Already today and even more in the very near future, Renewable Energies (RE) will be the only reasonable and feasible power source for both industrialized and developing countries. 

As we know today, renewables were the only source that posted a growth in demand in the first half of the year 2020, driven by larger installed capacity and priority dispatch. 

Renewables demand is expected to increase worldwide drastically because of low operating costs and preferential access to many power systems.

In the International Energy Agency’s (IEA’s) report, “World Energy Investment” published in May 2020, is a description of a drastically changed energy markets in the wake of the coronavirus 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.

The International Energy Agency’s Global Energy Review 2020 report found that renewable energy has so far been the energy source most resilient to Covid-19 lockdown measures. 

Renewable electricity has been largely unaffected while demand has fallen for other uses of renewable energy. In first quarter (Q1) 2020, global use of renewable energy in all sectors increased by about 1.5 percent relative to Q1 2019. 

Renewable electricity generation increased by almost 3 percent, mainly because of new wind and solar photovoltaic (PV) projects completed over the past year and because renewables are generally dispatched before other sources of electricity.

The resilience of renewable to the Covid-19 pandemic, combined with the falling cost of power generation from renewable energy resources, has led many to forecast a significant increase in green investment post-Covid-19, and Africa cannot miss out of this opportunity.

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).

ADVANCEMENTS IN GREEN ENERGY

The green energy sources are rapidly becoming cheaper than fossil fuel or gas powered plants. According to the International Renewable Energy Agency (IRENA), more than 56 percent of the renewable capacity added in 2019 achieved lower electricity costs than new coal plants. 

Solar photovoltaics (PV) reveals the sharpest cost decline over 2010-2019 at 82 percent, followed by concentrating solar power (CSP) at 47 percent, onshore wind at 40 percent, and offshore wind at 29 percent. Also, electricity costs from utility-scale solar PV dropped 13 percent year-on-year, reaching nearly 7 cents (US$0.068) per kilowatt-hour (kWh) in 2019. Onshore and offshore wind both fell about 9 percent year-on-year, reaching US$0.053/kWh and US$0.115/kWh, respectively, for newly commissioned projects. Of course, such prices always also depend on the country and the wind regime.

According to IRENA, 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. 

Also, a cumulative global gross domestic product (GDP) will grow by US$98 trillion.

In terms of consumption, wind and solar combined, are expanding faster than all other energy sources.

Latest U.S. Energy Information Administration (EIA) data shows that renewables, including hydro, wind and solar, provided 23 percent of U.S. electricity during the April lockdown, up from 17 percent in the same period of 2019. 

The EIA’s Electric Power Monthly report shows that clean power facilities produced more electricity through May 31 than coal and nuclear. For instance, the amount of solar energy generated from January to May, compared to the same period last year and including distributed solar, is up roughly 21 percent, with PV now accounting for 3.3 percent of the country’s total power generation. 

Solar and wind together provided 12.6 percent of U.S. electrical power generation during the first five months of the year. That mark is about 14 percent higher than the same period last year.

It is also reported by Ember an environmental group in London that renewable power has beating out fossil fuels in the European Union (EU) for the first time. The report shows that about 40 percent of the electricity consumed in the 27 EU countries came from renewable sources, compared with 34 percent from plants burning fossil fuels. 

The rise in consumption is significant and encouraging for law makers as Europe prepares to spend billions of Euros to recover from the Covid-19 crisis and set the bloc on track to neutralize the carbon footprint by the middle of the century.

Not so long ago, the energy transition was an idealistic concept driven largely by researchers and environmentalists. The most important drawback was the high cost associated with the deployment of clean technologies. 

The drastically reduced price of PVs and wind turbines for example, has ensured global attention for solar and wind energy. A similar situation is unfolding concerning emissions-free hydrogen production, so called “Green” hydrogen.

The declining cost of renewable generated electricity is making hydrogen highly marketable as a promising fuel source option for a decarbonized economy of the future.

Today, Green hydrogen is red hot. It has long been touted as a virtually inexhaustible source of clean energy with zero carbon emissions since this first element on the periodic table burns clean, leaving behind only water vapor.

Hydrogen power is not a novelty; it is already widely used in commonplace industrial processes such as ammonia production, in refineries as a feedstock for chemicals. It is also used as a fuel, an energy carrier, or an energy storage solution. 

Hydrogen is one of the enablers in the context of the Green Deal for decarbonizing sectors like chemical industry, steel industry, buildings and the transportation industry.  

The standard hydrogen used in these production processes, however is not “green” as you may think. It is created through the use of fossil fuels, primarily coal and natural gas. This form of hydrogen is known as “grey” hydrogen, and is essentially useless in terms of reducing greenhouse gas emissions.

