Ghana: Renewable Energy Comparative Guide

1 Legal and regulatory framework

1.1 What role does the state play in the renewables industry and which national legislative and regulatory provisions have relevance for the renewables industry in your jurisdiction?

The state oversees the renewables industry through state institutions and different pieces of legislation. It supervises the renewables industry through:

• the Energy Commission;
• the Public Utilities Regulatory Commission (PURC); and
• the Ministry of Energy.

Other institutions with key roles that affect the renewable energy industry include:

• the National Petroleum Authority (NPA);
• the Ghana Standards Authority (GSA);
• the Forestry Commission; and
• the Environmental Protection Agency (EPA).

The government of Ghana is also directly involved in the renewables industry through its two renewables companies:

• the Bui Power Authority (BPA); and
• the Volta River Authority (VRA).

The BPA is committed to exploring renewable energy projects in line with the government's target of increasing the share of renewable energy in the country's energy mix. It was established by the Bui Power Authority Act, 2007 (Act 740), with a mandate to plan, execute and manage:

• the Bui Hydroelectric Project, which was commissioned in 2013; and
• the Bui Generating Station, a peaking plant with a capacity to generate 404 megawatts (MW) of hydropower.

The BPA has undertaken two hydropower initiatives on Ghana's western rivers: the Tsatsadu Micro Hydro Project and the 250 MW Solar Project at the Bui enclave. Additionally, in February 2020 the Ministry of Energy instructed BPA to assume the functions of the Renewable Energy Authority proposed under Section 53 of the Renewable Energy Act, 2011.

The VRA is a state-owned entity responsible for the generation and transmission of electricity in Ghana. It operates the largest hydro generation facility in Ghana, the Akosombo plant.

Other players in the Ghanaian renewables sector include the following:

• The Northern Electricity Distribution Company is a state-owned subsidiary of the VRA. Its mandate is to procure and distribute electricity safely and reliably to the northern region of Ghana.
• State-owned Ghana Grid Company is solely responsible for power transmission throughout the entire country.
• The core mandate of the state-owned Electricity Company of Ghana is to purchase electricity in bulk from the VRA and other independent power producers for distribution nationwide.
• The government of Ghana has undertaken a pilot solar energy project on Pediatorkope Island backed by foreign direct investment as part of the World Bank-funded construction of five pilot mini-grids under the Ghana Energy Development and Access Project. These solar projects have a total capacity of about 200 kilowatts and are expected to provide 24-hour electricity to about 3,500 residents of five island communities in Ghana.

The main pieces of legislation that govern the renewables industry in Ghana include:

• the Renewable Energy Act, 2011;
• the Renewable Energy (Amendment) Act, 2020 (Act 1045);
• the Energy Commission Act, 1997 (Act 541);
• the Ghana Investment Promotion Centre Act, 2013 (Act 865); and
• the Local Content and Local Participation (Electricity Supply industry) Regulations 2018 (LI 2354).

The Renewable Energy Act is the primary statute governing the development, management, utilisation and adequate supply of renewable energy for the generation of heat and power and for other related matters.

Section 2 of the Renewable Energy Act defines 'renewable energy' as energy obtained from non-depleting sources including wind, solar, hydro, biomass, biofuel, landfill gas, sewage gas, geothermal energy, ocean energy and any other energy source designated in writing by the Minister of Energy.

The Renewable Energy Act outlines the responsibilities of the Energy Commission and the PURC, as well as licensing provisions in the renewable energy industry.

The Renewable Energy (Amendment) Act, 2020 (Act 1045) amended the Renewable Energy Act, 2011 (Act 832) in order to:

• establish a competitive procurement scheme and a net-metering scheme in respect of electricity generated from renewable energy sources;
• empower the minister to designate a public entity to perform specific functions in the area of renewable energy and other clean energy alternatives; and
• provide for related matters.

The Energy Commission Act, 1997 (Act 541) establishes the Energy Commission and:

• sets out the functions of the Energy Commission relating to the regulation, management, development and utilisation of energy resources;
• provides for the grant of licences for the transmission, wholesale supply, distribution and sale of electricity and natural gas, and for the refining, storage, bulk distribution, marketing and sale of petroleum products; and
• provides for related matters.

The Ghana Investment Promotion Centre Act, 2013 (Act 865) governs the operation of the Ghana Investment Promotion Centre. It was enacted to demonstrate the Ghanaian government's commitment to encouraging foreign investment in its economy, including the renewable energy sector.

The Local Content and Local Participation (Electricity Supply Industry) Regulations 2018 (LI 2354) specify local content and participation requirements for the renewables industry in relation to the generation of electricity.

1.2 Which bilateral or multilateral instruments or treaties with effect in your jurisdiction have relevance for the renewables industry?

Bilateral agreements: On 23 November 2020, Ghana and Switzerland entered into a bilateral agreement to facilitate the fulfilment of both countries' obligations under the Paris Agreement. The agreement sets out the framework conditions for cooperation between the two countries. It is envisaged that the treaty will facilitate clean cooking and solar lighting in Ghana and benefit up to 5 million Ghanaian households. In addition, the treaty should promote the adoption of green and low-carbon technology solutions across the country, resulting in a plethora of social and environmental benefits.

The partnership is intended to catalyse private sector investment in Ghana's National Energy Access Programme (NCEP), complementing Ghana's nationally determined contributions to the Paris Agreement. The NCEP is projected to benefit up to 5 million households through technologies such as improved cooking stoves and solar photovoltaic installations. Ghana is also exploring further projects under the agreement.

In facilitating the NCEP, this bilateral agreement will also enable Ghana to receive international financial support to implement projects to fulfil its climate commitments.

Multilateral instruments: Ghana is a signatory to several international conventions and treaties, such as the following:

• The Paris Agreement on Intended Nationally Determined Contributions: This is a legally binding international treaty on climate change which was adopted by 196 parties at the UN Climate Change Conference (COP21) in Paris, France, on 12 December 2015.
• The Glasgow Climate Pact: Adopted at the 2021 United Nations Climate Change Conference (COP26), this pact is the first climate agreement that explicitly aims to reduce unabated coal usage. It seeks to revisit emission reduction plans in 2022 in order to try to keep the 1.5 °C Paris Agreement target achievable.
• The Kyoto Protocol: This operationalises the United Nations Framework Convention on Climate Change by committing industrialised countries and economies in transition to limit and reduce greenhouse gas emissions in accordance with agreed individual targets. The convention itself only asks these countries to adopt policies and measures on mitigation and to report periodically.
• The Articles of Agreement of the West African Power Pool (WAPP) Organisation and Functions: The articles of agreement seek to institute a management structure for the WAPP and its organisation and functions, in order to establish a good framework for cooperation between members to ensure improved efficiency of power supply across the Economic Community of West Africa States and increased access to energy for citizens.

In addition, Ghana has ratified all 12 international treaties set by the International Atomic Energy Agency governing the implementation of a nuclear power programme. The treaties include:

• the Convention on Early Notification of a Nuclear Accident;
• the Convention on Assistance in the Case of Nuclear Accident or Radiological Emergency;
• the Convention on Nuclear Safety;
• the Convention on Physical Protection of Nuclear Material;
• the Vienna Convention on Civil Liability for Nuclear Damage; and
• the Comprehensive Safety Standards Agreement.

As a result, Ghana is exploring sustainable options to generate affordable electricity to meet expected demand. This is also in line with Ghana's mission to increase power generation while reducing emissions.

1.3 Which national regulatory bodies are responsible for enforcing the applicable laws and regulations? What powers do they have and what is their general approach in regulating the renewables industry?

• The Energy Commission;
• The PURC;
• The Ministry of Energy;
• The NPA;
• The GSA;
• The Forestry Commission; and
• The EPA.

Energy Commission: The Energy Commission regulates and manages the utilisation of energy resources in Ghana. It:

• collects and analyses energy data and maintains a comprehensive database for national decision making on the development and utilisation of energy resources available to the nation; and
• contributes to the development of national energy policies for the development and utilisation of indigenous energy resources – in particular, renewable energy sources such as solar, wind and biomass.

The Energy Commission also:

• grants licences to private and public entities for the transmission, wholesale supply distribution and sale of electricity and natural gas;
• sets technical performance standards for operators in the renewable energy sector; and
• provides policy advice to the minister of energy.

PURC: The PURC is an independent multi-sectoral regulator set up pursuant to the Public Utilities Regulatory Act, 1997 (Act 538) to regulate the provision of water and electricity utility services.

The PURC:

• calculates and sets electricity tariffs and guides the rates charged for the provision of utility services; and
• protects consumers by monitoring the quality of services provided by utilities.

The PURC has a mandate to approve electricity tariffs as set out in power purchase agreements between generators of electricity (including renewable energy generators) and electricity distribution utilities.

