As Ghana considers coal-fired energy plant – Some issues

Ghana has an energy crisis. Electricity is being rationed, homes and businesses can’t have sufficient electricity and some are racking up extra costs in finding alternative energy sources by themselves.

The government has been talking about increasing the country’s current power sources from the current 2,125MW to 5000MW by 2016. The extra megawatts of power it says would come from hydro, thermal and solar. But recently, the government has made known its interest in building a coal-fired power plant in the country.

The Ministry of Energy & Petroleum announced July 5, 2013, that the country has accepted a proposal from a Chinese company to generate electricity from a coal-powered plant.

According to the Ministry, a Director at Shenzhen Energy Group, Mr. Hong Can, indicated that the company proposes to build a 700MW coal-fired power plant in Ghana.

“The project which will take 24-30 months to complete will also include the construction of a coal port with approximately 50,000 tons berth,” it said.

It adds that the project which is projected to cost about $700 million, will need two million tons of coal per year to run when completed.
The coal, however it says, citing Mr. Can, “will be imported from South Africa.”

But that decision possibly reflects the country’s energy manager’s ad-hoc approach in dealing with the energy sector which has plunged the sector into its current state of gloom, stifling Ghana’s emergence as a middle income country.

Though a recent World Bank report on Ghana’s energy sector did encourage the removal of barriers to investment in generation capacity through independent power producers, a careful evaluation of energy sources in addition to a “think big” approach and “proactive leadership to the energy sector” are very critical for sustainable energy supply for Ghana’s economic development.

Ghana needs to double its current generation capacity to about 4400 megawatts according to the World Bank. To do so, the Bank recommends the expeditious development of Ghana’s gas fields and a departure from fuel generated electricity.

Given the limited technology and fuel options available to Ghana, the recommendation by the World Bank to use gas is only rational, given the country’s large and under-developed gas reserves. However the government seems to be in favour of adopting a proposal from Shenzhen Energy Group (SEG), the mother Company of Sonon Asogli, an Independent Power Producer in the power sub-sector to develop coal generated power plants, despite evidence that Ghana has no coal resources.

Provided that the coal will be imported from South Africa as the company said, it is not known how much the importation of the coal and the power generated from the plant will cost and if that will be affordable for the ECG the main power distributor. This has been one of the key problems in the power sector – the price of electricity charged by independent power producers are higher than the price the ECG is willing and able to pay.

Coal – how good, how safe for the environment?

While coal might appear cheaper as a source of energy, its long term cost is higher. For instance it is known that compared to natural gas, the price of coal for electric power plants in the United States has remained relatively stable since the 1980s and expected to remain so over the next 25 years.

Coal-fired energy plants might also look attractive, but coal is not clean energy. As pointed out by environmental journalist and author, Joshua Frank in the case of the United States “coal-fired power plants in the US produce approximately 140 million tons of fly ash, scrubber sludge, and additional combustion waste.”

Coal has environmental and health implications and for a country like Ghana, which is already overwhelmed by environmental challenges, going coal would be suicidal!

Today July 9, 2013 the BBC carried a report on the use of coal in China and the effect on human health and life.
The BBC reports that a study published in the Proceedings of the National Academy of Sciences, has found that China’s policy of giving free coal for heating to residents in the north has contributed to shaving 5.5 years off life expectancy there.

According to the study, air pollution from burning coal in the area north of the Huai River, with a population of some 500 million people, was 55% higher than in the south.

The region also had higher rates of heart and lung disease as a result of the policy in force up to 1980.

The study was conducted by researchers from China, the US and Israel, the report indicated.

Impact of coal on climate change

The US, China and India are the world’s top producers and consumers of coal, according to available information. Coal supplies 26.6 percent of energy worldwide, and its use is reported to be responsible for 43.1 percent of global CO2 emissions. CO2 or carbon dioxide emissions are responsible for climate change.

Meanwhile, it has been noted that Ghana’s economy is heavily dependent on climate sensitive sectors such as agriculture, fisheries, tourism and the forest sector.

