The adoption of renewable energy and energy efficiency could help local producers to considerably cut down cost of production and improve their competitiveness, the Association of Ghana Industries (AGI), has said.
In 2020, the AGI ranked the cost of energy among the top two concerns of local producers but its Chief Executive Officer, Seth Twum Akwaboah, said businesses, including large-scale industries, could make significant savings on energy consumption by embracing renewables and practicing energy efficiency.
He said globally, the cost of power/electricity from renewable resources is becoming cheaper than conventional energy, and more importantly, suitable for commercial and industrial use. “For us as an industrial association, our greatest concern is how to help our members improve their efficiency and become more competitive and we believe that some of the ways to do so is to adopt renewables and practice energy efficiency.
If we are not competitive, our local market will be lost and we won’t be able take advantage of the AfCFTA, so renewable energy, we believe if it is efficiently adopted and effectively used, will help make industry competitive,” he said.
Mr. Akwaboah spoke in Accra during a training event organised by AGI Energy Service Centre for senior executives of selected companies, as part of efforts to promote the adoption of renewable energy, as well as efficient use of energy by industry, as a way to improve competitiveness.
Unlike in the past when renewable energy was only seen as an alternative for small-scale users, he explained that commercial or industrial use is now becoming more prominent, owing to not only advancement in renewable technologies but its relatively low long-term cost compared to conventional sources of energy.
“By and large, renewable energy technologies are growing and improving, so the size of panels you need to have in the case of solar, has reduced significantly. The investment you need to make has also gone down.”
Apart from contributing to reducing greenhouse gas emissions, a major global crisis, renewable energy sources, combined with efficient use of conventional energy, has the potential to help businesses save over 25 percent of their energy cost, according to International Renewable Energy Agency (IRENA), which adds that the cost-competitiveness of renewable power generation has now reached historic levels.
Currently, unsubsidised utility scale solar and wind power plants are able to generate electricity between 3.6 and 4.4 cents per kilowatt-hour (¢/kWh) and 2.8 and 5.4 cents per Kwh respectively, far cheaper than nuclear which is between 11.8 and 19.2 ¢/kWh and other non-renewable resources, says Lazard, a multinational advisory firm.
Similarly, biomass for power, hydropower and geothermal can all now provide electricity competitively compared to fossil fuel-fired power generation where good resources and cost structures exist, adds IRENA.
Despite the benefits, market structures, a lack of understanding of emerging renewable technologies, difficulty in accessing finance, high financing costs, inadequate regulatory frameworks, lack of remuneration for offsetting fossil fuel externalities (carbon and local air pollutant emissions), small markets and policy uncertainty continue to hinder the deployment of renewables in the country and the world at large.
Since its official launch in September 2019, the AGI Energy Service Centre has been working to promote the adoption of renewable energy and energy efficiency among the productive sector in Ghana. The Centre has organised a number of sensitization and training programmes throughout the country for commercial and industrial electricity consumers and also for renewable energy service providers.
The AGI Energy Service Centre, a component of the bilateral project between Germany and Ghana known as ‘Market Entry into Renewable Energy and Energy Efficiency for the Productive Sector in Ghana’, is implemented by GIZ and Ministry of Energy and the Energy Commission.
It supports businesses in their renewable energy and energy efficiency projects. It serves as a hub for information, project assistance and market linkages relating to renewable energy and energy efficiency project development in Ghana.
Jan-Henrik Baur, a consultant at the Centre, said it was important the country quicken efforts to increase the adoption of renewables. This, combined with efficient use of conventional energy sources, he explained will help safeguard the future energy needs of industry and the country as a whole, in a more sustainable and environmentally friendly manner.