Energy Deficit in Ghana - Matters Arising

By Kwesi Atta Sakyi 23rd December 2014

Ghana, with a population of 24 million people, depends largely on four to six main sources of energy for domestic, commercial, and industrial consumption. These are hydro-power from water, thermal electricity from diesel, petrol, gas, coal, wood, and kerosene. We depend much on hydro-carbons and fossil fuels for transport, as well as raw energy from charcoal and wood for domestic use in the rural areas. Alternate forms of energy supply such as wind farms, tidal, solar, and geothermal sources are not yet popular in Ghana.

In 1966, the Akosombo Hydro-Electric Power (HEP) Dam was commissioned. It was started by Nkrumah to supply the bulk of the power (60%) to the VALCO Smelter in Tema which was into aluminium processing from our bauxite mined at Awaso, Yenahin, Bibiani, Abontiakoon, among others, thereby adding value to our exports. The Dam was constructed by Impregilio Company of Italy, while the Smelter was built and owned by Kaiser Aluminium Corporation, which had similar plants in Kitimat and Fresno in Canada, and other plants in Jamaica and Guyana. Aluminium smelting is said to require enormous amounts of power, hence the construction of the Akosombo Dam whose finance was caught up in the Cold War geopolitics of the 60s. All the same, Nkrumah managed to pull it off with loans from the USA, the multilateral institutions, and other private financiers.

Aluminium is said to be one of the hardest, strongest, malleable, versatile, and lightest metals in the world, and in great demand for aircraft manufacture, window and door frames and panels, cooking utensils, roofing sheets, among other construction and industrial uses. Aluminium is also used for high tension electricity pylons, telecommunication towers, among other uses. Its atomic number is 13. It has indeed wide applications. I once gave private tuition to the children of some Indians who worked for Tower Aluminium Company in Nigeria. They had worked in Tower Aluminium Company branches in Kenya and Tanzania before being transferred to Nigeria. That was in the early 80s.

When in the 70s, the Japanese wanted to mine and utilize the bauxite deposits at Kibi in the Eastern Region; they had to abandon the project because VALCO increased their own power usage, and denied them access to extra power from Akosombo. Such was the power and clout of the Kaiser MNC. However, the initial agreement done by Nkrumah for the funding of the project precluded any third party from having access to extra power from Akosombo. JJ Rawlings, during his revolutionary years, managed to successfully renegotiate the agreement to the benefit of Ghana, after a long, gruelling, and protracted negotiation process. I remember Tsatsu Tsikata and Kwesi Botchway played prominent roles in that process.

The largest consumers of power in Ghana are the mines, VALCO, manufacturing companies, commercial households, and residential places. The installed capacity of power production in Ghana, according to the Ministry of Energy and Petroleum, is 2100 MW of which fossil fuel contributes 25%, Solar and Wind powers contribute 1% (Blue Energy), and Hydro-Electricity contributes 74%. Energy output is from both public and private generators, with the private sector generating 53% of the total output.

Experts surmise that Ghana currently requires an installed capacity of between 4000MW to 5000MW to meet its future growth potential. This is a tall order but with systematic planning, it is not an impossible target to attain. This is the time now to woo and attract outside investors, especially from the oil-rich Middle East countries to come and invest in our energy sector. Before that, we should ensure that we have a good country profile in terms of political stability, good governance, and transparency, prudent fiscal and monetary management, among others.

The danger now is that with global warming on the ascendancy, and with rainfall patterns becoming erratic and unreliable, as a result of deforestation and disturbance in the hydrological cycle, dependence on HEP is risky. Thus hydro-power is under threat. Besides, countries upstream may also build dams and disturb the flow of water downstream, as is happening between Sudan, Ethiopia, and Egypt over the Blue and White Niles.

The energy consumption per capita in Ghana is currently 298 Kwh. This is likely to zoom up with the growing number of educated people and mass exodus of young school leavers into the urban areas. Also having reached lower middle income status with a rapid increase in the middle class, our energy demand assumes a sophisticated stance; hence demand for more home gadgets and appliances.

The current load-shedding or Dumsor phenomenon should be a thing of the past, should all the additional power generation stations come on stream, especially the gas from our own Twenebowa oil field, and the supplement gas from Nigeria through the erratic West African Gas Pipeline (WAGP), and the supplement from the Aboadze Thermal Plant. With the Bui Dam completed, our power supply should stabilize in a year or two from now. What we need currently is efficiency and sanity in the management of our energy sector. We need to bring in experts from reputable energy companies such as ABB, Eskom, Siemens, among others to give us a second opinion on rationalization of the energy sector in Ghana, which is currently in a very chaotic situation.

There is too much politicisation, amidst the crave to put square pegs in round holes by the authorities, which is most unfortunate. President Mahama should sit up and get his act right, because it is the long run survival and wellbeing of Ghanaians which is at stake. It will be shameful for foreign investors to turn their investments away from our shores because of unreliable power supply.

