Ghana s plans to increase Renewable Energy and what IPPs in Ghana are currently working on to improve the supply situation

Transcription

1 KEYNOTE ADDRESS BY HON. DR. KWABENA DONKOR, MINISTER FOR POWER OF THE REPUBLIC OF GHANA ON THE OCCASION OFTHE AFRICA ENERGY FORUM, FROM 8-11 TH JUNE, 2015 IN DUBAI TOPIC: Ghana s plans to increase Renewable Energy and what IPPs in Ghana are currently working on to improve the supply situation Mr.Chairman Distinguished Invited Guests Ladies and gentlemen, I am most delighted to be at this gathering today. I am also happy for the opportunity to speak on the topic: GHANA S PLANS TO INCREASE RENEWABLE ENERGY AND WHAT IPPS IN GHANA ARE CURRENTLY WORKING ON TO IMPROVE THE SUPPLY SITUATION. I appreciate the opportunity a platform such as this Conference offers policy makers, practitioners, captains of industry and participants the opportunity to update ourselves of different perspectives and ways of delivering energy solutions for the socio-economic development of our dear countries in commercially viable ways. That electricity in the Twenty First Century plays a vital role in the socioeconomic development of any country is an understatement. Electricity is a pre requisite for industrialization, provision of goods and services, transportation, domestic and other social interventions. Indeed for developing communities, to have electricity is to engage with the broader world. Ghana is no exception in advancing towards these economic reliefs. Ghana s electricity demand has been increasing exponentially since 1990 after the launch of the national electrification scheme whose goal is to achieve universal access to electricity by Historical records indicate that in the year 1967 after the completion of the Akosombo Hydropower Dam, our peak 1

2 demand was just under 100MW whilst available generation was approximately 600MW. As we speak today, Ghana s total demand including export has far exceeded available power generation capacity. Even though current suppressed peak demand is about 2,400MW as against a total installed generation capacity of 2,845.5MW, only 1,600MW of this capacity is available at peak and 1,400 MW at off-peak leaving a deficit of about 800MW in generation capacity at peak. Today Ghana is forced to shed load mainly due to the non-availability of some generating units as a result of faults, fuel supply challenges especially from the source of the West African Gas Pipeline amongst others. This situation is further compounded by the poor rainfall in the Volta catchment area for the past two years.the absence of any meaningful inbuilt redundancy in the management of the power system further exacerbates the difficulty. Power outages have significantly affected and slowed the pace of socio-economic growth in the country. Distinguished ladies and gentlemen, The Ministry of Power is committed to addressing this short term supply disequilibrium without losing focus of the country s goal of achieving universal access to sustainable and reliable electricity and become a major exporter of power in the medium to long term. To this end, the Ministry is working on different Emergency Power arrangements to beef up the supply situation. These arrangements will eventually add about 1,000MW by the end of the current year and ultimately provide the platform to pursue the medium to long term solutions. Whilst the above is ongoing, Mr. Chairman, the Ministry is taking steps to add in excess of 5,000MW generating capacity based on natural gas, clean coal and renewable energy sources within the next five years. Distinguished guests, the policy of the Government is to encourage private sector investments in these power plants as Independent Power Producers (IPP). Consequently the power sector is being restructured to create the enabling environment and a levelling playing field for enhanced private sector 2

3 participation. The enabling legislative and regulatory frameworks for private sector participation in the electricity market are in place. Transmission system operating regulations and codes such as the National Electricity Grid Code and licensing framework are also in place and so far five additional IPPs are at various stages of developing their power plants. Government is currently restructuring the two state owned distribution utilities namely, the Electricity Company of Ghana Ltd (ECG) and the Northern Electricity Company Ltd (Nedco) to better deliver effective customer service to consumers and to strengthen their financials to be better off-takers of Power Purchase Agreements. ECG in particular is to undergo structural transformation to move it from a traditional laid back public utility to a modern proactive utility that is at the sharp end of its business. The main power generation utility, the Volta River Authority is also being fundamentally altered to respond quicker to the changing electricity landscape. Government has announced its intention to create two separate entities from the VRA of today. A new publicly owned entity would be carved out of the existing VRA to concentrate on thermal generation in partnership with the private sector actors while the rump of the existing VRA concentrates on hydro generation in which it is a world leader. The existing Bui dam and any other such dams in future would be absorbed by VRA to further consolidate its position as a world class hydro operator. Ladies and gentlemen, the Government of Ghana is well aware of the important role renewable energy can play in accelerating and catalysing the country s socio-economic development and the achievement of universal access ahead of the target date of the UN Sustainable Energy for All Initiative. It is for this reason that Ghana enacted a Renewable Energy Act (Act832) that provides the legal basis as well as the necessary fiscal and regulatory framework for the development, management and utilization of renewable energy. 3