The production of “Green” Hydrogen through a process called electrolysis whereby hydrogen is separated from oxygen in water, is gaining traction in the new Green economy. The best bit is that there are no emissions from this process, compared to the traditional way of producing hydrogen from natural gas and coal. 

Once produced through electrolysis, the hydrogen can be stored, transported and processed for a growing range of applications. Green hydrogen is a perfectly green cycle; its production can be made everywhere and can be used everywhere.

Green Hydrogen

Green hydrogen, which is produced using renewable energy, is also currently in production, but it is still cost prohibitive compared to “grey” hydrogen. But plenty of renewable energy projects have been trying to make green hydrogen competitive for years. 

Already, the price of electrolysis-produced hydrogen has decreased by 60 percent in the past 10 years from US$10-US$15/kg to approximately US$4-US$6/kg. The decreasing costs are not a coincidence as governments and companies are responding towards an urgent challenge and changing attitudes towards hydrogen.

The Green hydrogen plan is becoming commercially viable as costs decreases to compete with fossil fuels.

Currently, “grey” hydrogen can be produced for US$1.8/kg, which need to become the target price for future “Green” production. The International Energy Agency has identified two factors as main drivers for cost reductions: availability of cheap electricity and innovations in the production of electrolysers.

Currently, European companies such as Siemens and Thyssenkrupp deliver considerable number of electrolysers. Chinese companies however are not left behind, as the two countries via for hydrogen supremacy.

The question is “why should Africa wait?” Africa has a unique opportunity to become a market competitor for “Green” hydrogen, conditioned that it moves quickly forward with its decision makers. 

THE GREEN ECONOMY RACE

The Green energy race have long started. The race is about transitioning into a green economy to help reboot local economies as they emerge from Covid-19 crisis and the Russia-Ukraine War. 

Energy sourced from renewables, be it for power generation, transportation or whatever; is expected to chart the path to recovery. 

It is viewed as the most sustainable recovery strategy by countries around the world because of the immense benefits it comes from its deployment.

Records indicate that with the lowering cost of renewable energy sources, renewables have demonstrated their robustness, stability, sustainability, and cost effectiveness over this malignant Covid-19 period unlike the fossil fuels, coal and gas. 

As a result, there is a widespread, ambitious and genuine commitment to advancing comprehensive renewable energy towards achieving 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. 

Therefore, developing renewable energy is a must-have, a make-or-break commodity. Ghana and each Africa country must as a result, not sleep in this respect.

Most governments have as a result already planned and are deploying strategies to achieve sustainable energy supply. Many around the world have instituted objectives to adopt and utilize renewable energy resources to shore up their power generation and consumption, and to boost mobility. 

By the adoption of policies and pursuance of targets, countries like China, United States (USA), Germany, Norway, Denmark, 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).

THE EU “GREEN DEAL”

Europe’s most powerful supranational organization, the European Commission, has earmarked the transition as one of the most important topics for the coming years. 

The European Union (EU) “Green Deal” is one of its most ambitious plans to mobilize at least €1 trillion in public-private investment over the next decade.

Recently, the highly anticipated hydrogen strategy was unveiled, revealing how Europe’s top policymakers intend to expand the fuel’s value chain from production to transportation, storage and consumption. 

The strategy gives a good overall picture of what an emerging hydrogen economy will look like. 

It will be a much more integrated energy system; one that moves energy among the sectors of transport, industry, and buildings. 

The strategy gives the example of cars powered by solar panels on roofs, while buildings are warmed with heat from nearby factories, which is fueled by clean hydrogen produced from offshore wind energy.

Currently, 8 million tonnes per year of “grey” hydrogen are produced in the EU through steam reforming which emits a significant amount of carbon dioxide (CO2). 

In theory, these facilities can be enhanced with carbon capture and storage (CCS) technology to limit environmental damage and produce blue hydrogen as a bridging method. 

Further along the road, however, electrolysis capacity needs to be expanded to produce “Green” hydrogen, meaning only using renewables.

The EU “Green Deal” is partly dedicated to kick-starting a continental zero-emissions economy. The strategy contains a three-step plan that starts with the implementation of Green hydrogen production and consumption in industries such as steel, cement, chemicals, and refineries by 2024 through the development of large electrolysers of up to 100MW in the vicinity of existing industrial centers of demand. 

It also emphasizes the development of refueling stations of hydrogen fuel cell buses and trucks. In the meantime, planning of transmission infrastructure will continue.

In the second phase, facilities will be connected to create “Hydrogen Valleys” by 2030. Hydrogen will expand beyond the industrial base and begin to play an important role in power system flexibility and storage. 

This will be made possible with 40GW of hydrogen electrolysers installed in Europe, supplied by renewable energy, producing 10 million metric tonnes of renewable hydrogen annually. 

