Ghana’s energy sector faces mounting challenges that threaten national stability and economic progress, according to a new report by the Africa Sustainable Energy Centre (ASEC).
In a press release dated January 19, 2025, ASEC outlined critical interventions to avert a worsening crisis and secure a sustainable energy future.
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“The energy sector is at a crossroads, and swift, decisive action is essential to prevent further deterioration,” said Dr. Elvis Twumasi, Director of Research and Innovation at ASEC.
“Addressing these challenges will not only stabilise the sector but also bolster industrial production, economic growth, and job creation,” he added.
ASEC highlighted escalating debts, inefficiencies, and gas shortages as major issues, compounded by mismanagement despite initiatives like the Cash Waterfall Mechanism (CWM).
These problems have strained relationships with Independent Power Producers (IPPs) and resulted in persistent power rationing.
Recommendations for Sustainable Solutions
- Address Gas Supply Issues
- Complete Train Two of the Atuabo Gas Plant to boost capacity to 450 MMscfd.
- Finalise the Liquefied Natural Gas (LNG) facility at Tema and construct the Takoradi-to-Tema (TT) gas pipeline.
- Ensure transparency and accountability in these projects.
- Privatize ECG’s Commercial Arm
ASEC reiterated its call to privatise the Electricity Company of Ghana’s (ECG) commercial operations, citing improved revenue mobilisation and efficiency as key benefits.
“This move, guided by the Millennium Development Authority (MiDA) framework, will prevent past mistakes and enhance operational performance,” Dr. Twumasi stated.
ASEC further highlighted transparency in levy utilisation, stating the proper allocation of the $650 million generated annually by the Energy Sector Recovery Levy (ESLA).
They also suggested publishing detailed usage reports to attract investments like the $316 million Ghana Power Compact from the Millennium Challenge Corporation (MCC).
ASEC urged the government to implement cost-reflective tariffs by aligning tariffs with actual consumption patterns, and operational costs were highlighted as crucial for financial stability.
“Deregulating the electricity market and renegotiating agreements with IPPs will foster competitive and transparent operations,” ASEC recommended.
ASEC also called for the promotion of renewable energy and nuclear power, expansion of solar and wind energy projects, incentivising private sector participation, and integrating renewables into the national grid.
ASEC urged the government to move beyond political rhetoric and prioritise these measures to tackle Ghana’s energy challenges.
“Resolving these issues will not only ensure economic resilience but also solidify the government’s legacy as a transformative force in Ghana’s history,” Dr. Twumasi concluded.
