The energy sector is the lifeline in the development of any nation. This belief informed the decision to undertake the construction of the first hydroelectric (Akosombo) dam in 1965, which continues to be an important investment in Ghana’s economic history. Over the years with the increased demand by power users for greater security and reliability other sources of power – thermal, solar and lately windmills, as well as imports – have been added to the generation mix. The thrust of Government policy in the energy sector and Ghana’s oil find in commercial quantities is to push for a significant increase in its energy resources to become a net exporter of both power and fuel within the next five years. The production of Ghana’s oil started in the year 2010.
The Ministry of Energy has the responsibility for developing and implementing energy sector policy in Ghana. As part of its oversight responsibility, the Ministry also operates the nation’s strategic reserve of petroleum products through the publicly owned Bulk Oil Storage and Transportation Company (BOST).
The sector is composed of two main sectors, namely petroleum and power. The Petroleum sector is made up of two sub-sectors – the downstream activities (i.e. finished products production, distribution) and upstream activities (i.e. exploration, development, production of oil and gas).
In the downstream segment, the Tema Oil Refinery, which operates Ghana’s only petroleum refinery with a processing capacity of about 45,000 barrels of crude oil per stream day, produces gasoline, kerosene, diesel oil, pre-mix fuel, aviation fuel and liquefied petroleum gas (LPG), among others. Tema Lube Oil Company produces assorted lubricants and special oils on behalf of the 17 licensed Oil Marketing Companies (OMCs).
In the upstream sub-sector, the Ghana National Petroleum Corporation (GNPC) is the key institution that is collaborating with private investors to prospect for crude oil and gas within Ghana’s territorial boundaries.
The Power sub-sector is run by three utilities: the Volta River Authority(VRA), Ghana Grid Company Limited and Electricity Company of Ghana Limited (ECG). The total installed generating capacity of electric power in Ghana in 2011 was 2,169.50MW. The 2,168MW comprises 1,180MW of hydro generation (Akosombo and Kpong stations), 330MW from Takoradi Power Company (TAPCO), 220MW from Takoradi International Company (TICO), 200MW from SunonAsogli, 80MW diesel plant from Tema and 110 and 49.5 from Tema Thermal 1 Power Plant and Tema Thermal 2 Power Plant respectively. (Source: Energy Outlook For 2012, Energy Commission). In October, 2012 CENIT Power Plant commences commercial operation adding a further 126 MW to the installed capacity.
However, since the beginning of the year 2013, the SunonAsogli plant has shut down production because the unavailability of natural gas supply from the West Africa Gas Pipeline Company because of damages of transmitting pipes thereby disrupting the hitherto uninterrupted energy supply in Ghana. The Government of Ghana officially took over the 132 MW Takoradi Thermal 3 Power Plant in Ghana on Tuesday April 2, 2013 which is expected to significantly cushion the loss from SunonAsogli.
Augmenting Power Production
Currently, Ghana is expecting additional energy production from the following sources by 2015:
- Osagyefo Barge – 125 MW
- Recommencement and construction of Kpone Thermal Power Plant – 220 MW
- Bui Dam (hydro) – 400 MW
- Expansion of of T2 Thermal Plant – 110 MW
- Cenpower Generation Company Ltd – 340 MW
The Ministry also has oversight responsibility over the Energy commission, which is a sector institution responsible for regulating, developing and managing the utilization of energy resources such as electricity, natural gas and petroleum products. The commission is also responsible, in particular, for preparing indicative plans for the development of the energy sector, licensing of public utilities for transmission, wholesale supply, distribution and sale of electricity and natural gas and enforcing performance standards of the utilities.
The Public Utilities Regulatory Commission (PURC) is a statutorily independent body responsible for regulating and the overseeing provision of electrical and water utility services to consumers. Its functions include protecting the interests of providers and consumers, approval of rate, monitoring performance, standards and promoting competition among service providers.