4 Renewable Energy is a sustainable option to ensure access to electricity services in both grid connected and off-grid communities that are not likely to be connected to the national electricity grid network in the foreseeable future. It also has the potential to augment the nation s generation capacity and once we have adequate Reserve Margin, intermittent renewable technologies like solar and wind can help to stabilize the power situation. This is why Mr. Chairman, my Ministry is committed to add on substantial generation capacity to create the Reserve Margin required to efficiently and effectively run a robust and resilient power supply system capable of meeting our increasing demand. This will also support the integration of variable renewable energy sources including tidal, biomass, solar and wind power plants. With adequate Reserve Margin, variation in energy outputs from these renewable sources as well as planned and unplanned shut down of power plants will not result in any deficit in generation. The national interconnected transmission network is also being upgraded with the Grid Company of Ghana Ltd (Gridco) investing massively in new 330, 225 and 161kv lines. A number of bulk supply points and substations are being added to the network to improve reliability and robustness. There are further investment opportunities in network upgrades in partnership with Gridco whose Chief Executive Officer is with me here today. Ladies and gentlemen, I am encouraged to see the overwhelming interest to invest in utility scale solar PV and wind power in Ghana. However in order to maintain the integrity of the national grid, the total nation-wide capacity for Solar and Wind Power Plants without grid stability/storage have been cap to 150MW and 300MW respectively in the short term. Let me emphasize that these are only interim measures and would be reviewed from time to time as the grid network is upgraded. Already indications are that the grid is capable handling additional solar generation. There are however no such capacity limits on biomass, waste to energy, tidal and small and mini hydro power plants. 4

5 Besides investment in utility scale solar farms, there is huge opportunity in roof-top distributed solar PV generation systems particularly for public and commercial buildings with high electricity consumption during the day. Under this scheme, renewable energy system owners would be credited for electricity supplied to the grid through net metering arrangement. A total of 200,000 units with a capacity of 200MW is expected to be deployed by the year 2020 through the private sector participation facilitated by the State. I will like to encourage the business community to consider investment under this option. Another area of high priority in the field of solar deployment is for decentralized electrification in the remote off-grid locations. Ghana still has over 2,000 communities along the Volta lake with each having population above 500 that are not likely to be connected to the national electricity grid due to the extremely high costs. My Ministry is therefore pursuing aggressive programmes to electrify these communities using renewable energy technologies such as hybrid mini-grid and stand-alone systems where applicable. Mr. Chairman, in our bid to reduce the dependency on kerosene for lighting for remote off-grid communities, the Government has since February 2013 procured solar lanterns to replace kerosene lanterns in these communities through subsidy schemes. The target is to set up an assembling plant to deploy 2,000,000 solar lanterns by Ladies and gentlemen, in the field of wind power, the Government has installed up to thirteen wind measuring masks at 60m and 80m height at various locations to collect bankable Wind data for prospective developers intending to invest in wind power plant development. Efforts towards the development of the first 100MW wind park at Ayetepa along the coast of Ghana are far advanced. 5

6 Mr. Chairman, even though Ghana has exploited most of its large hydro power potential, prospects exist for the development of 16 potential medium hydro power plant ranging from 10MW to 90MW. Feasibility studies for the development of two of the potential sites (Juale and Pwalugu) are currently underway. A feasibility study for the third site (Heman) is awaiting financial closure for construction to commence. We welcome investments in this sector and can be assured of government support. On the biomass front Mr. Chairman, the government is committed to support the generation of electricity from biomass including waste to energy. The African Plantations Systems Limited Project (an IPP) currently has thousands of hectares of eucalyptus trees under plantation to provide fuel to generate 120 megawatts of power. The government will support more of such initiatives as these provide employment opportunities for our farmers and technicians. Ladies and gentlemen, I am happy to inform you that the first tidal wave power plant in Africa with a capacity of 40 MW is currently under construction in Ghana by an Independent Power Producer in Ada on the east coast of the meridian. The pilot phase of 600KW is expected to be completed by September Mr. Chairman, as a further proof of my Ministry s commitment to the renewable energy sector, the first Ghana Renewable Energy Fair, under the theme Renewable Energy Technologies for Sustainable Development will take place in November this year. The objective of the Fair is to provide a platform for Government, the private sector, industry, Civil Society Organisations, and the general public to acquaint themselves with some of the latest renewable energy technologies available all over the world and share ideas with stakeholders from across the globe. It will also provide a platform to deliberate on issues on the effective and rapid development, management, sustainability and utilization of renewable energy in Ghana. Companies in the 6

7 renewable market are welcomed to take advantage of this fair to showcase your products. Mr Chairman, distinguished audience, let me conclude by saying that the Ministry of Power is encouraging IPPs to invest in both conventional and nonconventional forms of generation in the power sector notably new gas-fired plants, biomass fuelled plants, solar and wind farms, hydro and tidal powered generation as well as clean Coal fuelled generation. The Government of Ghana is also conscious of the need to address the trilemma of energy management, that is, Availability of supply; Affordability of Supply and Security of Supply and will not relent in this effort. We are also poised to be the export hub of power to the West African Sub Region. Mr. Chairman, let me assure you that the Government of Ghana will continue to improve the environment in order to make the country an enviable investment destination and will work hand in hand with the private sector to ensure that reliable power is supplied sustainably for the development of the country while we stay committed to our international conservation and environmental obligations. Thank you and May God bless us all. 7