The Institute for Energy Security has called for the lifting of the ban on renewable energy Power Purchase Agreements (PPAS).
According to the energy think tank, this will allow for the explosion of renewable energy projects and initiatives in Ghana, for purposes of de-carbonization, cost-efficient energy supply, and for economic recovery and growth, post Covid-19.
It would be recalled that the government suspended the issuance of new licenses for Wholesale Electricity supply and Permits for Utility Scale Grid on connected solar photovoltaic and wind power plants in 2017.
But the IES in a statement said the time is ripe to lift the ban.
“The reasons as put forward by government to suspend the issuance of additional PPAs raises many concerns. A mere suspension of issuance of new licenses cannot be said to be a sustainable solution, as it will not force the existing licensed companies to develop and operationalize their projects. A comprehensive review of licenses and projects on case-by-case basis is commendable, for purposes of recalling redundant licenses and issuing new licenses to companies with resources and capacity to develop projects within the shortest possible period.”
“The idea that Ghana pays over $500 million a year for unused electricity, rather makes a strong case for the ban to be lifted for renewable energy power agreements since renewables currently provides comparatively cheaper tariffs with technologies which promises to make renewable energy even cheaper going forward. The last decade has seen efficient renewable energy technologies consistently reducing the cost of renewable power. Investment into renewables in the last decade has also increased exponentially in response to the Paris Climate Accord and the United Nation (UN) sustainable development goals”, it added.
Furthermore, it said “the “green” revolution is on, with major economies and energy companies taking actions to embrace and take advantage of renewables.”
Why Lifting of Ban is Crucial
The statement said “Green energy” as it has come to be called is presently enjoying unparalleled political and business momentum around the globe, with the number of policies and projects around the world expanding rapidly.
As a result, it pointed out that Ghana must as a matter of urgency remove all hurdles, and position itself to explore fully the country’s untapped potential in renewable energy.
There are therefore five key factors that makes sense for the lifting of ban on renewable energy PPAs.
These are the need to diversify from fossil fuels as part of the global shift, to provide cost-effective and sustainable energy supply for millions of Ghanaian population, the need to meet the extended deadline of 2030 for the 10% share goal of renewable energy in the country’s energy mix and meeting government’s policy of achieving 100% electricity coverage by 2025 by filling the deficit gap via mini-grid powered by renewable energy such as solar, wind and waste-to-energy.
Others are the need for a guaranteed uninterrupted power supply for industries in view of government’s “One District, One Factory policy”, and the African Continental Free Trade Area that is forecasted to boost industrialization, exports, and gross domestic product (GDP) of local economies and the shift of global trend towards “Green” economy to address climate change concerns, and the need to prepare adequately for renewable energy investment boom in the country.
The IES said deployment of renewable energy is linked to fighting climate change, creating sustainable “green” jobs, while serving as a catalyst for the needed infrastructure development and economic growth.
Additionally, renewable energy is offering very competitive prices for electricity, particularly solar and wind, and therefore compared to the country’s thermal power plants that emits carbon dioxide and offers on average a cost of 11 cents per Kilowatt-hour, both wind and solar power can offer something below 7 cent per Kilowatt-hour.
Also, it said the excess low-priced green electricity offered to consumers can also be used to produce fuel in the form of “Green” Hydrogen, through electrolysis where a strong electrical current is passed through water to splits the molecule into its two constituent elements― oxygen and hydrogen. Hydrogen is definitely the fuel of the future, and gradually seeking to replace a significant size of current fossil fuels needs.
In that regard, the government of Ghana is therefore presented with a huge opportunity in stimulating capital spending on new infrastructure, which establishes hydrogen as one of the new energy sectors, that is expected to play a vital role in the ecological transition, and positioned to play a significant role in meeting present and future transportation and industrial needs.
Beyond lifting the ban on renewable PPAs to help deepen the deployment of renewables in the country, the IES recommended that government establishes a Renewable Energy Authority to promote and develop the renewable energy sub-sector and also develops a hydrogen policy, indicating key strategies and relevant road maps for the development of the “energy carrier” in the country.