A Ghana News Agency report citing Dr Seth Osafo, an International Climate Change Expert, says based on a 20-year baseline Climate Change Observation, it is projected that yields of maize and other cereal crops would reduce by seven per cent by 2050 while in 2020, Ghana’s coast lines would have reduced by 465m of seaside land to erosion, resulting in a loss of 1,110sq.km of land placing about 132,200 people at risk.

A study by the University of California, Berkeley says, “Rainfall in the Sahel has dropped 20-30 percent in the 20th century, the world’s most severe long-term drought since measurements from rainfall gauges began in the mid-1800s.”

There is also the phenomenon of desertification, a feature of climate change, which is having devastating effects on African economies, including Ghana.

The northern part of Ghana which is also the poorest is the hardest hit. The northern parts of the country, comprising the Northern, Upper East and Upper West regions, together constitute more than 30 percent of the total land area of the country.

For instance, statistics released in 2007 by Ghana’s Environment Protection Agency (EPA) showed that 49 out of the 138 districts in Ghana were currently in the desert belt. The country is losing about 20,000 hectares of land annually to desertification which is further deepening degradation of farmlands and livelihoods.

According to the World Bank, Ghana has experienced an annual productivity loss of 2.9 percent in all crops and livestock due to erosion and nutrient depletion. This translates into approximately two to five percent of agricultural GDP.

A Deputy Northern Regional Director of the Ministry of Food and Agriculture has been cited by the GNA to have said that over 1.2 million Ghanaians, representing five per cent of the population, are food insecure.

The World Bank has double standards on coal?

It is not clear where the World Bank stands on the issue of coal-fired power plants.

A Reuters report in April 2010 cited the World Bank,  as approving a controversial $3.75 billion loan to develop a coal-fired power plant in South Africa despite the lack of support from the United States, Netherlands and Britain.
“The countries, all major donors to the World Bank, said they abstained from supporting the loan for South African state power utility Eskom due to environmental and other concerns,” it said.

But the Bank opposes Ghana’s decision to build a coal-fired plant.

The Energy Specialist at the Ghana Office of the World Bank had said on a radio station, Citi FM in Accra that the Bank will not support the assertion that coal is a very attractive option for Ghana.

He was quoted as saying, “It can be a very competitive fuel. A lot of times, these are in countries with a lot of national coal resources (it makes it easier). But even in imported cases, for example China where they import a lot of coal, they are starting to see the environmental price that they pay for burning so much coal and are moving towards a more lower-carbon solution,” he added.

“I take the view that it is not a very good option for Ghana. There’s no domestic resource, but there is domestic gas resources. So why wouldn’t you start with the resources that is closer to home and with a lower carbon?” He told the radio station.

Leadership

The recent World Bank report on Ghana’s energy situation minced no words in putting the blame for Ghana’s current power crisis on leadership.

In the foreword to the report which was prepared during a period of electricity shortages and rolling power blackouts, Yusupha Crookes, Ghana Country Director of the World Bank noted that the current power shortfall is particularly serious for two reasons: the frequency of these episodes is increasing – the previous one was just five years ago – “and the economic damage inflicted is greater, because Ghana’s economy has evolved to become ever more dependent on reliable electricity supply,” he said.

The Bank published the report in the belief that it will help bring about policies and decisions that will ensure that Ghana’s emergence as a middle-income economy is not held back by the energy sector, as at present.

“We recommend that government makes a concerted effort to ‘think big’ and provide more direct and proactive leadership to the energy sector, given its centrality to boosting economic growth,” Crookes said.

The Bank noted that solutions to these problems are well known; the challenge is to carry them out. Proactive leadership of the energy sector, with a focus on efficiency and timely delivery, is crucial to Ghana’s ambitions for economic growth.

But obviously, it looks like the government believes that some of the solution lies in coal-fired electricity plants, even though the coal is expected to be imported from South Africa.

By Emmanuel K. Dogbevi & Dode Seidu