USAID/ARE/ECREEE/ERERA/NARUC Integrating Clean Energy Regulation into

Evolving Energy Markets

The Ghana Renewable Energy Act 2011: Technical Regulation

JULIUS NKANSAH-NYARKO

ENERGY COMMISSION

Hotel Oásis Praiamar

May 21-23, 2013

Presentation Outline

• Brief description of Ghana • Overview of Ghana’s Energy Situation • Renewable Energy Resources • National Renewable Energy Policy

Target • Regulatory Framework • Current development • Conclusion

BRIEF OF DESCRIPTION OF GHANA

• Location Latitudes 4o 44’N and 11o11’N and Longitude 3o 15W and 1o 2’E.

• Area (Land: Water)

238,539 km2 (235264 km2: 3,275 km2)

• Climate (Average Temperature: Average Rainfall) Tropical with 2 major seasons dry and wet (30oC: 807mm)

• Population (2010): 24,658,823. Growth rate (2010): 1.9%.

• Type of Government: Democracy • Economy

– Real GDP (2012): $30.09 billion. – Real GDP growth rate (2012): 7.9%. – Inflation (March 2013): 10.4%

OVERVIEW OF GHANA’S ENERGY SITUATION

• Electricity Access (Sept 2012) 74% • Electricity Installed capacity (2011) 2,170MW • Electricity generation (2011) 11,200GWh • Crude oil production (2011 av.) 80,000b/day

• Energy Resources:

– Solar energy 4.5-6.0kWh/m2/day – Wind energy (along coast) 5.0 m/s at 12 metres height – Hydro 2,500MW (1,580 exploited) – Bui hydro power 400MW (Under construction)

Solar Resource

Wind Resource

• Atiteti (Dzita), Volta Region

Hydro Resource

BIOENERGY RESOURCES

Total Wood supply for fuel 30.7 million tonnes/annum Woodfuel supply 8 million tonnes /annum Municipal waste 2 million tonnes/annum; Wood residue 2 million tonnes/annum

Animal waste 11 million tonnes/annum. Entire land cover has potential for energy crop / biofuel cultivation.

REGULATORY FRAMEWORK

Renewable Energy Act, 2011 (Act 832)

• To stimulate massive investment into the renewable energy sector.

SOME PROVISIONS OF THE RE ACT

• The FIT consists of: • FIT rate • Renewable energy purchase obligation • Connection to the distribution and

transmission systems

• Renewable Energy Fund

• Biofuel promotion

RENEWABLE ENERGY PURCHASE OBLIGATION

• 3 Power Distribution Utilities

– ECG and NEDCO – state owned companies – Enclave Power – private company

• 30 Bulk Electricity Customers

• In specifying the percentage level of electricity

the Public Utilities Regulatory Commission (PURC) shall take into account the:

• technology being used to generate electricity from the RE source.

• net effect of the cost of renewable energy on the end user tariff.

RENEWABLE ENERGY PURCHASE OBLIGATION - PENALTY

• An electricity distribution utility or a bulk customer that fails to purchase electricity for RE source shall pay a premium.

• Where an obligated entity fails to pay the

premium:

– the permit obtained by the bulk customer to purchase electricity from a wholesale supplier shall be suspended.

– A fine of 5,000 penalty units shall be imposed

on the bulk customer.

CONNECTION TO TRANSMISSION AND DISTRIBUTION SYSTEMS

• An operator of a transmission or distribution system shall connect a generator of electricity from RE sources within the coverage area of the transmission or distribution system where a generator of electricity from RE source so requests.

• An operator of a transmission or distribution system shall: – upgrade the transmission or distribution system at

reasonable economic expense to feed in electricity from the RE source.

– upgrade the system as soon as practicable if so

requested by a generator interested in feeding- in electricity from the RE source.

CONNECTION TO TRANSMISSION AND DISTRIBUTION SYSTEMS

• The cost associated with connecting installations to the metering point of the grid shall be borne by the generator of electricity from RE sources.

• An operator of a transmission or distribution

system shall enter into a connection agreement with a generator of electricity from RE sources.

• An operator of a transmission or distribution system that commits an offence under his section is liable on summary conviction to a fine not exceeding 10,000 penalty units.

RENEWABLE ENERGY FUND

The RE Fund has been established under the Act to provide financial resources for the promotion, development and utilisation of renewable energy resources.

Moneys from the Fund shall be applied

• For provision of financial incentives, capital subsidies and equity

participation for: – Grid interactive renewable electricity. – Mini-grid and off-grid renewable power systems for remote areas and islands. – RE projects for non-electricity purposes.

• For the promotion of:

– Scientific, technological and innovative research into renewable energy. – research into the establishment of standards for the utilisation of renewable

energy. – the production or fabrication of equipment for the development and utilisation

of renewable energy in the country.

• For Capacity building

RENEWABLE ENERGY FUND

Sources of money of the RE Fund: – Moneys approved by Parliament

– Premiums

– Donors

– Moneys approved EC Board from the Energy Fund

– Levy from the export biofuel

– Moneys provided by the Minister responsible for Finance.

CURRENT DEVELOPMENT

• A 2MW solar plant has been installed in Navrongo, Upper East of Ghana. • A 315kW solar plant has also been installed at Noguchi Memorial Research

Institute at the University of Ghana, Accra.

• Licence Manual for the Service Providers in the Renewable Energy Industry has been developed.

• 8 companies have been granted provisional licences for wholesale Renewable Energy electricity generation.

• The European Union has supported the Energy Commission to prepare a

framework for resourcing and operationalisation of the Renewable Energy Fund.

• Draft Guidelines for net metering has been prepared.

• Standardised PPA is being developed.

• Guidelines for connecting RE plant to the distribution and transmission

systems are being prepared.

CONCLUSION

• With the passage of the RE Act 2011, Act 832, the stage has been set to include Renewable Energy as a key component of the national energy mix in Ghana.

• It would require the effective support of the development partners, bilateral, multilateral and indeed private investors to ensure the successful implementation of the favourable regulatory framework in a win-win situation.

THANKS!!!