Ghana's Power Sector: An Overview of Installed Electricity Generation Capacity and Challenges

Ghana's power sector is a dynamic and evolving landscape, characterized by a diverse mix of energy sources. As of November 2023, the total installed electricity generation capacity stands at 5,492.1 MW, with significant contributions from thermal power plants, followed by hydroelectric and renewable sources. Despite this impressive installed capacity, the sector faces critical challenges that impact its reliability and sustainability.

Breakdown of Installed Capacity

Ghana's Power Sector: A Breakdown of Total Installed Electricity Generation Capacity.

Hydropower Plants

Hydropower remains a cornerstone of Ghana’s energy mix. The major hydro plants include:

• Akosombo: 1,020 MW

• Bui: 404 MW

• Kpong: 160 MW

Together, these plants account for 1,584 MW, representing approximately 28.8% of the total installed capacity. Hydropower is a reliable and significant source of energy, contributing to the country's renewable energy targets.

Thermal Power Plants

Thermal power plants dominate the energy sector, with a combined installed capacity of 3,610 MW, or about 69.5% of the total capacity. Key contributors include:

• Karpower: 470 MW

• Sunon-Asogli Power (SAPP): 560 MW

• Takoradi International Company (TICO): 340 MW

Thermal plants, which run on natural gas, oil, and diesel, are crucial for meeting the base load and peak demands, especially when hydroelectric plants are less productive due to seasonal variations.

Renewables and Emerging Sources

Renewable energy sources, though currently a smaller fraction, are growing. The total installed capacity for renewables (excluding large hydro) is 117.15 MW, making up 2.1% of the total capacity. Notable installations include:

• BXC Solar: 20 MW

• Bui Solar: 55 MW

• VRA Solar (Navrongo): 2.5 MW

Renewable energy, particularly solar, is expected to play a larger role in the future as Ghana continues to invest in sustainable energy solutions.

Challenges in Fuel Supply and Financial Constraints

Despite the substantial installed capacity, Ghana's power sector faces significant challenges in maintaining a consistent power supply. One of the primary issues is the difficulty in securing adequate fuel to power thermal plants. Natural gas, oil, and diesel supply interruptions often lead to power shortages, commonly referred to as "dumsor," affecting both residential and industrial consumers.

Successive governments have struggled with financial constraints that hinder the procurement of necessary fuel. The high cost of fuel imports, coupled with inadequate financial resources, has led to frequent power outages and load shedding. This not only affects the reliability of the power supply but also increases operational costs for power generation companies, which are often passed on to consumers.

Impact on Small Businesses

The unreliable power supply has a profound impact on small businesses across Ghana. Frequent power outages disrupt operations, leading to reduced productivity and increased operational costs as businesses resort to alternative power sources like generators. This situation is particularly challenging for small businesses that cannot afford the high cost of backup power solutions, leading to significant financial losses.

For example, small manufacturing businesses face downtime during power outages, which affects their production schedules and revenue. Retail businesses experience reduced sales as customers prefer to shop in places with reliable power supply. Additionally, service-oriented businesses, such as those in the IT sector, suffer from data losses and equipment damage due to power fluctuations.

Future Outlook and Strategic Initiatives

To address these challenges, Ghana aims to increase the share of renewable energy in its mix. The country is also exploring the integration of nuclear power to diversify its energy sources and enhance energy security. The Ministry of Energy has laid out several strategies, including competitive bidding for utility-scale renewable projects and the development of mini-grids for remote communities.

Efforts are also underway to improve the efficiency and reliability of the power distribution network. The Electricity Company of Ghana (ECG), Northern Electricity Department (NEDCo), and Enclave Power Company Ltd (EPC) are key players in the distribution sector, ensuring that electricity reaches all corners of the country.

Conclusion

Ghana’s power sector is poised for growth, with a strong foundation in hydro and thermal power complemented by an increasing focus on renewables. Strategic initiatives and investments are essential to ensure a sustainable, reliable, and efficient energy future for the country. Addressing fuel supply challenges and financial constraints will be crucial in keeping the lights on and supporting the growth of small businesses across the nation.

For more detailed insights, you can refer to sources such as the Energy Commission of Ghana, the International Energy Agency (IEA), and the Ministry of Energy. Bernard Obeng Boateng

Lead Trainer

Finex Skills Hub

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