Ministry of Energy: The Ministry of Energy is responsible for:

• the formulation of energy policy and certain aspects of its implementation, monitoring and evaluation; and
• the supervision and coordination of the activities of Ghana's energy sector agencies.

In addition, the following entities have key roles that directly affect the renewable energy industry:

• NPA: The NPA ensures that the correct fraction and price of biofuel in the biofuel blend are in line with the agreed petroleum pricing formula according to Section 43 of the Renewable Energy Act.
• GSA: The GSA develops and monitors standards for renewable energy technologies and biofuel.
• Forestry Commission: The Forestry Commission supports the development and execution of programmes for sustainable wood fuel production and usage.
• EPA: The EPA is responsible for regulating the environment and ensuring the implementation of government policies on the environment.

1.4 What role do regional or local government or public bodies play in the renewables industry?

A number of central government bodies (eg, the Energy Commission, the GSA and the EPA) and agencies play a direct role in the renewables industry. Most of their head offices are based in Accra, the Ghanaian capital. These agencies also have regional offices and, as and when required, those regional offices may provide direction or supervision based on instructions from the national head office.

For instance, the GSA has a regional office in every region in Ghana. However, its test facilities – at which renewable energy products are tested to ensure that they comply with set standards – are located at its head office in Accra.

This notwithstanding, the GSA regional offices are the best point of call for anyone in the regions that wishes to contact the GSA. The regional office will then proceed to contact the head office on behalf of the enquirer. A similar process applies to the EPA.

Regional and local governments or public bodies sometimes issue further approvals for the establishment or operation of renewable energy projects in Ghana. Examples include the local assemblies, from which further approvals such as business operating permits and zoning approvals may be needed before a renewable energy project can commence.

Taxes and levies on wood fuels are also regulated by local government authorities.

Local and municipal authorities are additionally involved in education and training regarding the renewable energy industry for the promotion of renewable energy technologies. For instance, in 2020 a one-day workshop on integrating renewable energy actions and strategies into the Medium-Term Development Plan of Metropolitan Municipal and District Assemblies in the Greater Accra Metropolitan Area was held in Accra. The workshop was organised by the Accra Metropolitan Assembly in collaboration with 350 Ghana Reducing Our Carbon, a leading environmental grassroots organisation in Ghana affiliated with 350.org. The workshop formed part of the efforts to assist Ghana in achieving its nationally determined contributions in relation to the adoption of renewable energy and Goal 7 of the Sustainable Development Goals.

2 Renewables industry

2.1 Which renewable technologies are considered relatively mature in your jurisdiction, and which are emerging as potentially new technologies in the market?

Ghana's renewable energy industry encompasses solar energy, wind energy, biomass, hydro, wave and tidal energy. Hydro is the main and most mature renewable energy source in Ghana, followed by solar, waste to energy and wind energy.

Electricity generation: Electricity generation in Ghana is predominantly from hydro and thermal sources. In 2021, the electricity generation mix comprised approximately:

• 34.1% from hydro;
• 65.3% from thermal; and
• 0.55% from other renewables (e.g. solar and waste-to-energy).

Renewable energy in the form of hydropower accounted for 29.9% of total installed electricity generation capacity as of 2021, at 1,584 megawatts (MW).

Utility-scale solar and waste-to-energy plants (excluding standalone solar systems and hydropower) accounted for 2.63% of total installed electricity generation capacity, at 144 MW. Of this, solar accounted for 99.9% of on-grid installed electricity generation capacity for renewables (excluding the large-scale hydro plants of Akosombo, Kpong and Bui), at 143.9 MW; while waste-to-energy amounted to 0.15 MW. Solar energy is thus more developed than wind and waste-to-energy.

'Waste' includes wood waste, animal waste and organic components of municipal and industrial waste. Waste-to-energy installed electricity capacity for 2021 stood at 0.1 MW, accounting for just 0.07% of the total renewable energy installed generation capacity of Ghana (excluding the large-scale hydro plants of Akosombo, Kpong and Bui).

Ghana is yet to officially generate energy from wind for the national grid. The Ayitepa upwind farm is under construction, with approximately 225 MW of nameplate capacity. At the end of 2021, off-grid and mini-grid wind sources amounted to 0.031 MW (0.02%) of installed generation capacity for renewables (excluding large-scale hydro). Off-grid wind energy accounted for 0.02 MW of installed generation capacity; while mini-grid installed generation capacity for wind accounted for 0.011 MW of installed generation capacity.

Wave and tidal energy are emerging as potentially new technologies in Ghana's renewables market. Ghana's first project establishing the use of wave energy, the Adah Foah Wave Farm, is still in its pilot stage.

2.2 Who are the key players in the renewables industry in your jurisdiction?

The key players in the renewable energy industry – particularly those driving renewable energy in the jurisdiction – include:

• the Ministry of Energy;
• the Environmental Protection Agency;
• the Bui Power Authority;
• the Volta River Authority;
• the Electricity Company of Ghana;
• the Energy Commission and;
• the Ghana Grid Company.

There are also a number of international bodies driving the green renewable agenda in Ghana, including:

• the United Nations – and particularly its Sustainable Development Goals, according to which Ghana has committed to ensure access to modern energy for all in an affordable, reliable and sustainable manner by 2030; and
• the African Development Bank, which has funded a number of renewable energy projects in Ghana, including the Scaling-up Renewable Energy Programme and USAID.

2.3 How much do renewables currently contribute to the domestic energy mix? What are the near-term projections for the role they will play?

Ghana's energy mix consists of a combination of:

• hydroelectric;
• thermal (predominantly fuelled by natural gas, heavy fuel oil, light crude oil and diesel fuel oil); and
• renewable energy sources such as solar, biomass, waste-to-energy and wind.

The electricity generation mix is dominated by hydro and thermal sources.

Generation mix: In 2000, hydro plants generated the highest proportion (about 92%) of Ghana's electricity requirement, with thermal plants generating the remaining 8%. By 2020, the electricity generation mix stood at approximately 36.2% from hydropower, as against 63.6% from thermal energy (generated by natural gas and crude oil) and 0.3% from other renewables. The total electricity generated in 2020 was 20,170 GWh, comprising:

• 7,293 gigawatt-hours (GWh) from hydro generation;
• 12,820 GWh from thermal generation; and
• 57 GWh from renewable sources.

As of 2021, the generation mix stood at approximately 34.1% from hydro, as against 65.3% from thermal and 0.55% from other renewables (eg, solar and waste-to-energy). The share of other renewables in the generation mix in 2021 was double the figure for 2020 (0.28%).

The total electricity generated in 2021 was 22,051 GWh, comprising:

• 7,521 GWh from hydro generation;
• 14,408 GWh from thermal generation; and
• 122 GWh from other renewable sources.

Total installed (electricity generation) capacity: Ghana's installed electricity generation capacity in 2021 was as follows:

• thermal (68.5%);
• hydro (28.9%); and
• renewables such as solar and waste (2.63%).

3 Utility-scale renewables projects

3.1 What utility-scale renewables projects are currently operational or planned in your jurisdiction? What are their key features?

Major completed projects include the following:

• Akosombo, Kpong and Bui: These dams constitute three of the major hydropower projects in Ghana that have been completed and are currently operational. The Akosombo and Kpong dams are two large hydropower stations which generate most of Ghana's electricity, with an installed capacity of 1,020 megawatts (MW) and 600 MW respectively. In 2013, the Bui Dam – Ghana's third dam in the Brong Ahafo region – was constructed on the Black Volta River, with a generation capacity of approximately 400 MW.
• Meinenergy: Huawei Digital Power Technologies, a unit of Chinese multinational tech giant Huawei, has signed a deal with Ghana-based solar project developer Meinergy Technology to build a 1-gigawatt solar plant and 500 megawatt-hours of storage at an unspecified location in Ghana. Under the terms of the deal, Huawei will supply storage systems for the project and Meinergy is responsible for the development and construction of the facility, which is currently operating in Ghana.
• Safisana: Safisana is a waste-to-energy plant commissioned in 2017 by the local municipality of Ashaiman and the Ministries of Energy and Agriculture, and financed by the African Development Bank, the Dutch Ministry of Foreign Affairs and private funds.
• Bui Solar Farm: The Bui Power Authority, as part of the first phase of a 250 MW solar project, commissioned Ghana's first hydro-solar hybrid power generating system in December 2020, which includes a 5 MW floating solar photovoltaic (PV) system and a 22.25 MW solar farm. The solar generation system was connected to the national grid as of April 2021 and currently has an installed capacity of 400 MW.
• The Beijing Xiaocheng Company: This provided Ghana with its first large-scale solar plant to support the country's power generation. Located near Winneba, about 70 kilometres west of the capital, it produces 20 MW of power during the day.
• Volta River Authority (VRA): The VRA has two solar facilities at Navrongo (2.5 MW) and Lawra (6.5 MW) in the northern part of Ghana.

