Ghana’s Energy Transition Efforts: Fuel Switch and Its Implications [Part 2]

Ghana’s Energy Transition Efforts: Fuel Switch and Its Implications [Part 2]

Preamble: 

Part 1 focused on the historical data/information on Ghana’s energy generation through the use of crude oil. Ghana started commercial exploration of oil in 2011, which expectedly led to increase or more  generation of natural gas. This led to a policy decision (other than just flaring) to maximize the natural gas  by converting it as (transition) fuel for power generation. Part 2 of this paper therefore focuses on natural  gas production and how its usage has contributed to Ghana’s emission reduction efforts based on 2021  data. 

Introduction: 

Ghana’s total GHG emissions for electricity generation in 2019 were estimated at 6.23 MtCO2e  representing 29.6% higher than the levels reported in 2016. The 2019 emission translates into a CO2 intensity of 0.34 ktCO2e/GWh. Since 1993 when thermal electricity kicked in, the total emissions have gone up by nearly 3353%, from a low of 0.18 MtCO2e to 6.23 MtCO2e in 2019 at a 14.6 annual growth rate. Given the efforts to get more natural-gas-based fired thermal plants,  several initiatives were put in place to:  

– Expand indigenous natural gas supply base. So far, natural gas production consumption has nearly doubled.  

– Invest in an additional thermal capacity that would have dual-fuel technology capability.

 – Ensure a reliable natural gas supply from Nigeria through the West Africa Gas Pipeline and  Ghana National Gas Company.  

– Make improvements in the efficiency of thermal plants through the conversion of single cycles to combined cycles. 

Ghana’s energy mix is composed of hydro (30.55%), renewables (0.82%) and thermal plants  (68.63%). The thermal plants run on natural gas (99.44%), Heavy Fuel Oils [HFO] (0.34%) and  Light Crude Oil [LCO] (0.22%) which shows a heavy reliance of gas for power generation.  

In 2019, Ghana’s total energy sector greenhouse gas emissions summed up to 27.3 MtCO2e.  The emission levels made the energy sector the largest source of GHG emissions, followed by  Land Use, Land-Use Change, and Forestry (LULUCF). Beyond 2016, the energy sector emissions started to decline largely due to the increasing use of natural gas for electricity generation instead of heavy fuel oils. As a result, between 2017 and 2019, total emissions for the energy sector declined from 39.42 MtCO2e to 27.30 MtCO2e. Increasing shift to natural gas-based in the energy mix – In 2019, oil (38.3%) and biomass (37.8%) dominated the primary energy supply compared to natural gas of 18.2% and renewable (hydro and solar) of 5.7%.

However, between 2016 and  2019, natural gas recorded the highest growth of 149%, followed by renewables of 12%, whereas oil declined by 23% and biomass remained unchanged. In terms of electricity generation, hydro share reduced from 43% to 39.9%, while the thermal and solar components increased from 57%  to 59.8% and 0.2% to 0.3%, respectively. For thermal components, while fuel oil consumption declined by 48%, natural gas almost tripled over the same period. Consistent decline in gas flaring  – the percentage of gas flared in total gas production decreased from 14% in 2016 to 4% in 2019. 1 

Natural gas is the main gaseous fuel in the country produced domestically by Ghana National  Gas Company (GNGC). Additional national gas is imported from Nigeria through the West Africa  Gas Pipeline. Natural gas is mainly utilised in electricity generation. 

Ghana’s Energy Generation Capacity: 

The Volta River Authority (VRA) being the lead power generation institution has a number of installed power plants with different power generation capacities. VRA currently has a total installed capacity of 2,740 MW as seen in Table 1 below with type of plant and fuel type used. 

Table 1: [National Installed Capacity] 

*LCO – Light Crude Oil | *DFO – Distillate Fuel Oil | *HFO – Heavy Fuel Oil

Source: Volta River Authority (VRA) 

Additionally, Table 2 provides detailed information on other installed Capacity of Independent Power Producers (IPPs) and other Plants up to a total of 1,679 MW which are as follows: 

Table 2: [Other Installed Capacity of Independent Power Producers] 

*LCO – Light Crude Oil | *DFO – Distillate Fuel Oil | *HFO – Heavy Fuel Oil

Source: Volta River Authority (VRA). 

