An expanding economy and growing population are increasing demand for power in Ghana and while lower levels of hydroelectric generation, sparked by a long-running drought, has reduced output, the forthcoming completion of several new plants should help ensure supply keeps pace with demand.
Ghana, which gets roughly half of its power from hydro and half from thermal, has an installed capacity of about 2800 MW, although actual generation capacity is 2125 MW, according to the Ministry of Energy, with demand rising 200 MW annually.
Water shortages as well as erratic gas supplies from Nigeria, irregular maintenance and the high cost of substitute heavy fuels have hampered Ghana’s generating output in recent years.
This prompted the government to commission the construction of two emergency power barges, which are set to generate 450 MW of power and be delivered in early 2015, in a bid to stabilise supply. These will be joined by new plants due to come on-line over the next two years as part of a gas master plan, and together should help significantly expand generating capacity and avoid load-shedding over the medium-term.
Ghana’s has struggled to meet demand for electricity at peak periods over the past few years – including most recently during the World Cup, when a push to maintain uninterrupted coverage prompted requests for reduced consumption by industry and the purchase of extra electricity from neighbouring Cote D’Ivoire.
The challenge has been exacerbated by uneven rainfall, which in recent years has left reservoirs at key facilities short, including the Bui and Akosombo Dams. Commissioned in 2013, Bui Dam, which has a capacity of 400 MW, has seen two of three turbines rendered inactive for parts of the year due to a lack of water.
In mid-August, officials said water shortages in the Akosombo Dam, the largest hydro installation in Ghana generating 1020 MW of power, could result in a total shutdown of the power station.
The low water supply has not been the only hurdle the country has had to clear. Delays in finalising gas infrastructure for the planned 500MW Atuabo gas plant and a decision by Nigeria to reduce gas exports for the West African Gas Pipeline as a result of growing domestic consumption have also strained the country’s generating facilities.
This led to urgent action during the year. Works started on two power barges, each of which will generate 225 MW, after several technical and commercial due diligence meetings and negotiations took place in Turkey and in Ghana early this year, the minister of energy and petroleum, Emmanuel Armah-Kofi Buah, said in September. The first barge, constructed by Turkey’s Karadeniz Energy Group (Karpower International), has been completed and its arrival is expected by the first quarter of 2015. The second barge is scheduled for the second quarter of next year.
“It would have taken an average of three to four years to put up a power plant but we felt there was the urgent need to request a power barge to stabilise power supply in the country,” said Armah-Kofi Buah in an interview with the local press. “This medium-term power ship will deliver to Ghana a quickly deployed and installed, operational grid-sized flexible power plant,” he said.
In addition to the barges, the government has already added some 1000 MW of generational capacity to the sector over the past 15 years through a mix of gas and hydroelectric projects, but with demand from both households and industry increasing significantly, the need for more supply is clear.
William Hutton-Mensah, managing director of the Electricity Company of Ghana (ECG), is confident that electricity consumption will expand significantly if the distribution grid is rehabilitated to allow ECG's customers to use all their electrical equipment during both peak and off-peak hours.
"Ghana is experiencing about 12% growth in electricity demand per annum," he told OBG in a recent interview. "On top of this, there is substantial suppressed demand in Ghana, owing to the additional electricity that customers would use if power generation, transmission and distribution challenges are addressed adequately."
As a result, the government has set itself a goal of nearly doubling capacity to 5000 MW by 2016. A 350-MW facility planned for the Western Region is set to play a key part in helping boost capacity. The plant, which includes an initial phase of 100MW, will be built by the Abu Dhabi company, TAQA, and represents the firm’s first venture in sub-Saharan Africa.
Meanwhile the long-awaited natural gas plant in Atuabo on Ghana's west coast is due to open in December. The project includes a 45-km shallow water pipeline to transport gas from the Jubilee field to Atuabo, a gas processing plant, and a 111-km overland pipeline to transport the fuel to thermal power plants. It is estimated that the plant will save the treasury around $500m every year in crude oil imports, according to local reports.
Help may also be on the way from the US government aid agency, the Millennium Challenge Corporation (MCC), which said it will invest up to $498m to increase generation capacity and improve the transmission grid in Ghana following an agreement signed on August 5.
In addition, distributors are working to reduce electricity losses largely caused by the illegal use of power from the grid and misuse by customers. "Power theft is the largest contributor to commercial losses in utilities," ECG’s Hutton-Mensah told OBG. "Information technology solutions and applications will mitigate this risk by monitoring consumption at various points of the supply chain as well as making pre-paid meters less susceptible to manipulation."
Follow Oxford Business Group on Facebook, Google+ and Twitter for all the latest Economic News Updates. Or register to receive updates via email.