Ghana readies to approve 1000mw wind power towards energy source diversification agenda
Adnan Adams Mohammed
As local and international advocacies mount pressure on
governments to diversify significantly their energy sources, Ghana Government
is gradually putting in place measures to attract investments in renewable
energies.
Last week, aSwiss based engineering firm, NEK, announced
that it was set to construct 1,000 megawatts of wind power for the Country as
part of efforts to implement the Renewable Energy Act (Act 832).
The Project which is only waiting for the government’s
greenlight to commence is to be executed in two phases. The first phase will
see 150 megawatts of wind power constructed and the second phase bringing about
850 megawatts onto the national grid.
It is believed that, NEK’s Wind Farms project will produce
electricity on a much cheaper level in a sustainable manner. The Ayitepa Wind
Farm, for instance will offer ECG an amount of 8.9 cent per kilowatt per hour
which is much less than any other electricity Producers can offer.
“NEK has supported the renewable energy plan by the
government of Ghana”, Jasmine Kappiah, the Project Manager of NEK has said.
In supporting the planned project and the energy source
diversification, the Institute of Energy Security (IES) agrees that, “Renewable
Energy is the way to go.”
“We think that renewables are the way to go. The best way
for the global economy to recover is through green recovery,” the Executive
Director of IES, Paa Kwesi Anamoah Sekyi has said in an interview.
A recently published article by the Institute for Energy
Security (IES) made a case for the strong consideration of Solar and Wind
energy sources in Ghana and Africa’s post-COVID recovery plan.
In the article authored by IES Research and policy Analyst
Raymond Nuworkpor citing multiple authorities, the IES said not only does the
adoption reduce pressure on the national grid because of “its unreliability in
terms of power supply”, but “provides cheaper sources of energy at more stable
generation and use levels, that enable businesses to adequately plan and grow.”
The institute added further: “The green energy sources are
rapidly becoming cheaper than fossil fuel powered plants. 56 percent of
capacity additions for utility-scale renewable power in 2019 achieved lower
electricity costs than cheapest coal plants. There will also be 23 billion
annual potential savings if the costliest 500 GW of existing coal were replaced
by solar and wind. Also, 1.8 gigatons of carbon dioxide reduction annually
possible, equalling to 5 percent of the total global carbon dioxide emissions
last year. And lastly, a cumulative global GDP will grow by US$98 trillion,
according to IRENA.”
The full article as captured and reproduced in this article
made very compelling and revelation and recommendations that needs critical
attention by Ghana government and others.
It said; during the first quarter of 2020, the world
recorded slumps in prices of crude oil, exposing its vulnerability and
volatility. Due to the coronavirus (COVID-19), crude oil prices plunged by
54.18 percent on average terms, starting the year on a high of US$66.74 to
close the first quarter of 2020 at US$30.58 per barrel. The price plummet was
so precipitous that at a point, a barrel of crude cost less than a meal at any
fast food restaurant. The suspension of exploratory works, slashing of
projected crude oil receipts, job losses, diversification of investment from
fossil fuel, withholding of shareholders’ returns, filing of bankruptcy et
cetera were the dominant features of the crude market in the first and second
quarter of year 2020.
COVID-19 has changed the world as we know it. The pandemic
has changed among others, the way we eat, the way we work, the way we
communicate. In International Energy Agency’s report, “World Energy Investment”
published in May 2020, the agency describes drastic changes in the energy
markets in the wake of the pandemic. The report reveals the largest fall in
energy sector investment ever and uncovers historic shift along the way. It
shows that for the first time ever, there will be more spending on electricity
than on oil. Most importantly, the report asserts that it is in the power
sector where the possibilities of transition to a low-carbon energy sector are
most apparent.
Although a separate report from the IEA noted that, newly
installed renewable power capacity was expected to decline by 13 percent this
year, the renewable (green) energy sector was proven to be disproportionately
resilient to the impacts of the pandemic.
Damilola Ogunbiyi, Chief Executive Officer (CEO) and Special
Representative of the United Nation (UN) Secretary-General for Sustainable
Energy for All (SE4ALL) and Co-Chair of UN-Energy, has noted that, “as
countries rebuild economies from the impacts of the pandemic, they are faced
with a unique once-in-a-generation opportunity to recover better with
sustainable energy.”
It will therefore not be shocking that the post-COVID-19 era
will be jam-packed with sustainable energy related programmes, and laggard
governments that are slow to adopt and advance their renewable energy
resources, risk being left behind – or worse, will completely be shut out. They
will suffer consequences such as slow social and economic development,
augmented environmental problems resulting from continued reliance on fossil
fuel energy resources.
Energy related matters, particularly the production of
electricity from renewable sources, are critical on the agendas of most
governments around the world today. The United Nations’ Millennium Development
Goals (MDGs), the Sustainable Development Goals (SDG 7- Access to affordable,
reliable, sustainable and modern energy for all by 2030) and the Paris
Agreement, emphasize the importance of energy sustainability, healthy ecosystem
and decarbonisation.
The UN Secretary-General’s SE4ALL initiative, clearly shows
how clean, affordable and safe energy can enable countries recuperate better
and leverage renewable energy to not only close the energy gap but also reset
their economies. The SE4ALL guide shows that African countries, through a
widespread, ambitious and genuine commitment to advancing comprehensive renewable
energy can achieve resilient economies with long-term growth, new jobs, cleaner
and healthier environments, increased Gross Domestic Product (GDP), improved
agriculture yields, and affordable and sustainable energy for all in the long
term.