Both tables above show that Ghana’s total energy installed capacity is 4,419 MW with most of the  thermal plants powered with natural gas. The statistics show that installed power plants of both  VRA and independent power producers are geared more towards the use of natural gas in  generating energy. The Thermal plants are combined cycle models using both diesel and natural  gas.

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Table 3: Gas Supply Analysis 

Source: Petroleum Commission, 2018 

From Table 3 above, the approximate daily gas supply in 2017 was 103 mmscf from the Greater  Jubilee, TEN, and WAPCo/N-Gas fields. A total of 394.4mmscf was expected in 2018 due to  additional supply from Sankofa. The Petroleum Commission projected a daily supply of  878.6mmscf by 2025 with supply from Greater Jubilee, TEN, Sankofa, Hess, WAPCo/N-Gas,  Gazprom LNG and WAGL LNG fields. Again, this shows how Ghana is increasingly producing  more natural gas, which suggests that switching to the usage of natural gas may be a viable  option in generating electricity. 

The Public Interest and Accountability Committee (PIAC) annual reports from 2011 – 2017 from  Figure 1 above shows that there was no gas production between 2011 and 2013 in spite of oil  production within the same period. This was because the necessary gas infrastructure wasn’t  ready or operational. This situation led to gas flaring in spite of the existence of a no-gas-flaring 

policy. The Environmental Protection Agency (EPA) had granted the Jubilee Operator – Tullow  Ghana – a permit to flare up to 500 million standard cubic feet per month from June to October, 2014 when the Western Corridor Gas Infrastructure Development Project (WCGIDP) was expected to be completed. The EPA’s permission is reported to have been granted following a  ‘no objection’ from the Ministry of Energy and Petroleum contrary to its much-touted “no gas flaring  policy” (PIAC, 2014). A no gas flaring policy however does not mean gas cannot be flared but  should be done at acceptable levels.  

For the first time since oil production commenced in late 2010, a total of 55,758mmscf of natural  gas was realized in 2014 with the consistent increase in production over the period.  

Calculating emission savings through Natural Gas: 

This calculation is based on the IPCC Default Emission Factor for Natural Gas use and Fuel oil  use: 

For the purposes of this example, the total amount of Natural Gas consumed in 2021 for energy  generation in Ghana will be used which is 133,517.05 TJ.  

*tCO2 – Tonnes of carbon dioxide  

*LCO – Light Crude Oil 

*EF – Emission Co-efficient  

*NG – Natural Gas 

Therefore, 

tCO2 = [LCO (EF)-NG (EF)]*NG 

= (73.3 – 56.1) * 133,517.05 

= (17.2) * 133,517.05  

= 2,296,493.26 or 2,296.5kt 

This means that in 2021, there was emission savings of 2,296.5kt as a result of natural gas usage  in power generation as against crude oil.  

The industrial use of natural gas commenced in 2017. Between 2017 and 2019, the consumption levels increased by 59.4% with production of natural gas going up at the same rate. It moved from  2,655.71 MMscf2 in 2010 to 44,952.49 in 2016 and further up by 277% to 169,611.61 MMscf. Of the total natural gas production, 55% was re-injected into the oil well, 27% was transferred to  Ghana National Gas Company for further processing, 8% was used as their fuel on the rig and  11% was flared.

On the other hand, natural gas for further downstream processing increased from  3% of the total national gas production in 2014 to 36% in 2019. The considerable reductions in gas flaring were due to gas injection to reduce environmental impacts and the increased  downstream processing in response to the government’s national gas development policy. 

Conclusion: 

Given the volumes of natural gas generated and its associated low emission levels, it was argued  that it would make economic and environmental sense to generate energy supply by utilizing the  natural gas resource as (transition) fuel. This perhaps explains why Ghana’s power generation  has significantly shifted from the use of crude oil to natural gas. Nonetheless, other schools of  thought hold the view that Ghana has different sources of clean energy to maximize or optimize.  

Part III of this paper therefore will focus on the various transition efforts set in place to shift Ghana  towards clean and sustainable energy generation and the potential implications.