Ghana faces a real risk of stranded multi-billion oil and gas assets due to reduced funding for fossil-related projects, as the world transitions to cleaner energy sources, Minister of Energy Dr. Matthew Opoku Prempeh has said.
In a speech delivered on his behalf by his deputy Andrew Kofi Egyapa Mercer, he said the drastic reduction in western funding for fossil-related projects as well as the revision of business modules of exploration and production corporations leaning toward renewables are a few of many eminent threats to Ghana’s growing oil sector.
“There exists a real risk of stranded assets owing to Ghana’s vast unexploited oil and gas reserves,” he said in a speech read on his behalf at the maiden Africa Energy Conference in Accra.
Notwithstanding this, he declared that the country still regards its crude as a resource vital for national development and the very medium it can use to fund its way to net-zero status.
Ghana, which has been producing oil for over 10 years now, holds huge untapped reserves in the Volta basin with Keta in the east and Cape Three Points in the west, among others. These resources – which government fears could be left stranded in the global energy transition process and drive toward renewables – have potentials to transform the economy if expeditiously and effectively exploited.
Although critical, he said, the intermittent nature of renewable energy sources – as well as cost implications of technology required to effectively harness same – renders renewables incapable of satisfying base-load demands compared to fossil fuels and other conventional energy sources.
For Ghana and many other African nations, natural gas has been identified as the transition fuel of choice; a conclusion that the minister says necessitates a continuation of responsible oil and gas exploration and production.
Also noteworthy is the fact that petroleum products will remain a need for some decades in spite of the global shift away from fossil fuels.
In response to this reality and in line with Ghana’s ambition of becoming a hub for refined petroleum products in the West African sub-region and beyond by the year 2030, Dr. Opoku Prempeh said: “We have by statute launched the Petroleum Hub project”.
The hub will feature three refineries – each with a minimum production capacity of 300,000 barrels per day, five petrochemical plants, and industrial and storage infrastructure.
So far, 20,000 acres of land has been secured in the Jomoro Municipality of the Western Region of Ghana for this project.
Ghana, he declared, is therefore “open to investments in the Hub. Factors like the central location of Ghana and access to vibrant shipping routes which provide easy access to regional markets make the Hub project the very viable.
“Furthermore, Ghana has seen the need to develop a National Energy Transition Plan to guide its journey toward attaining net-zero status at a pace realistic to its peculiar circumstances.”
Ghana’s plan, Dr. Opoku Prempeh explains, is informed by both available and prospective energy sources, accessible financing and other factors.
“I am glad to hint to you that by end of this month the plan will be out-doored.”
Local production of solar batteries
Ghana discovered lithium – a key raw material for the solar and electric vehicles industries – in commercial quantities in the Volta, Western and Ashanti Regions during 2017, with Dr. Opoku Prempeh now revealing that the country is bent on exploring the prospects of using it to become a solar battery manufacturer in a value-addition drive.
“Ghana’s recent discovery of high-grade lithium is an achievement government intends to leverage on in exploring the real possibility of manufacturing solar batteries locally,” he said.
He added that the naturally occurring sunshine has also become a commodity which African countries must position themselves to fully harness.
“As we embrace the present opportunity of exploiting energy sources readily available to us, I urge African states to also plan around energy sources that will be available and accessible 20-30 years from now, and to start investing in the development of same.”
In determining which energy source to invest in, nations ought to consider the security of supply, affordability of energy source and sustainability of the energy source. Nations also ought to explore new industries or policies to diversity their economies, he said.
Energy sustainability must lead to diversification
For his part, the Chief Executive Officer of VRA, Emmanuel Antwi-Darkwa, said efforts to promote energy sustainability should result in energy diversification.
“In recent times, energy sustainability has taken on several meanings and dimensions. However, in our VRA context, energy sustainability means to us the diversification of our power generation portfolio to take advantage of available and sustainable sources of energy – especially in the renewable energy space; namely hydro, thermal, solar, nuclear and wind,” he said in a speech read on his behalf.
To achieve this, Mr. Antwi-Darkwa said VRA – the country’s largest power producer – initiated a programme that ensures a significant improvement of its operations by including serious business acumen in its power generation, delivery process and customer service.
Aside from this, he said, the state-owned company has also revolutionised the fundamental structures of its business through digitalisation, creativity and innovation, business sustainability and a work culture pivoted on the mantra of public sector delivery with a private sector mindset.
“Improving access to energy in a sustainable manner would not only lead to the development of the African continent but also ensure improved quality of educational outcomes, improved health, lower mortality rates and reduced unemployment, and a potential decrease in rural-urban migration,” he further explained.
Africa Energy Conference
The Africa Energy Conference’s maiden edition focused on highlighting the infrastructure gap, financing options and energy transition opportunities in the Africa energy sector, and was held under the theme Africa’s energy future – achieving an all-round competitiveness and sustainability to support the continent’s development ambitions.
The one-day conference is a strategic platform powered by the Business & Financial Times Limited (B&FT) and supported by GCB Bank, Sethi Brothers Ghana Limited, Bulk Oil Storage and Transportation Company Limited (BOST), Volta River Authority (VRA), Arthur Energy Partners and Nuclear Power Ghana.
It brought together experts and industry players from across Africa to proffer solutions on how governments and the private sector can access financing to bridge the sector’s infrastructure gap, achieve lower emissions and energy transition targets in line with the United Nations Sustainable Development Goals.