The long-range transport of hydrogen will need to occur and the strategy document discusses a “pan-European grid” with the existing, partially repurposed, natural gas grid and the development of large hydrogen storage facilities. 

This will link the areas with large renewable energy potential to major demand centers in the EU countries.

In the last phase, the hot spot will be joined and a large European hydrogen infrastructure created by 2050. This requires large expansion of numbers of electrolysers, upgrading of distribution networks and the building of hydrogen transmission pipeline infrastructure. 

Producing vast quantities of hydrogen will also require significant expansion of solar and wind power capacity. This phase assumes that zero-carbon hydrogen will become widespread in shipping, aviation, and other hard-to-decarbonize sectors such as commercial buildings. 

A large market for hydrogen-derived synthetic fuels will also exist.

The EU hopes to produce 1 million tonnes from 6GW of electrolysis capacity by 2024. By 2030, this should have grown towards 10 million tonnes from 40GW capacity. Germany alone is expected to contribute 5GW by 2030. 

EU’s 2030 leap to 40GW of renewable energy hydrogen electrolysers will be matched by 40GW of electrolyser capacity outside of the EU producing hydrogen for imports into the EU. Having 2 x 40GW of electrolyser capacity installed by 2030 would be more than what the Hydrogen Council has proposed for the entire world for 2030.

To help scale up production of green hydrogen in Europe, the EU has launched a Clean Hydrogen Alliance of companies, industry experts, national governments and the European Investment Bank. 

At the same time, the EU will support the development of a market for green hydrogen by creating a standard classification systems of types of hydrogen and a certification system to support its trade.

Other countries such as the Netherlands, also intend to contribute and profit from the new hydrogen economy. The Dutch are uniquely positioned with access to the North Sea for the installment of wind turbines and an existing gas network that could be reused for export purposes. 

North Africa, with its abundant renewable energy resources, are anticipated to become major suppliers in cross-border trade and export of hydrogen to Europe. 

But also other African countries can act as locations for the installation of “Green” hydrogen production facilities. This applies also to all ECOWAS States especially Ghana, Senegal, Cape Verde and Ivory Coast. 

GERMAN ENERGY TRANSITION

Germany continues to play a key role in the energy transition conversation, investing heavily in technology, education and research. Hydrogen will become a key commodity for a successful energy transition. 

This forward-looking source of energy is expected to make an important contribution to meet climate targets in Germany and across the world.

Germany has as a result set for itself a 65 percent target by 2030, requiring an increase in wind and solar generation capacity to between 215GW and 237GW, from 120GW presently. Wind, solar and other clean energy sources currently account for more than 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 German government has ensured a prominent spot for its future hydrogen economy in the economic stimulus packages intended to mitigate the financial fallout of the Covid-19 crisis. At least €9 billion will go towards stimulating the development of hydrogen-related technologies. 

Seeking to become carbon-neutral by 2050, Germany aims to have 5GW of hydrogen production by 2030 with another 5GW a decade later.

To help develop and implement the national strategy around the expansion of hydrogen production and use, the German government has also launched a National Hydrogen Council to pave the way for the country to become the world leader in the field of hydrogen technologies.

Aside Germany, certain Asian countries have taken an interest in the hydrogen long before the EU did so which reflected in their investments in hydrogen-related technologies. While financial support in the EU stands at €0.5 per capita, Japan has invested €3 and China even €4.

SUPER-MAJORS JOIN THE RANKS

Oil super-majors, the automotive industry, and other companies are joining the ranks of those who are proactively investing in hydrogen technologies.

In 2020, oil super Royal Dutch Shell got involved in the Green hydrogen initiative with an offshore wind farm in the Dutch North Sea instead of the traditional fossil fuels. 

The project is being developed by a consortium along with Gasunie and Groningen Seaports. The project aims to generate around 3GW to 4GW of wind energy for the production of hydrogen before 2030, and possibly raise the capacity to 10GW before 2040.

Russia’s gas giant Gazprom hopes to start producing Green hydrogen beginning in 2024 under a new government plan to develop a hydrogen economy. The plan sees Gazprom building and beginning to test methane-hydrogen-powered turbine, and until 2024 it will also study different applications of hydrogen as a fuel, both in things such as gas boilers and gas turbines, and as a fuel for vehicles. 

Gazprom will not be the only one involved in the hydrogen drive in Russia. Rosatom, the country’s nuclear power major, will start testing hydrogen as fuel in trains come 2024. Russia’s largest private gas company, Novetek, has also expressed interest in taking part in the hydrogen initiatives.

London-based BP, one of the world’s largest oil and gas super-majors, has left its traditional industry reeling after announcing a mammoth strategy to transition the company into an “integrated” energy company with plans to increase low-carbon investment 10-fold and build out a 50GW renewable energy generating capacity by 2030. 

