Economic development without electricity is impossible. There is a strong correlation between GDP and electricity consumption of a country.
If electricity supply is curtailed it will have a negative impact on economic growth. In addition to a range of other impacts, Dumsor will thus have a negative impact on the economic growth of Ghana. It is estimated that inadequate power supply makes Ghana lose an estimated 2-6% of GDP annually. This is about 1 to 3 billion US$ per year! The reasons for Dumsor are well known and well documented. In fact, the term “dumsor” has recently been used to describe persistent, irregular and unpredictable electric power outages.
SNV supports the analysis that the problem is not the power generating capacity but the capacity utilization of the installed power generating capacity. Low capacity utilization of thermal power plants are due to insufficient gas supply from foreign and domestic oil and gas fields and insufficient supply of light cycle crude oil (which could replace the gas supposed to be supplied by Nigeria) due to the low credit rating of the Electricity Company of Ghana (ECG). Low capacity utilization of the hydro dams is caused by below average rainfall over the last 3 years.
Although there is little we can do to address these causes, SNV and similar organizations are negatively impacted by Dumsor. As most of the time we need to run our generator, our electricity costs are much higher than before. In addition, we have loss of productivity, the noise, the pollution and reduced safety as lights are mostly off at night. SNV like many other organizations, companies and individuals would be happy to pay more for electricity when supply would be reliable as we know what it costs to generate our own small amount of electricity.
As SNV is one of the leading development organizations working in the Renewable Energy field, we are often asked why PV is not promoted more effectively and sincerely to solve the problem. At present, renewable electricity (excluding large hydro) only counts for 0.1% of electricity supply. This would need to be increased significantly to ensure PV has a measurable impact. To put things in perspective, consider the area of PV that would be required to replace Akosombo dam. According to the Energy Commission National Energy Statistics (2000-2012), Akosombo dam has an installed capacity of 1,020 MW and generated in 2012 6,950 GWh (77.8% capacity utilization!). To generate the same amount of electricity with PV, one would need about 2,333 hectares or 23.3 km2 PV. This would require an investment of about 6 to 9 billion dollars, which sounds exorbitant but it’s in the same order of magnitude as the annual damage to the economy of Ghana because of Dumsor. This is a large area and a large investment but not totally impossible. Those who currently pay the cost of Dumsor may be willing to pay for it in the form of higher tariffs. To be fair, one would also need to include storage of electricity as not all PV electricity is used when it is generated. This is at present the biggest bottleneck to large scale development of PV. Storage in batteries is expensive. Ghana should investigate alternative ways to store PV electricity. SNV Ghana is currently investigating the financial viability of pumped storage. Including storage will make PV much more expensive but will also significantly increase its value.
Ghana is blessed with an abundance of sunshine but taking a quick look at one confirms the solar electricity production potential for Ghana as a longer term solution to the energy crisis. Unfortunately, unsupportive regulatory environments have proven to be problematic for many countries including Ghana. Lack of incentives for the consumer (i.e. tax breaks), energy under-pricing, lack of technical capacity and a weak supply chain all contribute to the slow uptake of PV solutions in Ghana.
In Ghana, the situation has become quite serious with President Mahama threatening to remove the Minister of Power if the crisis isn’t brought under control. Next year’s presidential election is certainly adding to the pressure but it’s also highlighting the extent to which energy has become an issue of government accountability in Ghana. Solar may not offer the quick fix needed to this particular short-term problem, but over the longer term it could be the answer under-pressure politicians need to bring an end to dumsor once and for all.
In the meantime we address our Dumsor in the only way we know how. We implement energy efficiency measures by replacing our fluorescent tubes by LED and have installed a 8 kWp PV system that doubles as a carport at the SNV office in Accra (see picture). This multi-purpose structure that comprises 36 PV modules of 260W each will provide shade for our cars and generate electricity (11 MWh per year) to reduce our ECG and diesel electricity consumption. When we generate more PV-electricity than we need, and if the grid is up, we can supply the excess electricity to the grid using a new meter provided by the Energy Commission that allows net-metering. The PV system does not take us completely off the grid but helps us to reduce our electricity bill and our dependence on ECG. The pay-back period is likely more than 10 years and therefore financially not very attractive, but it does reduce the impact and inconvenience of dumsor while at the same time attracts attention, raises awareness and increases knowledge about PV.