Projects under construction include the following:

• Mere Power: Blue Energy Plc, a UK-based renewable energy developer, is developing a 155 MW solar PV plant at Nzema near Aiwiaso in the western region of Ghana. Once completed, it will be the largest solar PV plant in sub-Saharan Africa. Mere Power Nzema Limited has been established to develop, build, operate and own the power station. Construction on the solar plant began in 2016. It is projected to provide electricity to over 100,000 households upon completion and to increase the nation's electricity-generating capacity by 6%.
• Scaling-up Renewable Energy Program (SREP): Under SREP, the government has begun taking steps towards the accomplishment of the following projects:
• • Renewable energy mini-grids and standalone solar PV systems: Fifty‐five island/lakeside communities are to be selected for mini‐grid and 600 households in 30 selected sparsely populated off‐grid communities for standalone solar PV projects.
  • Solar PV-based net metering with battery storage: Ghana aims to:
  • • develop a comprehensive net metering programme;
    • to deploy at least 15,000 units of roof‐mounted solar PV systems to reduce the economic cost of power for small and medium-sized enterprises and households; and
    • as a result, to add 25 MW to 30 MW of capacity to the generation mix.
  • Utility-scale solar PV and wind power generation: The government plans to increase the number of such projects.

Other planned projects in the pipeline which have reached various stages include the following:

• Ayitepa: The Ayitepa Wind Farm is a 225 MW onshore wind power project planned in Greater Accra, Ghana. The project is expected to be commissioned in 2023.
• Eleqtra Windstar Project: Eleqtra is developing a 50 MW wind energy project located in the Greater Accra region of Ghana.
• Kwamoka: The Kwamoka renewable power project will consist of approximately 10 MW of waste-to-energy generation and 4 MW of solar PV generation, to be developed in phases. It will be located strategically on 14.17 acres of land at the Oti light industrial area near Sokoban Wood Village in the Ashanti region of Ghana. The biomass plant will use unutilised wood and agricultural residues which are usually burned or sent to landfills.
• African Plantation for Sustainable Development (APSD): The APSD is a 60 MW biomass project located near Atebubu town in Brong Ahafo province, central Ghana. The APSD is developing a large concession of up to 42,000 hectares. The project involves growing eucalyptus as a biomass fuel.
• Village Corps Ghana (VCG): VCG is seeking to develop an integrated renewable energy and agroforestry project in the Akyem Abuakwa kingdom in the eastern region of Ghana. The project consists of a 40 MW biomass renewable energy plant integrated with a 10,000-plus hectare organic farming system. Agricultural waste from the farming system will provide the feedstock for the power plant.
• Temple Power: A 100 MW solar plant will be developed in the northern part of Ghana and a 50 MW solar plant will be developed in the Volta region of Ghana.
• Siginik: Siginik Energy Limited is developing a 50 MW ground-mounted tracking solar installation in the Sawla-Tuna Kalba district of Ghana.
• Pwalugu Multipurpose Dam and Irrigation Project: The Pwalugu Multipurpose Dam and Irrigation Project in the northern part of Ghana aims to produce 60 MW of hydropower and 50 MW of solar.
• VRA Wind Power Project: The VRA is working with two wind developers, Vestas and El Sewedy, to develop 150 MW of wind power at four identified sites in the southern part of Ghana based on wind resource potential – Anloga, Anyanui, Lekpogunu and Akplabany.
• Eni 20 MW Solar Power Plant: Italian oil group Eni has announced that it is planning to build a 20 MW PV power plant in the area of Tamale in the north of Ghana. The company has started to assess the possibility of installing floating PV power plants in the Volta basin.
• TFI Power: This is a 60 MW solar plant to be developed in Ghana.
• TC Energy: Local company TC Energy, in collaboration with Swede Energy, is installing a pilot 14.5 MW tidal wave power plant at the confluence of the Volta River and the Gulf of Guinea, at Ada Foah, in the Greater-Accra region. The company intends to utilise sea-based wave energy converters to generate up to 1,000 MW of electricity.

3.2 What authorisations are required for the construction and operation of utility-scale renewables projects in your jurisdiction?

• The Energy Commission's agreement to negotiate a power purchase agreement (PPA) with the relevant offtaker;
• The offtaker's agreement to enter into a PPA;
• An Energy Commission licence – no one can engage in commercial activity in the renewable energy industry without a licence granted under the Renewable Energy Act 2011, as amended;
• A grid connection agreement from the Ghana Grid Company, the Electricity Company of Ghana (ECG) or the Northern Electricity Distribution Company (NEDCO); and
• Approval from the Public Utilities Regulatory Commission (PURC) for the agreed tariff in the PPA.

3.3 Do these authorisations vary in respect of the location of the energy source, the location of the asset or the involvement of a foreign entity?

The process for obtaining such rights/authorisations is the same regardless of the source of energy or the location of the asset, unless a regulator such as the Environmental Protection Agency determines that an undertaking may have an adverse environmental or other effect on a particular location and thus requires compliance with the environmental impact assessment procedures or similar requirements.

A licence to carry out commercial activity in the renewable energy industry – whether that be the production, distribution, storage or similar of renewable energy – will be granted only to:

• a citizen of Ghana;
• a body corporate registered under the Companies Act, 2019 (Act 992); or
• a partnership registered under the Incorporated Private Partnerships Act, 1962 (Act 152).

Therefore, a foreign entity that wishes to construct or operate a utility-scale renewable project will be required to:

• incorporate as a Ghanaian company;
• establish a partnership in Ghana; or
• in the case of an individual, obtain citizenship within the jurisdiction.

Only then will they qualify to obtain a licence. There are also certain minimum capital requirements for foreigners that incorporate a business in Ghana as required by the Ghana Investment Promotion Centre Act 2013 (Act 865).

3.4 What is the procedure for obtaining such authorisations? How long does this typically take? Who is responsible for issuing them?

The Energy Commission assesses each project on its merits prior to granting a licence.

The steps are as follows:

• The applicant wishing to set up a renewable energy project contacts the Energy Commission and the ECG to present the project and its benefits.
• With the Energy Commission's agreement, the applicant must negotiate a PPA with the relevant offtaker, which could be the ECG, the VRA or NEDCO.
• The applicant obtains a power generation licence from the Energy Commission and a grid connection agreement from the Ghana Grid Company, ECG or NEDCO, depending on the grid to which it intends to connect. This licence is usually a condition precedent to the effectiveness of a PPA. A licence can only be granted to:
• • a Ghanaian citizen;
  • a body corporate registered under the Companies Act, 2019 (Act 992); or
  • a partnership registered under the Incorporated Private Partnerships Act, 1962 (Act 152).
• The applicant must also obtain approval from the PURC for the agreed tariff in the PPA. This approval is usually a condition precedent to the effectiveness of a PPA.

It can take as long as 65 days under the law to obtain a licence from the Energy Commission to carry out commercial activity in the renewable energy industry; but in practice this may take longer, depending on the availability of information and other queries that may arise during the process.

3.5 What are the key features of such authorisations, including any process for renewal and the rights and obligations of the holder?

A licence granted by the Energy Commission for the production, transportation, storage, distribution, sale and marketing, importation, exportation/re-exportation and installation and maintenance of renewable energy is subject to the conditions specified in the licence.

Such a licence may include conditions requiring the licensee to provide the commission with the documents, accounts, estimates, returns, environmental impact assessment and management plans or any other information that the commission may require for the purpose of performing its functions under the Renewable Energy Act 2011, as amended, in the manner and at the times as may be reasonably required.

The licence is not transferable.

The licence can be renewed. An application for the renewal of a licence must be submitted to the Energy Commission not later than 60 days before the licence expires. The procedure for renewal of a licence is the same as that applicable to the granting of the original licence. A licensee that fails to renew the licence or whose application for renewal of the licence is rejected by the board will cease to provide the services to which the licence relates.

A licence already granted can be modified by the Energy Commission where it deems fit if the modification is permissible under the terms of the licence or is required in the public interest. The board of the Energy Commission must give the licensee and the general public at least 60 working days' notice:

• stating that the board proposes to make the modification;
• setting out the effect of the modification; and
• inviting representations or objections regarding the modification for consideration.

The holder of a bulk storage licence must install a facility for the storage of renewable energy products, whose suitability must be determined by the Energy Commission.

The holder of a marketing licence must obtain approval for the export of each consignment of wood fuel and biofuel from the Energy Commission.

The holder of an installation and maintenance licence must engage in a commercial activity that correlates to the specific renewable energy technology, including technologies for solar, wind, mini hydro, biogas digester, charcoal kilns and biofuel processing.

