Policy Makers Face Hard Choices On Energy - Researcher

Kwabenya (Greater Accra), 12 Nov.,

Policy makers, planners, engineers and researchers would have to make several hard choices on the country's energy requirements to be able to meet its development aspirations, a research fellow has said. Dr. Kwame Ampofo, a senior research fellow of the Institute of Industrial Research of the Council for Scientific and Industrial Research (CSIR), said this at the Ghana Atomic Energy Commission (GAEC) at Kwabenya on Monday. He was presenting a paper on ''Energy Implications and Challenges of Ghana - Vision 2020'' at a five-day "Fourth Kumasi College on Energy''. The college, organized by the Ministry of Mines and Energy, Energy Research Group, Ghana, and the GAEC, is being sponsored by the Ghana National Petroleum Corporation, Volta River Authority, and DANAFCO, a pharmaceutical firm. Between 50 and 60 participants made up of policy makers, small scale industrialists, businessmen, and researchers with resource personnel from Ghana, United States, Sweden, Denmark, Austria and Zimbabwe are attending the college. It is under the theme of ''Generating Electricity from Alternative Energy Sources''. Dr. Ampofo, who projected Ghana's energy requirements based on Vision 2020 document, said as the country strives to attain a middle- level income status, supply of electricity and other forms of energy required for rapid economic development will continue to grow over the period. Dr. Ampofo reviewed Ghana's Vision 2020 document and strategies being adopted for its implementation within the broad sectors areas of agriculture, industry, and services. By World Bank classification, he said Ghana is among the world's 40 low-income countries with an average Gross Domestic Product (GDP) of less than 600 dollars per annum at 1991 prices and exchange rates. The country's present population of 18 million with an average per capita income of approximately 400 -450 dollars, is estimated to double to about 36 million people by the year 2020. Dr. Ampofo observed that Ghana's economic system consists of a modern urban sector that consumes practically all of the commercial energy available to the economy and a poverty stricken rural sector that survives basically on traditional energies and technologies. This dual economy, he said, is most fundamental to any strategy that is to be employed for the transformation of the economy. He said the structure of the economy is, however, changing, adding that, as at 1994, the services sector had overtaken agriculture as the mainstay of the economy with a share of 48.4 per cent of GDP, followed by the agriculture sector with 40.6 per cent and industry with 14.2 per cent of GDP. Dr. Ampofo said there is a strong positive relationship between energy and economic growth which depend on production and increased material output which in turn depends on energy as an indispensable factor of production. He stated that differences in rates of urbanization and industrial structure account for part of the variation in energy intensities, adding that countries with a large share of energy-intensive industries such as steel, pulp and paper, chemicals and aluminum, will have higher energy intensities than countries with few energy-intensive industries. ''In general, the economic expansion necessary to achieve higher standards of living for the increasing population as stipulated in Vision 2020 would be expected to lead to large increases in energy consumption,'' he stated. Dr. Ampofo said electricity provides 44 per cent of the industrial energy in Ghana followed by fuelwood with 40 per cent and petroleum products with 16 per cent. ''But as the economy picks up and modern technologies come on line, it is expected that petroleum products would eventually take the place of fuelwood. The high dependency on electricity poses a problem to industry because it is not reliable.'' He said from the projected growth rates for the different sectors of the economy, it is estimated that our energy consumption would double by the year 2010. From 2010 to 2020, he said energy demand would rise more steeply to a more accelerated growth rate of eight per cent and an anticipated general improvements in people's incomes. Dr. Ampofo said a major challenge to the country is the control of population growth and its containment within predetermined limits and attracting sufficient private sector participation in energy sector investment. He called for the correct economic signals through price rationalization and to keep electricity tariffs in pace with cost growth, adding that energy prices need to be brought to the level of long-run marginal cost to encourage conservation and induce economic efficiency. Dr. Ampofo said another challenge is the optimal operation of all energy systems including the organization of plant performance, technical improvements in operation and maintenance procedures, and minimisation of losses, among others. He called for the political will to adopt advanced energy technologies being used in the industrialized world. ''Rural electrification needs to be given critical assessment and rational decisions with regard to how benefits that are obtained from electrification should be distributed, how much consumers should pay for obtaining them and what criteria should be used in the selection of areas for electrification and what supplies technologies should be used.'' He recommended that the Ministry of Mines and Energy, in collaboration with appropriate institutions such as the National Development Planning Commission, CSIR, and the Statistical Services Department, among others, should develop an appropriate energy model of the national economy to ensure comprehensive planning and monitoring of the energy sector. Dr. Ampofo also recommended that the electrical energy resource base must be diversified and all options considered to include dendrothermal (electricity generated from wood) power generation and nuclear energy.