African Focus Ghana’s Energy Transition Plan: Advancing Clean Cooking Solutions by David Omata March 22, 2024 Published by David Omata In September 2023, the government of Ghana unveiled its Energy Transition Plan (ETP) to achieve zero by 2060, marking a significant stride towards sustainable development. The ETP entails a substantial capital investment, estimated at a bare minimum of USD 550 billion by 2060, representing a USD 140 billion increase compared to business-as-usual (BAU) scenarios. Over 70% of these investments are earmarked for the power and transport sectors, primarily driving a comprehensive shift towards renewable energy sources and reducing carbon emissions. This ambitious initiative is projected to catalyze new economic activities within the energy sector, potentially creating up to 400,000 net new jobs by 2060. Ghana’s ETP outlines six key decarbonization technologies under the Orderly Transition Pathway. A significant portion, approximately 40%, of the required emissions reduction is expected to be achieved through transport electrification. These technologies include electrification and renewables, which involve displacing fossil fuel consumption with electricity sourced from solar, wind, geothermal, and possibly nuclear power, complemented by energy storage solutions. Carbon capture and storage technologies will also be deployed to capture CO2 emissions from industrial processes, while low carbon hydrogen will serve as a greener alternative for industrial and transportation needs. Battery electric mobility aims to replace internal combustion engines with electric batteries across various vehicle types. The plan also emphasizes the adoption of Clean Cooking Technologies to replace traditional biomass fuels with efficient electric biomass cookers and advocates for Negative-Emission Solutions like Bioenergy with Carbon Capture and Storage (BECCS) to mitigate carbon emissions effectively. Ghana is positioned to use this orderly transition pathway to embark on a sustainable path towards a low-carbon future, fostering economic growth while mitigating environmental impact. Advancing Clean Cooking Solutions Less than a year after adopting the ETP, Ghana has taken a significant step in embracing clean cooking solutions in collaboration with international partners and stakeholders to prioritize promoting clean cooking technologies. The recent authorization of the ‘Transformative Cookstove Activity in Rural Ghana’ is a testament to the country’s commitment to advancing clean cooking solutions. Through partnerships with organizations like ACT Group, Envirofit, and the KliK Foundation, Ghana aims to distribute improved cookstoves (ICS) to rural and peri-urban households, significantly reducing smoke and toxic emissions while cutting cooking fuel costs. According to the report by ACT, a leading global provider of market-based sustainability solutions, the authorization of this cookstove activity not only contributes to mitigating greenhouse gas emissions but also aligns with Ghana’s Sustainable Development Goals (SDGs). The proposed distribution of the 180,000 Improved Cookstoves (ICS) will improve the lives of 0.75 million Ghanaian citizens and create local job opportunities; the initiative addresses environmental and socio-economic challenges. Up to 10,000 deaths annually in Ghana are associated with air quality issues; the ICS technology mitigates this by decreasing smoke and toxic emissions in individual households by as much as 80%. Additionally, it trims cooking fuel costs by approximately 60%. Ghana’s readiness to achieve its energy transition plan, particularly in the clean cooking sector, is evident through several critical factors, as discussed below: • Policy Framework: Ghana has developed a comprehensive policy framework supporting clean cooking technologies through regulations, standards, and incentives; the government is promoting modern and low-carbon cooking solutions while addressing affordability and accessibility challenges. • International Cooperation: Ghana’s collaboration with international partners, including Switzerland, demonstrates its commitment to leveraging global expertise and resources to accelerate the adoption of clean cooking solutions. Bilateral agreements, such as the one signed at COP26, provide a legal framework for implementing greenhouse gas mitigation activities and ensuring environmental integrity. • Innovation and Monitoring: Ghana is embracing innovation and technology to enhance the effectiveness of its clean cooking initiatives. Digital monitoring and verification techniques, as exemplified by Envirofit’s state-of-the-art usage and performance monitoring strategy, ensure accountability and transparency in project implementation. • Community Engagement: Ghana recognizes the importance of community engagement and awareness in driving the adoption of clean cooking technologies. The government and its partners empower households to transition to cleaner and more sustainable cooking practices through targeted outreach programs, product demonstrations, and financial incentives. Conclusion Ghana has emerged as a frontrunner among its West African counterparts by taking this huge step to implement Improved Cookstoves (ICS) as part of its Energy Transition Plan to decarbonize the cooking sector. With this strategy, the nation is undoubtedly laying the groundwork for a more promising and sustainable future by meeting its citizens’ energy requirements while reducing environmental impact. AuthorOmata David OmakojiTechnical Associate – Nextier Power March 22, 2024 0 comments 0 FacebookTwitterPinterestEmail