The holder of a bulk transportation licence must:

• transport biofuel products or wood fuel; and
• use a registered vehicle to transport the biofuel product or wood fuel product in accordance with the directives of the commission.

A 'registered vehicle' is a vehicle that has been registered with the commission to transport biofuel and wood fuel products.

3.6 Can these authorisations be transferred? If so, how and subject to what consents? Do any restrictions apply to the transfer?

Generally, an authorisation given to one entity to construct or operate utility-scale renewable energy projects in Ghana cannot be transferred to another entity.

A licence to carry out commercial activities in the renewable energy industry is not transferable, except with the prior written approval of the board (the governing body of the Energy Commission).

3.7 What obligations apply in relation to decommissioning? How is this funded?

The decommissioning obligations for renewable energy projects, regardless of the type of renewable energy, are usually set out in the licence granted by the Energy Commission to an entity to engage in that renewable energy project. The relevant PPA will also typically contain decommissioning provisions.

Funding is usually determined by each individual entity and its source of project funds.

3.8 What are the main barriers to the development of utility-scale renewables projects in your jurisdiction?

Key issues in the renewables industry include:

• a lack of financing and the high cost of financing;
• a lack of access to capital from the local market;
• the unavailability of government support agreements;
• low payment ratios by utilities;
• land acquisition challenges;
• a low level of research, development, demonstration and deployment on renewable energy;
• poor knowledge management and information sharing on renewable energy technologies;
• concerns over waste disposal of renewable energy appliances; and
• inadequate indigenous capacity building to drive the development and deployment of renewable energy technologies.

Challenges for specific renewable energy types can be found in Ghana's Renewable Energy Master Plan.

3.9 Environmental issues

1. What environmental regulations or requirements must renewables generators in your jurisdiction observe on an ongoing basis (from pre-development to decommissioning)?
2. What are the potential consequences of breach of these requirements – both for the renewables generator and for its directors, managers and employees?
3. Which national and regional regulatory bodies are responsible for the enforcement of environmental obligations, and what is their general approach in regulating the renewables industry?

(a) What environmental regulations or requirements must renewables generators in your jurisdiction observe on an ongoing basis (from pre-development to decommissioning)?

• Licences to engage in commercial activity in the renewable energy industry often set out their own terms and conditions, which may include environmental protection as well as other stipulations.
• A general requirement to consider environmental safety, health and public safety when planning or engaging in commercial activity in the renewable energy industry is set out in the Renewable Energy Act.
• The Energy Commission may reject an applicant for a licence to carry out commercial activities in the renewables industry on the grounds of environmental safety.
• The Environmental Protection Agency (EPA) may require a person responsible for an undertaking which, in the opinion of the board, has or is likely to have an adverse effect on the environment to submit an environmental impact assessment. A person licensed under the Renewable Energy Act has a duty to obtain and comply with the terms of the respective environmental impact assessment permit.
• A licensee that has been granted a licence under the Renewable Energy Act to produce biofuel from feedstock must obtain the relevant permit from the Ministry of Food and Agriculture and the EPA.
• The EPA Act 1994, which consolidates the law relating to environmental protection, establishes the EPA, which:
• • advises the Minister of Environment on the formulation of environmental policies;
  • coordinates activities of technical bodies; and
  • ensures the control and prevention of waste discharge and protection of the environment generally.
• The Health, Safety, Security and Environmental Manual for Energy Sector Organisations published by the Ministry of Energy in 2019 provides companies in the energy sector with minimum requirements to guide them in the development of their respective operational procedures and processes in managing health, safety, security and environment issues. It provides such companies with the tools to develop a fit-for-purpose health, safety, security and environment management system and standard operating procedures, among other things. The document meets the legal requirements of the Republic of Ghana and also embraces the standard requirements of global best practices in health, safety, security and environment.
• Environmental requirements under this manual include the need for every energy organisation to create an environment monitoring system, which describes the systematic analysis, requirements of operations and support processes to ensure environmental responsibility and adherence to applicable permit and licence requirements.
• The Ministry of Energy has designed a climate change Smart Energy Action Plan to ensure the compliance of government institutions in the energy sector with international climate protocols.

(b) What are the potential consequences of breach of these requirements – both for the renewables generator and for its directors, managers and employees?

• Section 11 of the Renewable Energy Act 2011 provides that even where an applicant for a licence meets the conditions required by the Act for the grant of a licence to engage in commercial activity in the renewable energy industry, the board of the Energy Commission may – for reasons founded on environmental safety, health or public safety, among other things – reject an application for a licence.
• Where a body corporate engages in commercial activity in the renewable energy industry without a licence, that body corporate, on summary conviction, is liable to a fine not exceeding 5,000 penalty units. One penalty unit is GHS 12.
• Where the EPA issues a notice to a person to submit an environmental impact assessment:
• • it will inform the organ or the department of government that is responsible for issuing a licence, permit, approval or consent in connection with a matter affecting the environment that the notice has been issued; and
  • that organ or department may not grant the licence, permit, approval or consent without the prior approval in writing of the EPA after the person has complied with the requirement to submit the environmental impact assessment.
• Where it considers that the activities of an undertaking pose a serious threat to the environment or to public health, the EPA will serve on the person responsible for the undertaking an enforcement notice requiring that person to take the steps stipulated by the EPA to prevent or stop the activities. An enforcement notice must specify:
• • the offending activity;
  • the steps required to be taken;
  • the time within which the steps must be taken; and
  • the immediate cessation, where necessary, of the offending activity.
• A person that acts contrary to an enforcement notice commits an offence and is liable on summary conviction to a fine not exceeding 250 penalty units and in default to a term of imprisonment not exceeding one year, or both a fine and imprisonment.
• Generally, where the person in breach of the noted requirements is a corporate body such as a limited liability company, the company will be liable for the breach; however, where necessary, the veil may be lifted such that the directors/managers/employees of the company may be held liable.

(c) Which national and regional regulatory bodies are responsible for the enforcement of environmental obligations, and what is their general approach in regulating the renewables industry?

Energy Commission: The Energy Commission regulates and manages the utilisation of energy resources in Ghana. It:

• collects and analyses energy data, and maintains a comprehensive database for national decision making on the development and utilisation of energy resources available to the nation;
• contributes to the development of national energy policies for the development and utilisation of indigenous energy resources – in particular, renewable energy sources such as solar, wind and biomass;
• grants licences to private and public entities for the transmission, wholesale supply distribution and sale of electricity and natural gas; and
• sets technical performance standards for operators in the renewable energy sector and provides policy advice to the minister of energy.

The commission has regional offices and, as and when required, such regional offices may provide direction or supervision based on instructions from the national head office.

Ghana Standards Authority (GSA): The GSA develops and monitors standards for renewable energy technologies and biofuel, whether imported or manufactured locally. It also engages in the testing of these products when imported or manufactured to ensure that they meet the required standards.

Although the GSA has a regional office in every region in Ghana – including the Ashanti region, the Brong Ahafo region, the Central region, the Eastern region, the Northern region, the Upper East region, the Upper West region, the Volta Region and the Western region – test facilities are located in the head office only. Products located in any of the regions that need to be tested must be transported to the head office for testing. If the renewable energy product in question cannot be transported, officers will be dispatched from the head office to the relevant location to run the necessary tests.

Forestry Commission: The Forestry Commission supports the development and execution of programmes for sustainable wood fuel production and usage. The commission has regional offices and, as and when required, such regional offices may provide direction or supervision based on instructions from the national head office.

EPA: The EPA is responsible for regulating the environment and ensuring the implementation of government policies on the environment. It has regional offices and, as and when required, such regional offices may provide direction or supervision based on instructions from the national head office.

3.10 Health and safety issues

1. What key health and safety requirements apply to renewables projects in your jurisdiction and are there best practices in relation to health and safety that should be adopted?
2. What are the potential consequences of breach of these requirements – both for the renewables generator and for its directors, managers and employees?

(a) What key health and safety requirements apply to renewables projects in your jurisdiction and are there best practices in relation to health and safety that should be adopted?

Licences to engage in commercial activity in the renewable energy industry often include terms and conditions, which may include health and safety as well as other stipulations.

A duty is placed on persons licensed under the Renewable Energy Act to:

• comply with technical standards and guidelines established by the Energy Commission; and
• maintain their equipment and property in a condition that enables them to effectively provide the service.

A licensee that has been granted a licence under the Renewable Energy Act to produce biofuel from feedstock must obtain the relevant permit from the Ministry of Food and Agriculture and the EPA.

A general requirement to consider health, public safety and environmental safety when planning or engaging in commercial activity in the renewable energy industry is created by the Renewable Energy Act.

