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Home > Journal > Advance publication

Ghana's Changing Electricity Supply Mix and Tariff Pricing Regime: Implications for the Energy Trilemma

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T. Acheampong
T. Acheampong
B.O. Menyeh
B.O. Menyeh
D.E. Agbevivi
D.E. Agbevivi

Published 9 April 2021

Abstract

This article reviews recent developments in Ghana's electricity market, examining regulatory structures, consumption trends and tariff pricing. It further assesses the implications of the country's changing generation mix from hydroelectric to thermal power production on the energy trilemma: that is, energy security, energy equity, and environmental sustainability. Our findings show that thermal generation will continue to form the backbone of Ghana's electricity mix over the next ten years (2021-2030), driven by recent increments in thermal supply. This success in generation security, evidenced by excess grid capacity, has been by virtue of government's strong policy focus since 2015 on meeting current and future demand. Nonetheless, our analysis shows energy security in the Ghanaian context is often viewed as being about power generation and not one that encompasses the entire value chain. So, although there is excess grid capacity, there is lack of investment in distribution infrastructure, evidenced by the persistent 25% losses of all power purchased compared to a Sub-Saharan African average of 12%. This increases susceptibility to persistent power outages, which is a major energy security issue that needs addressing. Furthermore, despite the considerable 85% improvement in access in terms of grid connection, the electricity tariff structure masks inefficiencies in the distribution system by offloading the price burden on to some consumer categories while also creating unintended consequences of unpaid bills and electricity theft. Finally, at a sub-regional level, a comparison of electricity tariffs with some neighbouring West African countries shows that the cost of power in Ghana remains relatively expensive, especially for industry. This can negatively impact the country's competitiveness given that cheaper power is a critical determinant in attracting both domestic capital and FDI inflows and meeting SDG Goals 7 and 13, especially modern energy services. 

This paper will be part of the OGEL Special Issue on "Review of the Energy Sector in Ghana". More information here www.ogel.org/news.asp?key=647

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Suggested Citation

T. Acheampong; B.O. Menyeh; D.E. Agbevivi (2021, forthcoming) "Ghana's Changing Electricity Supply Mix and Tariff Pricing Regime: Implications for the Energy Trilemma"
(OGEL, ISSN 1875-418X) April 2021, www.ogel.org

"Advance publication" is the name given to material that is published ahead of its appearance in a regular structured issue of our Journal. It is also possible to monitor this via RSS. Subscribers will receive update alerts via e-mail of the published articles as soon as they have been added to the website.

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