The energy group plans to increase its low-carbon spending to US$5 billion a year by 2030 while shrinking oil and gas output by 40 percent compared with 2019. 

The portfolio it plans to build would include renewables, bioenergy and early positions in hydrogen and carbon capture and storage technology, with the bulk of the budget to be spent by 2025.

The shift by the super-majors 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 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 increased to 679kW in 2019 for onshore wind.

THE GREEN BANK CONCEPT

In the early 90’s, most of the banks across the world were unwilling to lend to renewable energy projects on a recourse basis due to unproven technologies, hesitant regulations, and lack of experience in renewable energy project financing on the part of the banks. 

The fact is little was known about renewable energy. So only a few project financings existed in the world and the ones that existed had a tendency to be undersized with margins and cost were rather high.

Times are changing as advancement in technology, political stability and economic improvements have provided the enabling environment for far wider market interest for project financing of renewable energy. For example, by the time the Europeans had adopted directives, banks had gained experiences lending to renewable energy projects in member states. 

Today, as expectations have exceeded by the banks, renewable energy targets have gained extensive support. Banks have become more and more secured financing the renewable energy projects, so the numbers of the banks have been quadrupled over the years and long term bankable power contracts for developers to finance the projects that have been raised. 

This augmentation also has resulted in growing the size of projects brought to the market.

To overcome investment barriers and leverage the impact of available public resources, over a dozen national and sub-national governments have created public Green Banks and Green Bank-like entities in recent years. 

A Green Bank according to the Organization for Economic Co-operation and Development (OECD) is a publicly capitalized entity established specifically to facilitate private investment into domestic low carbon, climate resilient (LCR) infrastructure and other green sectors such as water and waste management.

According to the Coalition for Green Capital (CGC), a non-profit Green Bank advisory organization, a Green Bank is fundamentally “a focused institution, created to maximize clean energy adoption.” 

Green Banks are often established to complement existing financing institutions by attracting and leveraging private capital that otherwise might be unavailable to a particular market or segment.

Green Banks help secure low-cost capital for clean energy projects at favorable rates and terms to both traditional and otherwise challenging market segments. 

The availability of low-cost financing is a critical factor for achieving cost-competitive renewable energy. Reduced interest rates, extended term lengths, and low or no money down finance offerings can help ensure that renewable energy adopters achieve energy bill savings, provide pricing certainty, and enable investors to achieve attractive investment returns.

These dedicated green investment entities have been established at the national level (Australia, Japan, Malaysia, Switzerland, United Kingdom), state level (California, Connecticut, Hawaii, New Jersey, New York and Rhode Island in the United States), county level (Montgomery County, Maryland, United States) and city level (Masdar, United Arab Emirates).

As of 2017, several Green Banks in the United States have been established by enabling legislation at the state and local level, with several more under development. Examples of existing Green Banks in the United States include the Connecticut Green Bank, and the New York Green Bank.

The Connecticut Green Bank is United States’ first green bank. The banks was established as a strategy to achieve cleaner, less expensive, and more reliable sources of energy while creating jobs and supporting local economic development. Its mission is to confront climate change and provide all of society a healthier and more prosperous future by increasing and accelerating the flow of private capital into markets that energize the green economy. 

Connecticut’s Green bank model upended the government subsidy-driven approach to clean energy by working with private-sector investors to create low-cost, long-term sustainable financing to maximize the use of public funds.

ELECTRICITY SUPPLY CHALLENGES IN AFRICA

Supply Source

The demand for electricity in Africa today is 700 terawatt-hours (TWh), with the North African economies and South Africa accounting for over 70 percent of the total. 

Yet it is the other sub-Saharan Africa countries that see the fastest growth to 2040, according to the IEA. West Africa’s inhabitants of close to 430 million consumes a little over 100 terawatt-hours of electricity per year. It is estimated that by 2030, that demand will be more than 200TW-hr, a fourfold increase from where demand was in 2015.

Just like many other parts of the world, West Africa is grappling with daunting electricity supply challenges. The region’s power sector remains largely under-developed, requiring a huge expansion in its generation capacity and power grids. According to John Timmer, a science editor with Ars Technica, large hydro facilities in West Africa produce about 20 percent of the region’s electricity now, with the remainder mostly supplied by a combination of natural gas and oil-fired generating plants.

A new study has mapped the potential for solar-wind-water strategies for West Africa. The study, Smart Renewable Electricity Portfolio in West Africa, published in the scientific journal Nature Sustainability explores how hydropower plants can support solar and wind powers unpredictable and intermittent nature in a climate friendly manner. 