The Health, Safety, Security and Environmental Manual for Energy Sector Organisations published by the Ministry of Energy (2019) provides companies in the energy sector with minimum requirements to guide them in the development of their respective operational procedures and processes in managing health, safety, security and environment issues. It provides such companies with the tools for the development of a fit-for-purpose health, safety, security and environment management system and standard operating procedures among other things. The document meets the legal requirements of Ghana and also embraces the standard requirements of global best practices in health, safety, security and the environment.

The manual was drafted in collaboration with sector agencies, industry players and academia. Key health and safety requirements under the manual include the need to create:

• a mobile equipment and pedestrians safety system;
• a machine safeguarding system; and
• an occupational health system.

(b) What are the potential consequences of breach of these requirements – both for the renewables generator and for its directors, managers and employees?

Section 11 of the Renewable Energy Act provides that even where an applicant for a licence meets the conditions required by the act for the grant of a licence to engage in commercial activity in the renewable energy industry, the board of the Energy Commission may – for reasons founded on health, public safety or environmental safety, among other things – reject an application for a licence.

In addition, where a licence holder has not complied with the conditions of a licence, the board may suspend or cancel the licence.

A person that fails to obtain the relevant permit from the Ministry of Food and Agriculture after the grant of a licence to produce biofuel from feedstock or to maintain the equipment and property used in the provision of a renewable energy service, or that fails to comply with the technical standards established by the Energy Commission, commits an offence and is liable on summary conviction to:

• a fine of not more than 5,000 penalty units (GHS 12 per unit); and
• in the case of a continuing offence, a further fine of not more than 50 penalty units for each day during which the offence continues after written notice has been served on the offender.

With respect to licensing, where a body corporate engages in commercial activity in the renewable energy industry without a licence, that body corporate, on summary conviction, is liable to a fine not exceeding 5,000 penalty units.

Generally, where the person in breach of the noted requirements is a corporate body such as a company, the company will be liable for the breach; however, where necessary, the veil may be lifted such that the directors/managers/employees of the company may be liable.

4 Distributed generation projects

4.1 What are the key differences in relation to small-scale distributed generation projects compared to utility-scale projects in your jurisdiction with regard to the regime discussed in question 3?

Generally, both small-scale distributed generation projects and utility-scale projects are subject to the same licensing, environmental safety and health and safety regimes in Ghana.

4.2 What are the main networks that apply to small-scale distributed generation projects in your jurisdiction?

Small-scale solar power plants are widely regarded as being the most suitable to meet the energy needs of rural communities, often off-grid. Component costs are low; as are the qualified local human resources required to build the systems. For example, for several years, Black Spider Ghana has provided solar energy technology to residential communities, farms, hospitals and industrial and commercial developments in both rural and urban areas.

The $220 million Ghana Energy and Development Access Project (GEDAP) is among the first World Bank-financed programmes to focus on inclusive access to renewable energy through off-grid solar services and products.

GEDAP is also emblematic of a larger push for inclusivity: the project included five pilot mini-grids that convert solar energy to electricity for isolated communities in islands in the Volta Lake and the Volta River. These five pilot mini-grids provide 24/7 electricity to about 10,000 beneficiaries for the first time, allowing these fishing communities to use electricity to improve their livelihoods.

Between 2014 and 2018, the World Bank provided more than $11.5 billion in financing for renewable energy and energy efficiency. Mini-grid systems, where several homes are connected (often with pay-as-you-go systems), are emerging as a key player for the cost-effective and reliable electrification of rural areas. The World Bank is currently one of the largest financiers in this sector, supporting about 25% of mini-grid investments in the developing world. 

The pilot programme in the Volta Lake and Volta River also introduced pre-paid meters and pay-as-you-go systems for low-income customers. The project was commissioned in November 2017 by the Ministry of Energy and since then, the communities have used off-grid solar electricity with public illumination for parks and recreation, small businesses and lighting for schools. 

Solar PV electricity is generated from on-grid and off-grid connected solar PV systems. About 89 communities across the country have benefited from over 6,000 small- scale solar systems with a total capacity of 793 kilowatts for household lighting, street lighting, radio and television use, rural mobile phone charging systems and vaccine refrigeration. Institutions such as hotels, schools and hospitals have also installed solar power as either their main electricity supply or an alternative energy source when there is a power outage. Moreover, there are several standalone PV systems in Ghana that have not been quantified. These include:

• community solar PV systems for water pumping;
• solar PV systems for irrigation; and
• systems for individual household and institutional usage.

5 Taxes and incentives

5.1 What national, regional and/or local incentives are available as subsidies or support to facilitate the deployment of renewables projects in your jurisdiction?

There are several incentives for the promotion and development of renewable energy in Ghana:

• Rooftop Solar Photovoltaic (PV) Programme: The Energy Commission launched an incentive scheme by which private individuals could apply to the Energy Commission to receive a capital subsidy in the form of a cash payment for solar panels or the supply of solar panels at no cost, after the individuals had purchased and installed the requisite balance of system components (eg, inverter, batteries, charge controllers).
• Mandatory purchase policy: There is a mandatory purchase policy under the Renewable Energy Act, as amended, which obliges electricity distributors, bulk customers or fossil fuel-based wholesale electricity suppliers to procure a percentage of their total purchase of electricity from a renewable energy source.
• Mandatory connection policy: Under this policy, transmission and distribution system operators are obliged to provide connection services for electricity from renewable energy.
• Renewable Energy Fund: The Renewable Energy Fund is a fund under the Renewable Energy Act which will offer financial support for activities for the promotion, development and utilisation of renewable energy, such as:
• • financial incentives, capital subsidies and production-based subsidies to renewable energy developers; and
  • equity participation in renewable energy projects.
• The fund is yet to be operationalised.
• Energy Fund: The Energy Fund, established under the Energy Commission Act, 1997 (Act 541), applies its monies to promote projects for the development and utilisation of renewable energy resources, including solar energy.
• Competitive Procurement Scheme: The Competitive Procurement Scheme under the Renewable Energy Act, as amended, is established for the purpose of attracting a competitive market rate for electricity generated from a renewable energy source. It enables consumers of electricity in Ghana to benefit from the reduced cost of electricity generation from renewable energy sources through competitive procurement instead of the feed-in tariff scheme.
• Renewable Energy Master Plan: The Renewable Energy Master Plan proposes incentives for renewable energy manufacturing and assembling firms, including:
• • substantial tax reductions;
  • an exemption of materials, components, equipment and machinery that cannot be obtained locally for manufacturing or assembling from import duty and value added tax (VAT) up to the year 2025; and
  • an exemption from import duty on plants and plant parts for generating electricity from renewable energy sources.

5.2 Are any tax reliefs available for investment in renewables projects?

• Locational tax rebates: Locational tax rebates can be enjoyed by companies generating renewable energy outside of Greater Accra or Tema.
• Import duty exemptions: Companies engaged in renewable energy which are registered with the Ghana Investment and Promotion Centre (GIPC) can apply to the GIPC for exemptions from import duties and related charges on their industrial or energy plant, machinery or equipment or parts of the same. Apart from tax incentives, renewable energy companies registered with the GIPC receive additional benefits such as protection against nationalisation or expropriation, among other things.
• VAT exemptions: VAT exemptions are enjoyed by participants in the renewable energy industry. Solar panels imported into Ghana are exempt from VAT and all off-grid solar system components are VAT exempt if imported wholly or already assembled; although such systems are not exempt from VAT if the components are imported separately.

5.3 Have there been any interventions affecting renewables projects in terms of their ability to be constructed or operated, or their ability to earn revenue, in your jurisdiction?

Currently, there is a moratorium on the signing of new power purchase agreements (PPAs) for renewable and conventional/thermal power plants.

5.4 What other incentives are available to promote the development of the renewables industry in your jurisdiction?

Funding: The Renewable Energy Fund (see question 5.1) is yet to be established and managed by the Energy Commission for the provision of financial incentives and the promotion of renewable energy investments in Ghana.

Net metering: Net metering as provided in the Renewable Energy Amendment Act (2020) (Act 1045) is a regulatory model that allows electricity producers to export surplus to the national grid and use the 'exported' electricity to balance out deficits, allowing households/organisations to meet their own electricity demand with their own production. It encourages self-generation of electricity from renewable energy sources on a power cost reduction or climate change mitigation basis and not for income generation.

