Power sector in 2030
Ghana’s power sector is dominated by fossil fuels and hydropower. Ghana’s national development planning commission reported that in 2020, fossil fuels (crude oil and natural gas) accounted for 69% of total power generation, followed by 29.9% from hydropower. Other sources of renewable energy accounted for only 1.1% of total power generation.
1.5°C compatible pathways indicate that the country will need to rapidly and extensively reduce its reliance on natural gas and oil to a maximum of 8% of the power mix by 2030. Gas would need to be fully phased out of the power mix by 2035 at the latest, while fossil fuels should be fully phased out by 2040. Similarly, carbon intensity would need to drop from 340 gCO₂/kWh in 2019 to a maximum of 40 gCO₂/kWh by 2030. The decarbonisation of the power sector will be driven by a rapid ramp-up of renewable energy with shares rising to 92-99% by 2030, and 100% by 2040.
This stands in contrast with the country’s current goals of expanding natural gas capacities. In its updated National Medium-Term Development Policy Framework, Ghana explicitly seeks to promote the exploration of petroleum, and leverage the oil and gas industry for national economic development. This institutionalisation of fossil fuel resources into national policy planning frameworks and goals will most likely hinder Ghana’s power sector from being aligned with 1.5°C pathways in a timely manner. The intention to develop natural gas and oil capacities creates the risk of investing in and developing costly stranded assets, given that fossil fuels will need to be phased out in the following decade.
Towards a fully decarbonised power sector
The carbon intensity of Ghana’s power sector would need to decline from 340 gCO₂/kWh in 2019 to zero by 2035 to be 1.5°C compatible. This will be driven by the phase out of natural gas and oil from the power mix no later than 2035, with renewable energy contributing 100% of the national power mix by 2040.
The decarbonisation of power will almost exclusively be driven by the uptake of renewable energy, with utility-scale solar, wind and waste-to-energy plants, alongside solar PV and small/medium hydro plants offering the greatest avenues for renewable upscaling.
However, Ghana’s intentions to considerably increase fossil fuel production and the share of natural gas in the power share risks locking in a carbon intensive pathway and creating stranded assets., This is illustrated by the recent USD 13.2 billion investment in the Jubilee, TEN and Sankofa gas fields alongside consideration of developing its first coal power plants., In 2020, crude oil production reached 230,504 barrels per day, while natural gas production increased by 30.5% compared to 2019.