The lead author of the study, Sebastian Sterl, energy and climate scientist at Vrije Universiteit Brussel and KU Leuven, proposes that countries in West Africa are represented with the opportunity to plan their electricity generation expansion in line with strategies that rely on modern, climate-friendly energy generation. 

According to Sterl, countries in Europe lack such an opportunity, with power supply in this region largely dependent on polluting power plants for many decades; a situation many countries now want to rid themselves of.

The study published by Sterl and Brecha (2020), demonstrates that it will be particularly important to create a “West African Power Pool,” a regional interconnection of national power grids. 

By that, each West African country could contribute to a shared West African Power Pool for electricity supply, based on its own nationally available resources. The study found that West African countries do already collaborate on electricity exchanges, but mostly through bilateral contracts, while plans are underway to integrate the national power systems into a unified electricity market on a larger scale.

The research suggests that cross-border electricity trade could make better use of hydropower, coupled with solar and wind. It identified countries with a tropical climate, such as Ghana and the Ivory Coast, which typically have a lot of potential for hydropower and quite high solar radiation, but only less windy sites. Drier and more desert-like countries, such as Senegal and Niger, though hardly have any opportunities for hydropower, receives more sunlight and more wind. 

The researchers found that the potential for reliable, clean power generation based on solar and wind power, supported by flexibly dispatched hydropower, increases by more than 30 percent when countries can share their potential regionally.

The research concludes that all measures taken together would allow close to 60 percent of the current electricity demand in West Africa to be met with complementary renewable sources, of which roughly half would be solar and wind power and the other half hydropower, without the need for large-scale battery or other storage plants. 

The work shows how these efforts could be streamlined with the growth of renewable electricity sources. Similar efforts according to the research are underway in other parts of the world, such as the European Union, where cross-border cooperation is also expected to become more important to scale up renewable electricity generation.

The study also finds that within a few years, the cost of solar and wind power generation in West Africa is also expected to drop to such an extent that the proposed solar-wind-water strategy will provide cheaper electricity than gas-fired power plants, which currently still account for more than half of all electricity supply in West Africa.

The World Bank estimates that integrated power trade in the region could lead to cost savings of US$5-8 billion per year by enabling countries to import cheaper sources of electricity; it will increase access to affordable, reliable and modern energy, and reduce CO2 emission intensity.

The World Bank has dedicated US$750 million in IDA funding to support the West Africa Power Pool (WAPP) and intends to further step-up its support towards achieving lower cost in the region where electricity remains among the costliest in the world, at $0.25 per kilowatt-hour, more than twice the global average.

Electricity Access

In spite of its vital role, a billion people mostly concentrated in Sub-Saharan Africa and Asia still live their daily lives without electricity, and hundreds of millions more live with unreliable or expensive power, according to the International Energy Agency (IEA). 

Meanwhile, the need for electricity is critical, because it serves as a catalyst for sustainable economic development. That it is impossible for a country to develop and sustain beyond subsistence means without having access to electricity for the greater portion of its society. 

Economic sectors such as agriculture, transportation, mining, services, and industries cannot do without electricity, as it presents itself as a vital commodity.

Of those without access to electric energy in sub-Saharan Africa, West Africa is reported by the IEA to accounts for 30 percent. Putting the average access rate across West Africa at 52 percent. Data from the World Bank has it that in 2019 only 6 countries were listed as having an access rate above 75 percent – Gabon, Mauritius, Seychelles, South Africa, Cape Verde and Ghana; while most countries had a rate below 50 percent and some had a rate of below 25 percent. 

Botswana, Cameroun, Comoros, Côte d’Ivoire, Nigeria, Eswatini, São Tomé and Príncipe Senegal were listed as having access rate between 50-75 percent.

Ghana may be counted as one of the most successful countries in the sub-region in expanding access, however it missed out of its target to achieve universal access to reliable electricity supply by 2020; an objective driven by growth in demographic requirements, increased urbanization with an ever-increasing technological demand, and the aspiration to transform into a middle-income country.

33 years after initiating the policy National Electrification Scheme (NES), there still exist a substantial deficit in electricity access in Ghana. 

The current electrification rate is about 85 percent, a bit far off the target, with no improvement in sight. Data from the Energy Commission of Ghana showed that at end 2000 electricity access rate stood at 45 percent, suggesting an average annual growth rate of approximately 2 percent. 

The next decade ending 2010 revealed that the country had achieved an access rate of 67 percent; indicating an average annual growth rate of 2.2 percent. The average annual growth rate between the next 6 years that followed (2010 and 2016) as recorded by the Energy Commission was 2.7 percent.

Electricity Access

The trajectory therefore showed an incremental annual growth in electricity access. However, over the last 3 years (between 2016 and 2019) the average annual electricity access growth rate has seen a substantial decline, from 2.7 percent to a paltry 0.6 percent. As at the end of 2019, the country had just obtained a national electricity access rate of 85 percent. 

