Exclusive Interview: Ghana’s Minister of Energy, Dr. Otenj-Adjei
As the first African country to gain independence, Ghana is emerging as a hub for sustainable development in West Africa and becoming a model to follow in the Africa’s transition to renewables.
How are you going to take Ghana from 0.01% renewable reliance to 10% by 2020?
The moment you establish these parameters such as ensuring that the total renewable capacity is 10% of the country’s total generation capacity within your policies then you have to work with the eligible companies that are supposed to have 10% of their total generation capacity come from renewable sources. The government’s Volta River Authority has started a two megawatts solar pilot project in the northern part of Ghana. The process has started and everybody is beginning to understand what it takes to get involved in the bigger program. We believe that as more Independent Power Producers (IPPs) come into the country and begin to see that this is the policy, then they will also participate in the program to ensure that 10% of their total generation capacity comes from renewable sources.
Another aspect that we want to develop is what is happening in Germany where houses have their own solar panels as part of their roofing systems. In Cuba, most hotels also have solar as part of their roofing panels. In these hotels, you cannot heat water with power from non-renewable resources, but you are required to use the solar system to heat warm water for bathing and washing. We are looking at these examples with a view to adopt those cases that can help us most. We are also looking at wind energy, as well as other sources such as small hydro, biomass and biogas. We have completed a biogas pilot project in Apollonia, but it’s hard to attract investors to take the project to a larger scale.
What are the main challenges to implementing projects?
At the beginning, many investors were talking about the need for a renewable energy law, which would offer a comprehensive understanding of the regulatory framework and fiscal incentives. We now have a Renewable Energy Act 2011 (Act 832) which has a feed-in tariff component and a provision for the establishment of a renewable energy fund. We attended this summit in Brussels to work with the European Union (EU) to see how to implement the feed-in tariff policy and to explore the support they can give us. The tariff for moving to renewable solar energy is far higher than the tariff for using conventional sources of energy. How do we pay for the implementation of the feed-in tariff policy during the transition period? We are asking the EU for their support. Until people begin to see the benefits of the renewable energy systems, they will not be prepared to pay for the full cost now, which is currently far higher than that from conventional energy sources.
The challenge then for Ghana is to raise local awareness and attract foreign investments?
People are aware that renewable energy can bring electricity to their homes. Those who can afford them have solar panels on their roofs for example, but it is the cost for the broader public that is the challenge. If you have 2,000MW generation capacity and you need 10% from renewable energy sources, then you need to get at least 200MW from renewable sources. This is a massive amount for a transition period. Who is going to support us to implement an affordable tariff for the 200MW from renewable energy sources during the first five-to-ten years of transition? The ordinary consumer of electricity cannot afford to pay and we urgently need support from EU and other development partners during the transition period if we are to succeed with this policy.
Have you had positive responses from your European candidates?
Yes. The Europeans have made many pledges but with many conditionality clauses, which to put it bluntly are often unacceptable. If you are in the Third World, you feel like they do not want to give you the money to develop. They put many constraints to ensure that you cannot access the funds they pledge to provide to support such policies. Spain has been faithful to its pledges. The Spanish government has provided funds to facilitate solar programs for police stations that are in communities which are far from the grid. There are also post stations for customs barriers that have been provided with solar energy to help the Custom Officers in the night and to listen to the radio or watch TV.
Ghana has many scattered ‘island’ communities. We have used solar power to reach out to these communities so that they have basic communication with the rest of the country by listening to the news. We are inviting more investors to come in and support such projects and other related businesses. Ghana is setting the pace in renewables and calls upon the EU to help us develop a model that can easily be transferred to other African countries. This is precisely what we have been working towards. We are the first sub-Saharan country to gain independence. Since then, we have been setting the pace for democratic practices and good governance and we intend to work assiduously to ensure that we join the pace setters in this area too.
How important are regional partnerships in sharing resources?
Excellent! We have power interconnections with the Ivory Coast. When they have a power crisis, we help supply them with energy, and vice versa. We also have interconnections with Togo and Benin. Despite our own generation deficiency problems, we have been supplying our neighbours with power and we are not tempted to cut them off because once you do that, you cripple their economy and the regional cooperation would not develop in West Africa.
Within the West African Power Pool (WAPP), Ghana has commenced the implementation of a project to construct a 330KV network to transmit electricity to Ivory Coast, Burkina Faso and Mali. We have completed the construction of the line from Tema to Aboadze in the south-west of Ghana and we will very soon begin the construction of the 330kV line from Prestea through Kumasi and Kintampo (in central Ghana) to Bolgatanga (in northern Ghana).
We are working hard to ensure that the subregion is connected with reliable electrical power. We are also working with WAPP to construct 450MW thermal power plant in Bonyere which will use our Jubilee field gas to support the regional power supply. In addition, there is the West Africa Gas Pipeline that brings gas from Nigeria to Benin, Togo, and Ghana. This project continues to experience setbacks due to the peculiar attitude from our brothers in Nigeria. Sometimes they give you more than you need while other times they just will cut you off without notice.
What is Ghana’s strongest resource in renewable energy?
We have a lot of biomass. We are looking for someone bold enough to use waste as a source of energy in Ghana. Many investors request ‘sovereign’ guarantees. Unfortunately, the International Monetary Fund (IMF) counts these guarantees as are part of the nation’s debt stock and this greatly affects the country’s ability to borrow which ultimately, impedes development. Therefore, we are not interested in giving sovereign guarantees as this compounds our problems further. We are more interested in working with the World Bank who has a new scheme which enables the Bank to act as an interface between investors and the national government. Thus, the World Bank is ready to give the guarantee required by investors who can then go ahead to sign an agreement with the government. This scheme from the Bank should help developing countries get more investments in renewables and the traditional sources of energy, such as oil and gas. Other renewable energy resource potentials include wind and small hydro.