Ghana to face power crisis in 2023 and beyond

Ghana’s energy supply requires urgent, purposeful and significant investment to undo the current precarious situation the country finds itself. A study by the Centre for Socioeconomic Studies (CSS) based on official and publicly available data shows the country’s current energy provision is critically unhealthy and tottering towards a power crisis.

CSS is concerned that the country faces a dire energy situation from 2023 going into the near future. This will further exacerbate the microeconomic distress facing the country and adversely affect the social and economic livelihood of majority of Ghanaians, especially the rural and urban poor, persons in precarious employment, among others.

Our analysis of the data indicates Ghana would face generation/supply deficits of at least 140MW and 518MW in 2023 and 2024 respectively. For 2025 and 2026, Ghana will see generation/supply shortfalls of at least 467MW and 916MW respectively; provided the remaining power generation projects of combined capacity of 465MW come onboard by the end of 2024.

However, should the status quo remain at the end of 2024, 2025 and 2026 will see generation/supply deficits of at least 930MW and 1,379MW respectively.

Evidently, when we consider the best-case scenario where all currently-installed power plants are producing at dependable capacities, or judging from the Government’s present commitments to ongoing additional generation capacity projects which are likely to come online by the end of 2024 to mid 2025, Ghana will be back to a period where it will still experience severe power cuts.

Seemingly, Ghana’s best-case scenario is still worrying when one considers the coming on stream of all ongoing power projects, with the inclusion or
utilisation of the standard 18% operating reserve margin. This leaves Ghana with barely any form of energy buffers (which the reserve margin is to provide), especially when one juxtaposes it with the consistent annual peak power demand growth of over 9%.

Again, another best-case scenario for Ghana is where the ongoing power projects would not come on board by end of 2024 (which is the status quo plus utilisation of the 18% reserve margin). If this holds, the country will still suffer power crisis by 2025 with a deficit of at least 39MW. While the 39MW deficit may look small, it is still significant on the basis that you are operating without any buffers, which the 18% reserve margin is supposed to provide.

This also means there would be no room to shut down any of the plants for
maintenance or un/expected repair works, neither should there be any transmission losses.

Unfortunately, the available data also shows it is practically impossible for the above scenarios to hold promise for the country considering the current rate and poor nature of investment, together with the progress of ongoing projects; Bridge Power Phase II, AKSA Phase II and Pwalugu Hydro/Solar projects, all meant to come online by end of 2024 or later in 2025.

Considering these projects have a combined potential generation capacity of 465MW, Ghana will still be looking at a generation deficit of at least 467MW and
916MW in 2025 and 2026 respectively should these projects be completed on time.
CSS is aware of the two IPP projects, Bridge Power Phase II and yet to begin AKSA Phase II.

Since the construction of thermal power plants usually take at least three (3) or more years to be completed, Ghana’s current energy situation means the country will face another severe power crises (Dumsor) from 2023 and beyond. CSS is drawing the attention of policy actors in the sector and especially the
government of Ghana through the Ministry of Energy to come out with concrete, economically prudent and lasting short to medium term plans to prevent this looming crisis, with consideration for cheap and efficient energy for the long term. This would mitigate and alleviate the plight of suffering Ghanaians and businesses.