It is an important fact that developing renewable energy is
a must-have, a make-or-break commodity. Hence, most governments have already
planned and are deploying strategies to achieve sustainable energy supply. Many
countries around the world have instituted objectives to adopt and utilize
renewable energy resources to shore up their power generation and consumption.
By the adoption of policies and pursuance of targets, countries like China,
United States (USA), Germany, United Kingdom (UK), Saudi Arabia, and the United
Arab Emirates (UAE) have become world leaders in renewable energy, and are
investing heavily into renewable energy technologies (RETs).
Germany for instance, continue to play a key role in the
energy transition conversation, investing heavily in technology, education and
research.
Germany has set for itself a 65 percent target by 2030,
requiring an increase in wind and solar generation capacity to between 215 and
237 gigawatts (GW) from 120 GW presently. Wind, solar and other clean energy
sources currently account for more about 40 percent of the country’s energy
production, having more than doubled over the past 8 years, according to
Reuters. The International Renewable Energy Agency (IRENA) figures for 2018
show around 284,000 people working in Germany’s renewable energy sector, the
vast majority in wind energy.
The story in Africa, especially sub-Saharan Africa looks
different, yet promising. A crucial source of concern is the worrying trend of
lack of access to affordable electricity and the unsteady nature of electricity
supply; factors which have been impediments to continental development and
energy security.
Isn’t it mind boggling that till date Africa, a continent
with the richest solar resources in the world, has installed only 5 gigawatts (GW)
of solar photovoltaic (PV), which is less than 1 percent of the global total,
as noted by the International Energy Agency (IEA). Meanwhile, the agency
projects that Sub-Saharan African countries are to witness the fastest growth
from 2020 to 2040, with demand for electricity doubling to over 1,600
terawatts-hour (TWh).
Morocco remains the leading country playing an important
role in Africa’s energy transition with the Noor Ouarzazate solar complex,
according to a June report by the African Development Bank (AfDB) Group. The
country is making strides to address Africa’s energy infrastructure deficit
challenge. The June 2020 Climate Action Tracker statistics, founds Morocco and
the Gambia as the only countries in the world on track to curb emissions to the
1.5°C limit urged by Paris Agreement and the UN’s Intergovernmental Panel on
Climate Change (IPCC).
In Ghana, businesses production and outputs over the years
have been affected in one way or the other, due to inadequate power supply or
power fluctuations. It is reported by the Institute of Statistical, Social and
Economic Research (ISSER) of the University of Ghana that Ghana’s power crisis
of 2012-2015 had a huge negative effect on manufacturing firms, which includes
the fold up of businesses and job loss. It is for such reasons that a push for
the utilization of renewable sources of energy is in the right direction. Not
only does this take pressure off the national grid with its unreliable power
supply, but also provides cheaper sources of energy at more stable generation
and use levels, that enable businesses to adequately plan and grow. Africa and
for that matter Ghana, stands to potentially benefit immensely with its small
and medium scale enterprises, households et cetera, as they explore and utilize
available sources of renewable energy to cut down on their energy expenditure.
According to International Renewable Energy Agency (IRENA),
jobs in renewables would reach 42 million globally by 2050; additional 21
million jobs through energy efficiency measures and 15 million jobs through
system flexibility. The green energy sources are rapidly becoming cheaper than
fossil fuel powered plants. 56 percent of capacity additions for utility-scale
renewable power in 2019 achieved lower electricity costs than cheapest coal
plants. There will also be 23 billion annual potential savings if the costliest
500 GW of existing coal were replaced by solar and wind. Also, 1.8 gigatons of
carbon dioxide reduction annually possible, equalling to 5 percent of the total
global carbon dioxide emissions last year. And lastly, a cumulative global GDP
will grow by US$98 trillion, according to IRENA.
Power generation cost by wind energy for instance continue
to rapidly plummet over the last decade per data gathered by IRENA. Onshore and
offshore wind declined by 39 percent and 29 percent respectively. The declining
cost of wind energy makes it cost effective and prudent investment, with the
same amount of money, investment value increases i.e. US$1 million invested
2010 yields 514 kilowatts (Kw), the value however increases to 679 kW in 2019
for onshore wind.
With the lowering cost of renewable energy sources,
renewable has demonstrated its robustness, stability, sustainability, and cost
effectiveness over this malignant Covid-19 period unlike the crude oil market.
The shift from a hydrocarbon based energy production to renewable energy
sources is pushing lot of investors, fund managers, and oil majors to
diversifying capital into renewable energy sources.
The sustainable recovery strategy by countries around the
world especially Africa must be to protect existing renewables project while
erecting the needed enablers to upscale infrastructure related to energy
transition.
Securing strategic funding for local industries and institutions
for a smooth transition from hydrocarbon based sources to renewables for an
inclusive growth and development, is something that cannot be overlooked.
The energy transition conversation must be a global
dialogue, with Africa as an active participant because of the enormous job
opportunities associated with renewable energy production, i.e. drastic
reduction in electricity tariffs, decarbonisation and minimization of climate
change related disasters. The renewable energy conversation does not mean pulling
the plug on fossil fuel overnight but rather providing the needed catalyst to
ensure adequate energy mix especially in Africa with it attended electricity
challenges.
It is the resilience of renewable to the COVID-19 pandemic,
combined with the falling cost of power generation from renewable energy
resources that has led many to forecast a significant increase in green
investment post-COVID-19, and Africa cannot miss out of this opportunity. There
is a strong consensus that renewable energy is the future emerging segment for
the energy industry, an opportunity for also green investors to acquire shares
at cheaper prices.
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