Security and certainty:

• Ghana has developed two renewable energy grid sub- codes for transmission and distribution networks respectively.
• Grid codes define the technical regulations and behaviour for all active participants in the power system, including power generators, adjustable loads, storage and other assets. The implementation of these codes gives system operators confidence that assets connected to the system will not endanger the security of the electricity supply. Establishing a grid code is an important step in opening up the power sector to private developers or new plant operators and enabling efficient integration of distributed VRE generators.
• Under the Renewable Energy Act, as amended, guidelines for renewable energy purchase obligations have been drafted. The renewable energy purchase obligations help ensure renewable energy producers of demand by requiring that the distribution companies, ECG, NEDCo, and Enclave Power Company (EPC), and all other bulk customers integrate electricity generated from renewable resources in their distribution and consumption mix.
• Provision has been made for draft standardized renewable energy PPAs under the Renewable Energy Act. These are yet to be implemented. Standardized agreements help to ensure easy familiarity with contract terms and higher confidence in contract terms as there is less room for deviation, and, over time, help to establish a body of case laws for future reference.
• Under the Renewable Energy Amendment Act 2020 (Act 1045), distribution utilities are required to procure electricity from consumer-generators to encourage small-scale self-generation through metering. The Act further mandated fossil fuel-based wholesale electricity suppliers, fossil fuel producers and other companies that contribute to greenhouse gas emissions to invest in non-utility scale renewable energy technologies.

Ghana's Renewable Energy Master Plan: This sets out specific incentives for renewable energy manufacturing and assembling as follows:

• local content requirements under the Local Content and Local Participation Regulations, 2018 (LI 2354);
• substantial tax reductions for manufacturing and assembling;
• an import duty and VAT exemption for materials, components, equipment and machinery that cannot be obtained locally for manufacturing or assembling up to the year 2025;
• relevant import duties and other applicable taxes for materials, components, equipment and machinery for which Ghana enjoys a competitive advantage, to promote the local industry;
• an import duty and VAT exemption for the import of plant and plant parts for electricity generation from renewable energy resources; and
• the allocation of a quota for local industries in all government projects to facilitate the expansion of the existing market, and the provision of a government vehicle through existing facilities such as the Venture Capital Trust Fund to grant soft loans to local industries.

6 Financing structures

6.1 Is debt financing typically used and are there any particular structures that are common for renewables projects in your jurisdiction?

Yes, debt financing is typically used for renewables projects in Ghana, often in the form of long-term bank loans.

As renewable energy projects often have high upfront and installation costs and the development of renewable energy projects often spans long periods, access to long-term, low-cost debt financing is vital for the development of renewable energy projects. As a result, long-term debt financing is often relied on, as opposed to short-term debt financing.

6.2 What are the advantages and disadvantages of these different types of structures?

One advantage of long-term debt financing in Ghana is that it helps to conserve operational cash flow, which may be especially important for small-scale companies keen to enter the renewable energy industry in Ghana.

In addition, long-term debt finance usually has fixed interest rates that translate into consistent monthly payments and high predictability. This makes it easier to budget the operational income that a renewable energy producer will need to make the payments.

Large banks, both domestic and international, are involved in project finance. Development partners will often provide funds to local banks at more concessionary rates than would be available on the market where renewable energy projects are involved. Renewable energy projects may thus enjoy lower interest rates from finance institutions which may benefit from such development partners.

Domestic banks are often willing to offer financing for renewable energy projects in Ghana as, in addition to the expected income for the bank, they may gain recognition from international partners for their involvement in renewable energy projects – especially in light of UN Climate Change Conference (COP) 26, COP 27 and the international obligations of countries under the Paris Agreement to reduce harmful emissions and combat climate change.

However, due to the current nature of Ghana's economy, the provision and availability of domestic debt financing – particularly long-term debt financing for capital-intensive renewable energy projects – have slowed down. Interest rates from local banks for loans in Ghanaian Cedis may be as much as 30% and above per annum.

6.3 What other considerations and concerns should parties bear in mind when deciding on a financing structure for a renewables project?

The volatility of exchange rates in Ghana should be considered in determining whether to borrow:

• in US dollars at lower interest rates, while earning in Ghanaian cedis; or
• in Ghanaian cedis at a higher interest rate.

Equity funding or equity/debt funding may be better suited for such long-term renewable projects.

The Renewable Energy Act requires that a fund be created to provide financing for the promotion, development and management of renewable energy resources. The fund is yet to be operationalised. Once the fund is operationalised, it may provide relief to renewable energy projects that may have stalled as a result of a lack of financing.

Power generated from renewable energy enjoys priority in being dispatched, based on the economic merit order dispatch used by the national transmission company, Ghana Grid Company. The technology in generating the power should be sufficiently efficient and up to date to ensure that tariffs from such renewable energy projects remain low.

6.4 What main financing institutions are active in your jurisdiction?

Local and international banks and non-governmental institutions: In 2019, Agence Française de Développement (AFD) and Ghana's Energy Commission signed a technical assistance facility to support local banks and other key stakeholders in developing energy efficiency and renewable energy projects under the Sustainable Use of Natural Resources and Energy Finance (SUNREF) programme in Ghana. This programme emanated from the conclusion of a feasibility study financed by AFD, which highlighted (among other things) the urgent need for investments in the energy efficiency and renewable energy sector in Ghana.

SUNREF is an innovative programme that is part of a worldwide initiative developed by AFD to mobilise public and private banks in Ghana to finance private sector investments involving green technologies and sustainable energy. In addition, the European Union is supporting the programme by financing the technical assistance component, as well as providing an investment grant to eligible projects.

Together with local partner banks Calbank and GCB Bank, SUNREF Ghana is offering businesses, organisations and households the opportunity to access financing for sustainable energy projects and assistance in structuring green investments.

Meanwhile, KfW – a German state-owned investment and development bank and the world's largest national development bank – has partnered with the Ghanaian Ministry of Finance in establishing a green credit line for the refinancing of renewable energy and energy-efficient investments for micro, small and medium-sized enterprises (MSMEs) and households in Ghana. On behalf of KfW, IPC (the Internationale Projekt Consult) designed a potential green credit line structure based on Ghanaian green lending market demand and supply.

Other financing institutions active in the renewable energy industry in Ghana include:

• Energy Commercial Bank;
• Fidelity Bank;
• Ecobank; and
• Absa Bank.

6.5 Which financing markets are usually turned to for sources of debt in your jurisdiction, (eg, local, London, New York)?

Local financing markets as well as international sources in Europe, the United States and Asia are sources of debt in Ghana for renewable energy projects:

• International Finance Corporation (IFC) (headquartered in Washington DC in the United States): The IFC has decades of experience in financing, structuring and leading complex energy transactions in emerging markets, with more than 50 gigawatts (GW) of energy generation financed to date. It is known as a leading financier of low-cost renewable energy and has funded projects with a generation capacity of more than:
• • 8 GW in hydropower;
  • 5 GW in solar energy; and
  • 6 GW in wind energy.
• Deutsche Bank (headquartered in Germany): Deutsche Bank helps clients across the globe to raise sustainable financing through issuing environmental, governance and sustainability bonds. These include green bonds, social bonds, sustainable bonds and bonds linked to sustainability criteria.
• Proparco (headquartered in France): To meet the challenge of climate change and ensure access to affordable, reliable and sustainable energy, Proparco describes its main focus as projects that aim to produce energy from renewable sources and boost energy efficiency. It financed 16 projects with climate co-benefits in 2020 and describes itself as one of the most active development financial institutions in the fight against climate change.
• China-Ghana South-South Cooperation on Renewable Energy Technology Transfer project: The Renewable Energy Master Plan notes that funding for the development of the plan was made available by the China-Ghana South-South Cooperation on Renewable Energy Technology Transfer project – a collaboration between the Energy Commission in Ghana, the Ministry of Science and Technology in China and the United Nations Development Programme country offices in Accra and Beijing. The project, with funding from the Danish International Development Agency, is facilitating the exchange of expertise and technology between China and Ghana, building on China's unique development experience.
• KfW: KfW, a German state-owned investment and development bank and the world's largest national development bank, has partnered with the Ghanaian Ministry of Finance in establishing a green credit line for the refinancing of renewable energy and energy-efficient investments for MSMEs and households in Ghana. On behalf of KfW, the IPC designed a potential green credit line structure based on Ghanaian green lending market demand and supply.

7 Transmission, distribution and export

7.1 What are the applicable processes for connecting renewables projects with transmission, distribution and export networks in your jurisdiction? Do these processes differ between different types of renewable technologies and between renewables and non-renewable projects?

The Energy Commission, in collaboration with relevant institutions, has developed technical codes for connecting renewable energy generating systems to the transmission and distribution systems in Ghana.

The two renewable energy sub-codes propose minimum technical connection and performance requirements that a variable renewable power plant (VRPP) must comply with in order to connect its generating facility to the National Interconnected Transmission System (NITS) or a distribution network in Ghana. The codes define rules and standards to guide network operators when connecting a VRPP to their networks. These are:

• the Renewable Energy Sub-Code for the Transmission System (NITS); and
• the Renewable Energy Sub-Code for Distribution Networks.

