending on local conditions and available resources in the country.

Dr. Donkor explained that the country’s concept of an independent power producer recognises a shift from a traditional state-driven provision to private sector-driven generation -- adding that with the penetration of 80.5% accessibility, the country is definitely moving toward private sector-driven, with the state being in a regulatory mood to ensure equity, fairness, national cohesion, consumer progression and national development.

Presently, government is spearheading a policy on the use of clean coal for power generation to Parliament, as it strategises to address the decade-old power challenges facing the country.

This positions the country a step closer toward joining almost half of the world’s economies that use coal-fired plants to generate cheap electricity for its population -- amidst claims that coal is the dirtiest form of energy, producing high amount of carbon emissions.

It is believed that one can generate electricity at about 8cents per kilowatt hour using coal, as against the 13 and 14 cents being used in paying for other sources of thermal generation.

It will again require about 400-700megwatts to fix the current generation deficit; however, with an exponential growth of 12% demand per annum, this will not address the long-term.

In view of this, government is encouraging both conventional and non-conventional forms of generation by pushing for the use of biomass fuel plants, solar, wind-farms, tidal-powered generation as well as clean-coal fuel generation.

The country generates the bulk of its power from hydro sources, augmented by thermal generation using crude oil and gas from Nigeria as well as the country’s own gas deposits from Cape Three Points.

Dr. Donkor observed project financing as a major challenge facing the country’s power sector, which tends to delay the delivery of public projects. Thus, he asked stakeholder in the industry to adopt innovative ways of project financing that can provide the comfort that lenders would require in order to speed up the project-delivery process.

“In the power sector of the country, one major challenge being faced these days is the issue of project financing -- which tends to delay the delivery of public projects,” he said.

Chief Executive Officer of the Millennium Development Authority (MiDA), Owura Sarfo, indicated there are six projects under the Ghana Compact II which are structured to banish ‘DUMSOR’ in the medium to long-term energy needs of the country.

One of them, he said is: “the ECG financial and operational turnaround project, and one activity within this project is what we call ‘private sector participation in ECG’. Under this project, we intend to take a Concessionaire who will manage ECG’s business, operate ECG and carry out investments in the ECG’s business”.

Ing. Sarfo explained that electricity is a critical ingredient in the economic development of any country, and it has been proven there exists a long-term relationship between the economic growth of a country and electricity consumption -- particularly if that consumption is in the non-residential sector.

“Electricity is a limiting factor to economic growth, and disruption of supply -- as we currently have in Ghana -- normally has an adverse effect on economic growth. We can infer that in countries where the power reserve margin is very low, there is urgent need to find innovative ways of enhancing investment in this critical area.

“I think Ghanaians should resolve this once and for all. We should have the courage to do what is required to solve the Power Sector challenges, once and for all,” he said.

He recounted that in the early 1990s the World Bank, under its financing arrangement with government for the new Thermal Power Project at Takoradi, requested reforms in the Ghana power sector to enhance private sector participation.

“It was following this request that government set up the Power Sector Reform Committee. Subsequently, the Ministry of Mines and Energy engaged the services of a Consultant by name SYNEX of Santiago, Chile, to study the opportunities for reforming the Ghana Power Sector. SYNEX completed its study in June 1994.

“In 1997, government approved the power sector reforms policy -- which strongly advocated a complete reform of the power sector, and a very strong involvement of the private sector in the power space.

“Considering that in 2015 -- 18-years after approval of the power sector reforms -- we still have challenges in the electricity sector, it implies that we need to do more in this area,” Ing. Sarfo stated.