If only the country had maintained just the annual rate of roughly 2.7 percent, electricity access rate would have been somewhere around 96 percent today; comparable to other countries outside the sub-Saharan African and Asian band.

It is evidently clear that with the current growth rate it is practically impossible to achieve universal access by end 2020. 

Deployment of renewable energy to achieve universal electricity access in Ghana is of course vital in the sense that a considerable proportion of the communities awaiting connection to the national electricity grid are currently difficult to access due to the fact that they are lakeside communities, with others planted on islands that require connection by sub-marine cables. 

For most of these communities, extension of the grid network would be challenging due to geographical and financial constraints, and off-grid and mini-grid options may be the technology of choice for meeting their electricity needs.

WHY GHANA MUST COMMIT DEEPLY TO RENEWABLE ENERGY

Putting a moratorium on new renewable Power Purchase Agreements (PPAs) until the 515MW signed PPAs by the government had been executed, is not the way to go, judging from the immense benefits that the country stands to derive from committing deeply to Green energy. 

Issues of energy overcapacity and price commitment cannot prevent the Ghanaian government from increasing renewable energy capacity, especially when RE declining costs rather helps to dilute the high prices being paid currently for thermal power, thereby increasing power export opportunities.

The country currently boosts of Utility scale installed renewable energy capacity of just 45MW. The 17MW Solar Park by the Volta River Authority (VRA), the Pwalugu multi-purpose hybrid (50MW solar and 60MW hydro) project (under construction), and the construction of the first phase of a 50MW solar PV plant to be hybridized with the 400MW Bui Power Authority (BPA) hydropower plant, is by far not enough to position the country as a renewable energy hub.

Thanks to its geographic position, Ghana has the potential to become a regional Renewable Energy Hub and increase Gross Domestic Product (GDP) and employment by means of electricity export. Current challenges in the electricity sector in Ghana (high kWh prices, fuel supply problems, decreasing level of Volta Lake, over-supply due to outdated and very expensive emergency power deals) can be adequately addressed by quickly and strongly increasing the Renewable Energy Penetration in the electricity mix.

Interest of foreign investors for Renewable Energy Projects including Green Hydrogen in Ghana is huge – supposed stable conditions and clear structures are granted. 

The interest is influenced by the fact that aside the abundant sunshine, it has good and untapped wind resources at selected locations along the country’s sea corridor.

The Swiss company NEK Umwelttechnik AG is one of such investors who has since 1998 been developing several wind farms in Ghana with the hope of supplying the national Grid, and for export purposes, based on comprehensive wind measurements over more than a decade at selected locations in Ghana.

As an example, one of NEK’s wind power development in Ghana sits, waiting for the green light from Cabinet and Parliament to proceed. 

The 225MW wind farm at Ayitepa, which was developed by the Swiss company NEK for Lekela Power, is said to have procured all required permits and authorisations in order to be implemented and constructed. But despite all these attempts to explore our untapped potential in renewable energies, the Government of Ghana (GoG) has not exuded the needed support for the project. The fully permitted project, which only requires the green light from the Cabinet and the Ghanaian Parliament, sits waiting to be constructed since 2017.

Suffice it to say that, in its budget statement presented by the Finance Minister, Ken Ofori-Atta on March 02, 2017, in clause 468, indicated that Government will facilitate the development and implementation of the Ayitepa project. The implementation of this statement is yet to be made manifest outside the books. 

The said Ayitepa project could have been ready to be built by end of 2018, if Ghana had not gone to sleep on its renewable energy commitment.

There is overwhelming literature to support that renewable energy comes at a cheaper cost compared to fossil fuel. This is perhaps why NEK together with its investors in the Ayitepa projects, the UK based company Lekela Power BV, even offered to Electricity Company of Ghana (ECG) a price of 8.9 US Cents per kWh for the sale of the wind electricity, though a competitive price could be well negotiated and arrived at. 

But be that as it may, there has been no further commitment on the part of Government towards the implementation of this project. This means that the Ghanaians and local industries would still have to pay very high prices for electricity.

While Senegal changes its old and outdated electrical generation plants to renewables, the Ghanaian Government is obviously sleeping. 

It continues to rely on old, expensive and outdated power plants, when the future requires the right energy mix anchored on renewables. The success story of Senegal should be an indicator that clean energy is possible, feasible and a viable alternative in the energy mix.

The Swiss project developer NEK has also other wind energy projects in Ghana under development, such as the 200MW Konikablo wind farm. This project is also ready for construction, awaiting few permits from government. 