Connecting renewables to transmission, distribution and export networks in Ghana generally follows the same procedure as for non-renewable projects and does not differ between different types of renewable technologies.

The Energy Commission grants licences to private and public entities for the transmission, wholesale supply distribution and sale of electricity and natural gas. The transportation, distribution, sale, marketing and exportation of renewable energy are all commercial activities in the renewable energy industry that require a licence from the Energy Commission.

The state is still heavily involved in the energy sector and state entities have a controlling presence in the entire value chain. In the generation phase, the entire hydroelectricity component is controlled by the Volta River Authority (VRA) and the Bui Power Authority (BPA); the VRA is also involved in some aspects of thermal generation along with independent power producers.

Once a producer has been licensed and follows the requisite process for connection to Ghana's grid, excess energy may be exported to the West African Power Pool, to countries such as Burkina Faso, Benin, Togo and Côte d'Ivoire.

Process: The process is as follows:

• The applicant wishing to set up a renewable energy project contacts the Energy Commission and the ECG to present the project and its benefits.
• With the Energy Commission's agreement, the applicant must negotiate a power purchase agreement (PPA) with the relevant offtaker, which could be the Electricity Company of Ghana (ECG), the VRA or the Northern Electricity Distribution Company (NEDCO).
• The applicant obtains a power generation licence from the Energy Commission and a grid connection agreement from the Ghana Grid Company, the ECG or NEDCO, depending on the grid to which it intends to connect. This licence is usually a condition precedent to the effectiveness of a PPA. A licence can only be granted to:
• • a Ghanaian citizen;
  • a body corporate registered under the Companies Act, 2019 (Act 992); or
  • a partnership registered under the Incorporated Private Partnerships Act, 1962 (Act 152).
• The applicant must also obtain approval from the Public Utilities Regulatory Commission for the agreed tariff in the PPA. This approval is usually a condition precedent to the effectiveness of a PPA.

7.2 What requirements and restrictions apply to the export of renewable energy onto the network?

Restriction on exports: According to the Energy Commission's Renewable Energy Licence Manual, entities wishing to export or re-export renewable energy must:

• apply for an export licence; and
• seek specific approval from the Energy Commission.

The manual only provides for export licences for charcoal, biofuel and briquettes/pellets produced from biomass waste authorising the licence holder to export charcoal, biofuel such as ethanol and biodiesel and briquettes/pellets produced from biomass waste, respectively.

Section 22 of the Renewable Energy Act, as amended, further provides that "where the board grants a licence to an applicant to market a renewable energy product, the licensee shall obtain from the commission, approval for the export of each consignment of woodfuel and bio fuel". 'Wood fuel' here includes firewood and charcoal.

Exceptions to the above include the Akosombo and Kpong dams, which were given specific approval by the Energy Commission to export the hydropower generated.

7.3 What other considerations and concerns should be borne in mind in relation to the transmission, distribution and export of renewable energy in your jurisdiction, including participation in ancillary services, wholesale electricity trading markets, network charging arrangements specific to renewables and the ability to construct part of the connection infrastructure? Are there long queues and delays for connection?

Local content obligations: The Local Content and Local Participation (Electricity Supply Industry) Regulations 2017 (LI 2354) set out local content and participation obligations for the renewable energy sector. The regulations aim to achieve a minimum of 15% local participation in ownership.

The local content obligations for the renewable energy sector are as follows:

• Engineering and procurement: At least 70% of the project must go to Ghanaian companies, to be increased to 100% within 10 years.
• Construction works and installations: At least 60% of the construction works of the project must go to Ghanaian companies, to be increased to 90% in six years.
• Post-construction works supplies: At least 70% of the value of all supplies must go to Ghanaian-owned companies, to be increased to 100% in 10 years.
• Services: Minimum local content levels for catering (100%), janitorial services (100%), vehicle maintenance (100%) and equipment servicing (70%) to be increased to 100% in 10 years.
• Management: At least 60% of management staff must be Ghanaians at the beginning of business operations, to be increased to 90% in five years.
• Operations and maintenance staff: At least 70% of operation and maintenance staff must be Ghanaians at any time in the lifetime of the business, to be increased to 80% in five years.
• Other staff: All other staff must be 100% Ghanaian at all times.
• Operation and maintenance contract: At least 50% of the value of all operation and maintenance must be awarded to indigenous Ghanaian companies, to be increased to 80% in five years.

Domestic supply obligation: There are special requirements relating to licences granted by the Energy Commission. For production and supply licences, Section 20 of the Renewable Energy Act provides that:

Currently, there are no long queues or delays for connection.

There is a moratorium on the signing of new PPAs for renewable and conventional/thermal power plants.

7.4 Are there any initiatives, reforms or consultations relating to the connection of renewables projects?

The Renewable Energy Master Plan 2019 and the National Energy Transition Framework aim to increase the percentage of renewable energy in the national generation mix, with 10% of Ghana's total energy production generated from renewable energy sources by 2030. The government of Ghana continues to consult with international donors and other renewable energy-focused institutions towards the achievement of its 2030 target of a 10% renewable energy mix.

8 Storage

8.1 What processes and rules apply to parties wishing to construct and operate a storage (eg, battery, hydrogen, hydro) project in your jurisdiction?

Parties wishing to construct and operate a storage project in Ghana must, under the Renewable Energy Act 2011, as amended, obtain a storage licence from the Energy Commission. The processes and rules applicable to such parties are similar to those for any person desiring to engage in commercial activity in the renewable energy industry in Ghana.

The Renewable Energy Licence Manual of the Energy Commission provides only for a charcoal storage licence and a bulk biofuel storage licence.

The holder of a bulk storage licence that wishes to store renewable energy products in commercial quantities must install a facility for the storage of the renewable energy products, whose suitability will be determined by the Energy Commission. The commission also determines what constitutes commercial quantities.

8.2 Are there any barriers to the development of storage projects in your jurisdiction?

Generally, the barriers that hinder the development of renewable energy in Ghana (see question 3.8) also affect the development of storage projects.

More specifically, the Renewable Energy Master Plan of 2019 notes the following challenges in implementing hydropower schemes in Ghana:

• Hydropower development may flood farmlands and communities;
• The framework and model for the promotion and development of hydropower are inadequate;
• Medium-sized hydro projects have longer lead times and are thus not very attractive to investors;
• Deforestation along water bodies is causing rivers to dry up, affecting hydro

potential over time;

• The impact of illegal small-scale mining is fast changing the characteristics of river bodies and reducing the potential in the western, central and eastern parts of the country; and
• The unit cost of power from remaining hydro sites is high.

8.3 What other considerations and concerns should be borne in mind in relation to the development of storage projects in your jurisdiction?

While the energy transition is steadily progressing, energy storage challenges remain.

Some of these challenges include the following:

• High cost of implementation: Although costs have been dropping in the last decade, batteries still require significant investment for many companies.
• Lack of standardisation in storage systems: In the absence of effective standardisation, each manufacturer creates its own batteries/means of storing energy. This often presents a challenge for projects that evolve over time, as storage systems do not always fit the needs of the project and sometimes batteries need to be replaced.
• Outdated regulatory policy and market design: As is the case whenever a new technology emerges, regulations are not always updated until it has become established and a serious need for regulation has become apparent. With energy storage, we face this challenge.

The recent instability of the local currency can also negatively affect the ability to replace key components of such storage projects, such as batteries.

9 Competition

9.1 Are there any dominant players, including dominant purchasers, in the renewables industry in your jurisdiction?

The key stakeholders that play a role in renewable energy electricity generation, transmission and distribution include:

• the Electricity Company of Ghana (ECG);
• the Volta River Authority;
• independent power producers;
• Ghana Grid Company Limited;
• the Northern Electricity Distribution Company (NEDCO); and
• the National Petroleum Authority.

The ECG is the largest bulk purchaser and distributor of electricity consumed in Ghana (66%); while NEDCO only purchases and distributes about 8% of the total energy. The rest of the energy is consumed by the Volta Aluminium Company, an aluminium and steel company. Mining companies, exports and sectors such as agriculture, health and transport contribute to other energy uses.

9.2 Are there any pro-competition measures that are targeted specifically at renewables generators?

Ghana's Renewable Energy Master Plan seeks to create opportunities through competitive procurement of renewable energy projects (tenders) and purchase obligations to increase investment in the sector.

The Renewable Energy (Amendment) Act, 2020 (Act 1045) amends the Renewable Energy Act, 2011 to establish this competitive procurement scheme and a net-metering scheme in respect of electricity generated from renewable energy sources.

To boost private sector participation in the renewable energy industry, incentives will be given to private sector actors engaged in the local assembly and manufacture of renewable energy technologies and related services to increase their competitiveness. Local renewable energy companies will also be given priority in procurement for government-supported programmes or projects.

