Ghana - EnergyGhana - Energy
Overview
Ghana’s power sector involves the generation, transmission and distribution of electrical energy for industrial, commercial and domestic use. Ghana’s main sources of electrical power are hydro, thermal and solar. Ghana’s thermal generation plants have relied primarily on light crude oil (LCO) or diesel as a fuel source, both inefficient and expensive. Access to reliable power has been identified as a major impediment to economic development. A growing focus of the U.S. government’s efforts to facilitate economic growth in Ghana is now directed at improving power production and access to electricity. Ghana has been included in U.S. government’s Power Africa initiative. Currently, Power Africa is supporting eleven transactions that are in the pipeline and have the potential to add over 2000 MW to Ghana’s grid over the next three to four years.
State-owned entities involved in the power sector include: the Volta River Authority (VRA), Ghana’s state-owned power company; the Ghana Grid Company Limited (GRIDCo), the largest state-owned transmission company; and the Electricity Company of Ghana (ECG), the state-owned power off-taker and utility. ECG will no longer be the power off-taker and utility as a result of privatization throughthe U.S. government’s Millennium Challenge Corporation’s (MCC) second compact with the country.
After completing its first MCC compact in 2012, MCC granted Ghana a five-year second compact focused on reforming the energy sector. The first leg of the initiative aims to reform the main public electricity distribution company through the introduction of private sector participation and the second aspect will provide targeted infrastructure investment and reforms in power generation. While the central tenet of this investment is securing the 20-year private concession, MCC will also invest in regulatory reform, increasing access for small and medium enterprises, and improving energy efficiency and demand-side management. The winner of the concession, Philippines-based MERALCO, is in final discussions with the government of Ghana over the terms of the agreement to solidify its position as the new operator, taking the place of ECG.
Growth in the Ghanaian population is driving up electricity demand. The current access rate of electricity in Ghana is estimated at 83 percent, with 91 percent in urban and only 50 percent in rural areas. An estimated 1.2 million of households are presently without power supply. Solar energy is used in some remote off-grid locations and at a single on-grid facility (a small pilot project in the country’s north).
Ghana is currently far short of its stated goal of ten percent renewable contribution by 2020. Some interest – though likely highly unrealistic – in nuclear power has been expressed over the longer term. Ghana does currently have a small research reactor. Wind power generation is being explored by a few firms, but no firm plans are in place. Biomass (wood fuel) continues to meet more than 60 percent of Ghana’s total energy needs.
Sub-Sector Best Prospects
Although longer term plans are in place to increase the share of renewable power in Ghana’s energy mix, in the shorter term more traditional power sources are likely to dominate as Ghana continues to try to reduce the consumption of biomass (in the form of wood fuel) and increase access to the power grid across the country. Eighty-three percent of all Ghanaian households are connected to the national power grid but the government is seeking entrepreneurial private sector participation to ensure the remaining fifteen percent of the country also has access to affordable power.
Ghana is involved in the development of the West Africa Power Pool (WAPP), aimed at establishing a regional market for electricity trade. WAPP is intended to integrate the operations of the national power systems into a unified regional electricity market, which will, over the medium to long term, assure the citizens of ECOWAS Member States a stable and reliable electricity supply at competitive cost.
Ghana is already connected with its western neighbor, Cote D’Ivoire, and its eastern neighbors, Togo and Benin. Plans are underway to interconnect with its northern neighbor, Burkina Faso.
Opportunities
A number of opportunities exist in generation, transmission and distribution. For an up to date list of current projects please contact the U.S. Commercial Service Ghana.
Web Resources
West Africa Power Pool
Volta River Authority
Ghana Energy Commission
Ghana Grid Company Limited
Electricity Company of Ghana
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Ghana’s power sector involves the generation, transmission and distribution of electrical energy for industrial, commercial and domestic use. Ghana’s main sources of electrical power are hydro, thermal and solar. Ghana’s thermal generation plants have relied primarily on light crude oil (LCO) or diesel as a fuel source, both inefficient and expensive. Access to reliable power has been identified as a major impediment to economic development. A growing focus of the U.S. government’s efforts to facilitate economic growth in Ghana is now directed at improving power production and access to electricity. Ghana has been included in U.S. government’s Power Africa initiative. Currently, Power Africa is supporting eleven transactions that are in the pipeline and have the potential to add over 2000 MW to Ghana’s grid over the next three to four years.
State-owned entities involved in the power sector include: the Volta River Authority (VRA), Ghana’s state-owned power company; the Ghana Grid Company Limited (GRIDCo), the largest state-owned transmission company; and the Electricity Company of Ghana (ECG), the state-owned power off-taker and utility. ECG will no longer be the power off-taker and utility as a result of privatization throughthe U.S. government’s Millennium Challenge Corporation’s (MCC) second compact with the country.
After completing its first MCC compact in 2012, MCC granted Ghana a five-year second compact focused on reforming the energy sector. The first leg of the initiative aims to reform the main public electricity distribution company through the introduction of private sector participation and the second aspect will provide targeted infrastructure investment and reforms in power generation. While the central tenet of this investment is securing the 20-year private concession, MCC will also invest in regulatory reform, increasing access for small and medium enterprises, and improving energy efficiency and demand-side management. The winner of the concession, Philippines-based MERALCO, is in final discussions with the government of Ghana over the terms of the agreement to solidify its position as the new operator, taking the place of ECG.
Growth in the Ghanaian population is driving up electricity demand. The current access rate of electricity in Ghana is estimated at 83 percent, with 91 percent in urban and only 50 percent in rural areas. An estimated 1.2 million of households are presently without power supply. Solar energy is used in some remote off-grid locations and at a single on-grid facility (a small pilot project in the country’s north).
Ghana is currently far short of its stated goal of ten percent renewable contribution by 2020. Some interest – though likely highly unrealistic – in nuclear power has been expressed over the longer term. Ghana does currently have a small research reactor. Wind power generation is being explored by a few firms, but no firm plans are in place. Biomass (wood fuel) continues to meet more than 60 percent of Ghana’s total energy needs.
Sub-Sector Best Prospects
Although longer term plans are in place to increase the share of renewable power in Ghana’s energy mix, in the shorter term more traditional power sources are likely to dominate as Ghana continues to try to reduce the consumption of biomass (in the form of wood fuel) and increase access to the power grid across the country. Eighty-three percent of all Ghanaian households are connected to the national power grid but the government is seeking entrepreneurial private sector participation to ensure the remaining fifteen percent of the country also has access to affordable power.
Ghana is involved in the development of the West Africa Power Pool (WAPP), aimed at establishing a regional market for electricity trade. WAPP is intended to integrate the operations of the national power systems into a unified regional electricity market, which will, over the medium to long term, assure the citizens of ECOWAS Member States a stable and reliable electricity supply at competitive cost.
Ghana is already connected with its western neighbor, Cote D’Ivoire, and its eastern neighbors, Togo and Benin. Plans are underway to interconnect with its northern neighbor, Burkina Faso.
Opportunities
A number of opportunities exist in generation, transmission and distribution. For an up to date list of current projects please contact the U.S. Commercial Service Ghana.
Web Resources
West Africa Power Pool
Volta River Authority
Ghana Energy Commission
Ghana Grid Company Limited
Electricity Company of Ghana
Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.