Barring the lukewarm attitude of government, produced electricity from the project would have been ready to be fed unto the West Africa Power Pool (WAPP) for possible exports to surrounding countries for use, because the Ghanaian government expresses no interest in the project.

This means that aside being available for local consumption, surrounding countries stands to profit from this cheap and reliable electricity produced from Ghana. As it stands now, the Ghanaian population would have to wait even longer to get cheap and reliable electricity. 

It is therefore overdue that the Government changes its outdated, old-fashioned attitude to support only polluting, expensive and unreliable power plants.

The Swiss developer NEK currently has a total wind power pipeline of 1,000MW in Ghana, which can be constructed and connected to the grid, should the government of Ghana gives the go-ahead to this deal. Beyond this, the Ghanaian government should look to develop local capacity to meet the rising demand as the potential for solar and wind is huge.

CEASING THE OPPORTUNITY

The varied reasons for which Ghana is better placed to cease opportunities in the Green energy race. 

These may not be limited to availability of abundant renewable energy resources, improving domestic energy security through reducing dependence on fossil fuel imports, increasing concerns over the very negative environmental impact of using fossil fuels, export and job creation opportunities in the deployment of renewables.

Resource abundance: Aside the sun, the country is well endowed with more wind (onshore and offshore) and more rain to conveniently produce wind and hydropower. Ghana’s vast renewables resources can drive double-digit growth in deployment of utility-scale and distributed solar PV, and other renewables. 

The country’s existing hydroelectric facilities can easily act as virtual batteries for solar PV and wind electricity storage to manage the problem of intermittency.

Energy Security: Power plants in Ghana are mostly fueled by imported oil and natural gas. The diminishing rate of these raw materials and its cost intensive nature is causing a huge gap in the demand and supply of electrical energy. 

With the reliance on imported oil and fuels towards the generation of power, energy supply cannot be said to be sustainable, equitable and resilient in the future. 

As a result, reliable, secured, stable, sustainable and affordable energy alternate supply from renewables can be encouraged to fill the gap for the future to come.

Power Export: Ghana currently is exporting electricity to neighboring countries, like Burkina Faso, Togo and Benin, via the West Africa Power Pool (WAPP) transmission network. As the demand grows in these countries, Ghana has the opportunity to export more power at a reduced cost, and earn revenue to boost its local economy.

Growing Energy Demand: Ghana’s ever growing population means an ever-growing requirement for energy. Aside population growth, the demand for energy is growing in response to the expanding growth rate of commercial and industrial sectors together. 

The country’s trade and industrialization drive can be anchored on Green hydrogen because of it efficiency for industries such as steel, aviation, road and long-haul sea and road transport where there is no known alternative to decarbonize. 

For the glass and foundries industries that demand high-temperature heat, Green hydrogen presents a chance in the substitution of fossil fuel, because hydrogen burns cleaner, leaving only water vapor behind.

Environmental and health concerns: Climate change impacts are posing serious impacts to human health and environment. Greenhouse gases (GHG) emitted from the burning of fossil fuels are having a heavy impact on the continent’s water resources, weather patterns, human health, food security et cetera. 

Renewable energy deployments are expected to play a leading role in meeting global climate and sustainability imperatives

Job opportunities:  According to the Africa’s Development Dynamics 2018 report, by 2030, it is expected that 30 million youth will be entering the African labor market each year. In sub-Saharan Africa alone, while 18 million jobs need to be created annually to absorb new entries in the labor market, only 3 million formal jobs are currently being created. 

The International Renewable Energy Agency (IRENA) finds that 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.

Hydrogen Export: The current slump in world commodity prices must compel Africa to rethink its traditional dependence on raw material exports including oil, gas, and minerals. Africa can shift focus to the rising evolution of the use of “Green Hydrogen.” 

The European market in particular as indicated by its ambition to consume a large volume of Hydrogen, present itself as a huge opportunity for Africa.

CONCLUSION

Ghana cannot afford to be a passive participant in the energy transition conversation because of the enormous benefits it stands to derive aside the associated job opportunities, drastic reduction in electricity tariffs, decarbonisation and minimization of climate change related disasters et cetera.

Today and even more in the very near future, renewable energy (RE) will be the only reasonable and feasible power source. As we know, renewables were the only source that posted a growth in demand in the first half of the year 2020, driven by larger installed capacity and priority dispatch. 

Renewables demand is expected to increase because of low operating costs and preferential access to many power systems.

The declining cost of renewable generated electricity is making hydrogen highly marketable as a promising fuel source option for a decarbonized economy of the future. 

“Green” hydrogen has long been touted as a virtually inexhaustible source of clean energy with zero carbon emissions since this first element on the periodic table burns clean, leaving behind only water vapor. 

Hydrogen is one of the enablers in the context of the Green Deal for decarbonizing sectors like chemical industry, steel industry, buildings and the transportation industry.