In addition, the master plan sets out broad strategies for the successful implementation of renewable energy technologies, including:

• boosting and sustaining the local assembly and manufacture of renewable energy technologies through the systematic phase-out of import duty exemptions on renewable energy technologies where Ghana has a competitive advantage; and
• strategically recommending tax exemptions for components and materials for assembly and manufacture to make renewable energy technologies more competitive on the local and sub-regional markets.

In accordance with the Local Content and Local Participation (Electricity Supply Industry) Regulations, 2017 (LI 2354), and to boost local production, both state-sponsored and private sector renewable energy projects will source a minimum 30% of goods from the local market (where available) in the medium term. The scope and content of local sourcing of goods will be broadened as the local production market matures. All necessary support will be given to the private sector to ensure that the local manufacture and/or assembly of renewable energy technologies – such as batteries, inverters, controllers, photovoltaic modules, efficient cookstoves and alternative fuels (eg, briquettes, pellets and gel fuels) – takes place under Circle II implementation.

10 Disputes

10.1 In your jurisdiction, do disputes typically go to arbitration or litigation, and does this vary for different types of disputes? What sorts of matters tend to come up in disputes?

Arbitration is often used to settle commercial disputes and is most common in the power sector. With increasing globalisation, arbitration is an emerging method of settling investment and business-related disputes. Multinational companies doing business in Ghana, state-related players and several corporate entities now opt for arbitration over litigation, which for many years was the dominant dispute resolution mechanism.

The Renewable Energy Act 2011 provides that the board of the Energy Commission can, on its own initiative or at the request of a licensed person, set up an arbitration panel under the Alternative Dispute Resolution Act, 2010 (Act 798). The arbitration panel is to arbitrate and settle any dispute that arises between licensees where the parties concerned cannot reach an agreement.

The sorts of matters that tend to come up in disputes include the following:

• Joint venture/contractual disputes: Expenditure in renewable energy projects is high and long term, and involves numerous stakeholders. Joint venture or contract disputes may arise between stakeholders in relation to these complex arrangements, which may involve multiple jurisdictions.
• Construction-related disputes: The infrastructure involved in renewable energy projects can be extensive in scope and capacity (eg, offshore wind farms, large solar farms and hydroelectric dams). Therefore, as with any major infrastructure project, typical construction-related disputes may arise, such as delay claims, cost overruns, defects claims and claims relating to design and performance.
• Regulatory disputes: The power industry is heavily regulated. Challenges to various regulators are therefore common.
• Conditions precedent: Disputes may arise where the power producer or purchaser is unable to meet its conditions precedent.

10.2 Have there been any important disputes in the public domain that relate to or may potentially impact on the renewables industry or the deployment of renewables projects?

Our research did not reveal any notable disputes in the renewables industry.

11 Trends and predictions

11.1 How would you describe the current renewables landscape and prevailing trends in your jurisdiction?

Ghana is committed to fulfilling its pledge to implement measures that will address climate change and its negative impacts on the country's socio-economic gains. Therefore, responding to climate change issues is top of the national development agenda. Ghana is thus implementing its nationally determined contributions and the agreements of the UN Climate Change Conference 26 to contribute towards achieving the objectives of the Paris Agreement.

Ghana's NDCs under the Paris Agreement outline two main goals relating to the energy transition:

• scaling up renewable energy penetration by 10% by 2030; and
• scaling up 120 million standard cubic feet of natural gas replacements of light crude oil for electricity generation in thermal plants.

These targets signal a step change in how Ghana intends to manage its petroleum and energy sectors. Data and multi-stakeholder dialogue will be key to inform sustainable transition pathways and monitor climate commitments.

The current Ghanaian environment is therefore more favourable than ever towards renewables in terms of the current attention paid to renewables and the national desire to move towards renewable energy. Ghana has developed its National Energy Transition Framework, a long-term (2022–2070) net-zero framework aimed at decarbonising the energy sector to help Ghana meet its international obligations under the Paris Agreement. It is expected to complement existing efforts with new measures such as:

• increased renewable energy penetration;
• conversion of thermal plants to natural gas; and
• the integration of nuclear power into the energy mix.

The Energy Transition Model in the Renewable Energy Master Plan makes the following forecasts about energy in Ghana:

• Energy demand forecast: Ghana's total energy demand is expected to rise over time due to population and economic growth. The total energy demand is expected to increase from 8,195 kilotonnes of oil equivalent (Ktoe) to 41,725 Ktoe in 2070.
• Electricity production forecast with associated emissions: Electricity production will rise continuously over time, increasing from 18,592 gigawatt-hours (GWh) in 2020 to 344,272 GWh in 2070. Related emissions are projected to increase from 7.5 metric tons of carbon dioxide equivalent (MtCO2e) in 2020 and peak in the mid-2050s, and then decrease to 0 MtCO2e by 2070. The attainment of net zero is attributed to the introduction of cleaner technologies.
• Electricity generation capacity requirement: The electricity generation capacity requirement increased from 5,392 megawatts (MW) in 2020 to 84,308 MW in 2070. Natural gas-fuelled power plants will play a significant role in the generation mix; but to achieve net-zero emission for the electricity generation sector, nuclear power and carbon capture and storage technologies will be required. In terms of cost minimisation and fuel security, nuclear power will become predominant from the mid-2050s.
• Generation of electricity by fuel type: The use of natural gas is expected to decline in the mid-2050s due to the optimal scaling up of nuclear power in the generation mix. Renewable energy in the form of solar and wind will contribute 20% of installed generation capacity by 2070.
• Energy sector emissions: Total emissions will increase from 28 MtCO2e in 2020 and peak by the mid-2050s and decline thereafter. By 2070, emissions are expected to reduce to 14.5 MtCO2e, contributing to economy-wide net-zero emissions. This is due to the switch to cleaner fuels for energy services, such as the adoption of electricity and hydrogen.

All this considered, the current state of Ghana's public debt may present challenges in obtaining a supply of appropriate financing for renewables.

11.2 What influence are net zero commitments having on the development of the renewables industry in your jurisdiction?

The energy transition targets over the next five decades can be found in the National Energy Transition Framework.

The government of Ghana has established the Carbon Credit Fund under the Environmental Protection Agency. Companies outside Ghana are interested in the net-zero agenda but are having difficulty meeting this goal. To facilitate their achievement of a net-zero standard, companies buy carbon credits by providing funding for renewable energy projects in Ghana. This funding in turn makes these renewable energy projects more bankable.

As the government works to increase its energy mix from 1% renewable energy to 10% renewable energy by 2030, we may see more companies setting net-zero targets in the future.

11.3 What new developments are anticipated in the next 12 months, including any proposed legislative reforms?

The president of Ghana has stated:

We anticipate that the purchase and sale of carbon credits by entities in Ghana will increase. In January 2023, Ghana received a $4 million payment as part of its emissions reduction payment agreement pursuant to the Forest Carbon Partnership Facility by the World Bank. Other international private renewable energy companies have expressed interest in setting up business operations in Ghana with the ultimate aim of selling carbon credits.

The government of Ghana has set up the Ghana Carbon Registry (GCR) under the supervision of the Ministry of Environment, Science, Technology and Innovations through the Environmental Protection Agency, to serve as a database for collecting and tracking transactions from mitigation activities at sector, city and corporate levels. As an online database, the GCR:

• collects bottom-up data;
• uses high-quality standards/protocols for quantifying and verifying greenhouse gas emissions reductions of projects;
• issues carbon credits from same; and
• tracks the credits continuously in an efficient and transparent manner.

The GCR has been designed to operationalise Ghana's Article 6 framework, including other markets and non-markets for global, country, corporate and voluntary obligations.

12 Tips and traps

12.1 What are your top tips for renewables generators in your jurisdiction and what potential sticking points would you highlight?

Tips: The legal and regulatory framework for renewable energy in Ghana can sometimes seem complicated and overwhelming. Legal counsel must be consulted through each phase of renewable projects development in Ghana and the possibility of delays in obtaining regulatory approvals should be factored into strategies. Regulatory bodies such as the Energy Commission as well as local banks must be consulted prior to commencing negotiations on power purchase agreements (PPAs) or other commercial agreements.

Sticking points: During the first phase of the Energy Sector Recovery Programme in Ghana in 2019, the government imposed a moratorium on the signing of new PPAs and gas supply arrangements, and suspended all ongoing negotiations on such agreements until further notice or unless properly exempted by the government. This general moratorium on the execution of new PPAs remains in place today. However, renewable energy projects are considered critical to achieve Ghana's energy mix and thus investments and developments in this sector will continue to be top priority.

The lack of government guarantees presents a challenge to the development of power projects where the power purchaser is a government energy rather than a private sector entity.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.