Power Punch The Electricity Act and Private Sector Participation by Omiesam Ibanibo September 15, 2023 Published by Omiesam Ibanibo The Electricity Act (“the Act”) enshrines the liberalisation of the electricity market to allow private sector participation. Section 1 of the Act provides a framework to guide the market’s transition to a purely contract-based competitive electricity market from the previous non-contract-based structure. This liberalisation was done to revolutionise the market’s monopolistic characteristic and disentangle the roadblocks that hinder the influx of private capital into the Nigerian Electricity Supply Chain (NESI). Private sector participation? the benefits Deregulating the market has been heralded by industry experts as the key to revamping the NESI. Private participation in the power industry has recorded numerous benefits in the Global South, including competition, innovation in electricity services and overall sector growth. An illustrative example is China. In China, its state-owned energy producer, the State Power Corporation (SPC) – before it was unbundled into several companies, controlled over seventy (70) per cent of the total generation capacity. However, after deregulating the country’s electricity sector and allowing private sector participation, SPC’s control was reduced to forty (40) per cent. This change led to increased independent power producers (IPPs), which enhanced affordable connectivity and power generation. De-monopolising electricity markets increases competition, which may drive down electricity prices. On the other hand, this begs the question of the challenges that may accompany liberalising the market and how prepared the NESI is to handle them. These potential challenges are discussed below. Private sector participation? “the unknown” Electricity generation cost is volatile in liberalised markets. This volatility is because the market forces of demand and supply determine the cost of electricity and not regulators, which is alarming for a few reasons. One, unlike the consensus that a competitive market reduces electricity prices, the United States electric industry evidenced otherwise. In 2007, the Ameren utility in the U.S. increased its electricity bills by fifty-five per cent for customers, compared to the twenty-six per cent increase noted by Commonwealth Edison customers. Thus, although studies show a link between implementing deregulation policies and electricity price reduction, most studies have shown that such reduction is short-term, noting a reversal to increased prices in the long term. Therefore, deregulation may increase utility prices for you and me, which is worrisome as production costs and other economic factors in Nigeria already diminish the average consumers’ purchasing power. Secondly, the NESI has been subject to a legacy of compounded issues, making the willingness of private participants to invest obscure. The private sector is profit-driven, and the readiness of state actors to tackle NESI’s challenges, such as inadequate infrastructure and regulatory uncertainties, is crucial to ensuring full-scale privatisation for improved reliable electricity. Thus, state governments should consider existing NERC regulations on franchising and third-party investments to guide their market designs in establishing their regulatory markets for easier integration of new market entrants. Leveraging existing regulations would prevent legal hitches and provide a clear pathway for accessing existing infrastructure, thereby enhancing market coordination and preventing abuse of market power by previous monopolistic forces. Way forward The primary purpose of deregulating the power sector is to improve market liquidity. To achieve this improvement, state regulators must resolve institutional issues that may hinder the transition to a competitive electricity market. A foreseeable challenge is a dip in profits of the companies with monopolistic powers as a result of de-monopolising the NESI, which was the case in Argentina during the global economic crisis. This profit dip may lead to friction between existing and prospective private sector entrants. Hence, deregulating the market necessitates structural transformation and synchronisation between private and state actors, with the government playing a more significant role in promoting coordination. The government must develop strategies to compensate current industry players for profitable losses while levelling the playing field for new entrants. Agreeably, liberalising the NESI promotes holistic sector growth. However, state actors must eliminate entry barriers for better implementation of their respective objectives. September 15, 2023 0 comments 0 FacebookTwitterPinterestEmail