Energy sourced from renewables, be it for power generation, transportation or whatever; is expected to chart the path to recovery following the Covid-19 crisis. 

It is viewed as the most sustainable recovery strategy by countries around the world because of the immense benefits it comes from its deployment. 

Records indicate that 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 fossil fuels. 

As a result, there is a widespread, ambitious and genuine commitment to advancing comprehensive renewable energy towards achieving resilient economies. 

The European Union (EU) “Green Deal” is one of its most ambitious plans to mobilize at least €1 trillion in public-private investment over the next decade. 

The strategy gives a good overall picture of what an emerging hydrogen economy will look like. It will be a much more integrated energy system; one that moves energy among the sectors of transport, industry, and buildings. 

The strategy gives the example of cars powered by solar panels on roofs, while buildings are warmed with heat from nearby factory, which is fueled by clean hydrogen produced from offshore wind energy.

The German government has ensured a prominent spot for its future hydrogen economy in the economic stimulus packages intended to mitigate the financial fallout of the Covid-19 crisis. 

At least €9 billion will go towards stimulating the development of hydrogen-related technologies. Seeking to become carbon-neutral by 2050, Germany aims to have 5GW of hydrogen production by 2030 with another 5GW a decade later.

To help develop and implement the national strategy, the German government has also launched a National Hydrogen Council to pave the way for the country to become the world leader in the field of hydrogen technologies.Aside Germany, certain Asian countries have taken an interest in the hydrogen long before the EU did so which reflected in their investments in hydrogen-related technologies. While financial support in the EU stands at €0.5 per capita, Japan has invested €3 and China even €4.

Aside sovereign states, oil super-majors such as Royal Dutch Shell, Russia gas giant Gazprom, and London-based BP, the automotive industry, and other companies are joining the ranks of those who are proactively investing in hydrogen technologies. BP for instance, has plans to increase low-carbon investment 10-fold and build out a 50GW renewable energy generating capacity by 2030. The energy group plans to increase its low-carbon spending to US$5 billion a year by 2030 while shrinking oil and gas output by 40 percent compared with 2019. The shift by the super-majors 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.

To overcome investment barriers and leverage the impact of available public resources, over a dozen national and sub-national governments have created public Green Banks and Green Bank-like entities in recent years. 

The objective is to secure low-cost capital for clean energy projects at favorable rates and terms. The availability of low-cost financing is seen as a critical factor for achieving cost-competitive renewable energy.

Increasing energy demand, improving domestic energy security, increasing concerns over the environmental impact of using fossil fuels, export of cheap power, and job creation opportunities in the deployment of renewables, are some of the reasons for which Ghana is better placed to cease opportunities in the Green energy race.

RECOMMENDATIONS

It is recommended that:

1. Ghana participate actively in the energy transition conversation because of the enormous benefits associated with the deployment of renewable energy, especially solar and wind which continue to see a decline in costs. 

The government is also to lead awareness-raising campaigns and communications strategies, improving end-user knowledge of the new opportunities and benefits of off-grid renewable energy systems.

2. Ghana must have ambitious and genuine commitment to advancing comprehensive renewable energy towards creating a “Green energy hub” in the West Africa sub-region, while working to achieving a resilient economy post Covid-19.

3. Establish a set of end-user access facilitation options, which could include targeted subsidies and deferred payment schemes that could be pre-financed directly by service providers or through a microfinance institution.

4. Establish sound business models for both stand-alone systems and mini-grids to increase the viability and sustainability of decentralized renewable energy projects, and provide access to electricity services in rural Ghana.

5. Government must get the Renewable Energy Fund (REF) up and running alongside other financing support mechanisms like group lending approaches and sustainable credit programmes for low-income operators and farmers.

6. Ghana must mobilize public-private investment over the next decade to develop a Green hydrogen economy. It must have a strategy that gives a good overall picture of what an emerging hydrogen economy will look like.

7. To help develop and implement the national Green hydrogen strategy, the government must institute National Hydrogen Authority or a Renewable Energy Authority to pave the way for the country to become the sub-regional leader in the field of hydrogen technology and production.

8. To overcome investment barriers and leverage the impact of available public resources, Governments must create a public “Green Bank” and explore the idea of offering “renewable energy bond”. It is necessary to secure low-cost capital for clean energy projects at favorable rates and terms.

9. Give the necessary approvals to Renewable Energy project of up to 1,000MW in the short term, to be constructed and connected to the grid, for purpose of local power consumption and hydrogen production, and for exports to neighboring countries where necessary.

ABOUT THE WRITER:

The author, EDMOND BIIRBIA KOMBAT ESQ, is the Co-Founder, Director of Research & Finance, IES.