A few years ago, our Foreign Direct Investment was increasing by the day, hence more demand for power. The GDP was growing at 14% against the current pitiable rate of 5%. Some people strongly believe that the frequent power outages in Ghana is politically- orchestrated and even though there could be some iota of truth in that, it could also be said that the massive inflows of FDIs have over-stretched our energy resources beyond our installed capacity, and we were caught off guard. I believe there is some truth in both speculations, apart from the glaring fact that supply has lagged far behind demand, leading to a critical power deficit. Many observers are at their wits end to know that we have Akosombo, Kpong, and Bui Dams in Ghana, yet we talk of power deficit. It is like living along the banks of the Great Volta or Fraw River, yet you have your bath with dust or ashes. What a paradox!

Domestic or residential consumers in Ghana take up 50% of the supply of electricity, industries gulp up 37.5%, and commercial users take up the balance of 12.5%. In 2007, the power deficit led to 1% reduction in GDP, which was quite serious indeed. That meant that productivity declined, exports suffered, and also employment was affected. The Akosombo Dam has six turbines with each producing 167 MW, a total of 1,042 MW. Ghana exports power to neighbouring countries of Benin, Togo, and Burkina Faso, a measure ostensibly to generate foreign exchange, and also to bring about good neighbourliness.

When it comes to regulatory and power generation authorities and oversight in Ghana, I am completely nonplussed and confused because there are a plethora of them. We have Electricity Company of Ghana (ECG), Volta River Authority (VRA), Public Utility Regulation Commission (PURC), Takoradi Thermal Power Plant (TAPCO), Northern Electricity Department (NED), Tema Oil Refinery (TOR), Ghana National Petroleum Company (GNPC), Ghana Grid Company (GRIDCO), Ghana Energy Commission (GEC), National Environment Commission (NEC), GEPA, Nzema Photo Voltaic Project, among many others.

There are clear signs of duplication, waste of resources, and a recipe for chaos. The national access to electricity is 60%, while access in northern Ghana is 30%. The growth in annual demand for power is estimated at 10%. There is therefore the need to accelerate the Rural Electrification Programme, to extend power to every nook and cranny of Ghana for rapid development, especially to the northern parts of Ghana. It is very shameful indeed that more than 50 years after independence, some parts of Ghana live in the dark without access to the national grid. Imagine a scenario of having a bleak Christmas without water or electricity supply, especially when you have some relatives visiting from abroad? What a national embarrassment!

Some of the problems assailing the energy sector in Ghana are due to corruption, incompetence, and logistical constraints. They include dealing with old and obsolescent equipment, overloading of transformers, illegal electrical connections, insider-trading by some managers to create business for generator set suppliers, system losses, among others. We may sometime in the near future have to look in the direction of nuclear energy supply, by closely monitoring and following the research findings made so far at the Kwabenya Nuclear Reactor.

Even though the risks are high, nuclear energy is another alternative source of energy which is however considered unsafe and environmentally hazardous. In such matters, government has to seek advice from our scientists and technologists such as Prof Francis Kofi Ampenyin Allotey and others, or better still, GAAS (Ghana Academy of Arts and Sciences). In Britain, the Royal Society and the Science Council drive science and technology-related policies.

The following could be some of the negative effects of power deficit in Ghana:

• Brain drain

• Reduction in tourism and loss of foreign exchange earnings

• Reduction in national output and productivity

• Lowering of the quality of life and standard of living in Ghana

• Loss of lives of people in hospitals on life support

• Loss of other services which rely on power supply such as water supply

• Increase in crime when power outages occur

• Increase in inflation and the cost of doing business in Ghana

• Increase in pollution and insanitary conditions when water is not running

• Reduction in FDI flows

• Increase in stress and frustration which can spark demonstrations

• Loss of business and lowering of profits

• Unpopularity of the government and the power utilities

Recommendations

1. Streamline the number of authorities in charge of power regulation in Ghana as there is too much duplication. Some of them should be scrapped or shut down or merged

2. Come up with a medium to long term plan of reform, restructuring, and rationalisation

3. Decentralise power supply and encourage the construction of power stations on rivers such as Pra, Tano, Ankobra, Black Volta, Oti, Kulpawn, among others

4. Increase the current public generation of electricity from 47% to say 60% because power generation is strategic and should not be dominated by the private sector

5. Decrease annual private investment from 60% to say 40% because this is a strategic resource which foreigners should not be allowed to control

6. Phase out old equipment and replace with more modern and efficient ones

7. Encourage exploration into using alternate, appropriate and sustainable energy sources such as geothermal, tidal, solar, biogas, biomass, Ethanol, among others.

References

https://energypedia.info/wiki/Ghana_Energy_Situation

www.energymin.gov.gh/?page_id=78

Contact: kwesiattasakyi449@gmail.com