Ghana energy transition plan faces roadblocks: experts
The West African nation has unveiled a $550 billion decarbonization plan aiming for net zero by 2060, but experts said Ghana’s energy transition faces a number of potential hurdles.
Ghana has unveiled an energy transition and investment plan worth $550 billion, but it faces significant challenges like integrating renewable energy sources, raising public awareness, and attracting sufficient funding, experts told Gas Outlook.
The recent National Energy Transition Framework (NETF) paved the way for more specific and practical strategies within Ghana’s Energy Transition and Investment Plan. NETF previously set a target of net zero by 2070, but this new plan shows Ghana has become more ambitious and is targeting net zero by 2060.
Sustainable Energy for All (SEforAll) worked with the Ghanaian government to create a plan that provides a credible pathway forward to help Ghana achieve net zero energy-related carbon emissions by 2060 through deploying low-carbon solutions across key economic sectors, such as oil and gas, transportation, and power.
According to the plan, to achieve net zero, Ghana will focus on deploying six main decarbonizing technologies that would cover over 90% of the targeted reduction by 2060: electrification and renewables, carbon capture and storage, low-carbon hydrogen, battery electric vehicle technologies, clean cooking technologies, and negative-emissions solutions.
Ghana aims to use the plan as a vital tool for engaging the international community and investors in supporting the country’s energy transition and sustainable development goals. If the plan is achieved in full, it would generate nearly 400,000 jobs in the Ghanaian economy.
“Without further action, Ghana’s emissions could rise from 28 Mt CO2e in 2021 to over 140 Mt in 2050. Under Business As Usual (BAU), the bulk of emissions growth will come from transport, driven by population growth, GDP per capita growth, and vehicle ownership,” the government’s energy transition and investment plan said.
Nana Akufo-Addo, the President of Ghana said, “This pioneering Energy Transition and Investment Plan maps out Ghana’s journey to achieve net-zero emissions by 2060 based on the latest data and evidence, ensuring that as our economy thrives, it does so in harmony with the environment.
“This plan is a testament to our dedication to fostering green industries, nurturing the evolution of cutting-edge low-carbon technologies, and propelling our nation towards a sustainable industrial revolution while giving equal growth opportunities to men and women,” he said in a statement.
However, experts have noted that the feasibility of the plan’s financial projections depends on various factors, including the country’s economic stability, fiscal policies, access to funding sources, investment climate, and the ability to attract both domestic and foreign investments.
Ambitious energy transition plan
Joshua Narh, Executive Chairman of the Energy Chamber of Ghana, told Gas Outlook that by examining specific targets, a detailed roadmap, financial commitments, the technological focus, and regulatory and policy support, it’s evident that the new plan is more ambitious than the previous energy transition framework.
“Ambition in the plan is reflected in its clear and comprehensive strategy for achieving significant carbon emissions reduction and transitioning to cleaner energy sources. Specific, aggressive targets, clear timelines, and a roadmap for net-zero emissions make it more ambitious than a less detailed framework. Allocating substantial financial resources and promoting government-private sector collaboration further underline its ambition.”
He believes implementing the new plan has the potential to bring Ghana’s energy sector carbon emissions to net zero through a series of strategies and initiatives. He said it could be achieved through renewable energy expansion, energy efficiency improvements, hydrogen utilization, electric mobility promotion, enhanced energy storage, greater attraction of investment and a clearer regulatory framework.
“The plan serves as a foundation for developing energy-focused goals and integrating them into future policy and regulatory frameworks. Clear regulations can support the transition to clean energy and drive carbon reductions. Regular monitoring and accountability measures can ensure that the goals outlined in the plan are met and that emissions are reduced consistently over time.”
Michael Mfum, a Ghana-based energy transition expert, said implementing Ghana’s energy transition plan can significantly contribute to increasing the share of renewable energy sources, improving energy efficiency across all sectors, extending electricity access to rural areas and promote clean cooking solutions and shifting from fossil fuel-powered vehicles to electric vehicles.
Challenges to decarbonization
Nevertheless Mfum said achieving a net zero carbon-level commitment by 2060 is a significant challenge for any country, including Ghana. He said several hurdles need to be addressed to transition the economy and energy sector while mitigating carbon emissions effectively.
“Integrating intermittent renewable sources like solar and wind into the grid necessitates efficient energy storage solutions to ensure a stable energy supply. The existing energy grid might require substantial upgrades to accommodate increased renewable energy capacity and improve transmission and distribution efficiency.
“Raising public awareness about the importance of transitioning to a low-carbon economy and garnering public support for renewable energy projects. Maintaining political will and cross-party support for long-term policies that encourage the transition to renewable energy despite potential challenges.”
Mfum, a youth delegate for the International Renewable Energy Association, said addressing these challenges requires a coordinated effort from the government, private sector, civil society, and international partners. “Continuous research, innovation, and adaptive policies are essential to overcoming these hurdles and meeting Ghana’s net-zero carbon commitment by 2060.”
Narh, from Ghana’s energy chamber, said meeting a net zero carbon commitment by 2060 for Ghana is a significant challenge that faces various obstacles. He said, “The transition to net zero emissions will require substantial investments in renewable energy infrastructure, energy efficiency projects, and technology adoption. Ensuring access to the necessary funding and attracting private sector investments can be challenging.”
He went on: “upgrading and expanding the energy infrastructure to accommodate renewable energy sources and electric mobility is a complex and costly endeavour. Building the necessary infrastructure can be hindered by technical, financial, and logistical challenges.
“The integration of intermittent renewable energy sources like wind and solar requires effective energy storage solutions. Developing and implementing large-scale energy storage systems is a technical and logistical challenge.”
Ghana’s economic decline
Narh noted that Ghana is facing economic decline; as such the country might encounter challenges in raising the necessary funds for a $550 billion plan. In this case, he said the government would need to assess its capacity to attract investments and consider how it plans to address the economic challenges while pursuing ambitious energy transition goals.
“It’s crucial for such a plan to undergo careful scrutiny, including an assessment of its economic impact, sustainability, and the ability to secure the required investments. The government may need to consider a phased approach or partnerships with international organizations and private investors to ensure that the financial projections are realistic and achievable.”
Mfum said Ghana’s economic decline will pose challenges to implementing large-scale projects, especially those requiring significant financial investments. He said economic downturns can lead to budget constraints, reduced government spending, and limited access to credit, which might impact the funding available for energy transition initiatives.
“In such a situation, the government of Ghana needs to prioritize projects, seek innovative financing solutions, collaborate with international partners and financial institutions, and create policies that attract private investments.
Additionally, demonstrating a clear and stable regulatory environment, ensuring transparency, and building investor confidence are crucial steps to attract the necessary funding for energy transition projects,” he said.