By 
The power sector in Ghana features a dynamic landscape that is rapidly evolving to meet the country’s growing energy demands, with the public and private sector working to enhance grid stability. Ghana’s power sector remains robust, with a significant installed capacity designed to meet national and regional electricity needs.
As of November 2024, the total installed generation capacity, including embedded capacity, in the country stood at approximately 5,507 megawatts (MW). The country’s total electricity consumption for the first half of 2024 was 12,450 gigawatt-hours (GWh), with a projected total consumption of 24,688 GWh by the end of 2024. Ghana is a net exporter of electricity, having exported 2,528 GWh in 2023. Transmission losses have been maintained at a commendable 3.9% as of November 2024, indicating ongoing efficiency efforts. Electricity access rates have further improved, with 88.85% of the population and 87.49% of households connected in 2023, while urban access remains high at over 90%.
ELECTRICITY GENERATION MIX
Ghana’s electricity generation mix is dominated by thermal and hydro sources. For the first half of 2024, hydro power contributed approximately 39.7% of the total generation, showing an increase from previous years, while thermal sources accounted for 59.2%. Renewable energy sources, primarily solar, made up a smaller but growing portion at 0.8%. Projections for 2025 indicate a similar trend, with thermal expected to contribute around 65.8% and hydro 33.1%, while renewables are projected to maintain their 0.8% share.Natural gas is the predominant fuel for thermal electricity generation, with significant consumption projected for 2025. Heavy fuel oil (HFO) is also utilised, with plants like AKSA requiring considerable volumes of HFO for their operations. The reliance on natural gas underscores the importance of stable domestic and imported gas supplies for energy security.
Ghana is actively pursuing the diversification of its energy mix through renewable sources. As of 2023, the total installed renewable energy capacity, primarily solar, reached 132 MW, representing 2.3% of the total installed capacity. Notable solar projects include VRA Solar in Lawra (6.5 MW), Kaleo (28 MW), BXC Solar (20 MW), Meinergy (20 MW), and Bui Solar (55 MW). Bioenergy sources, such as Safisana Biogas (0.1 MW), also contribute. While significant wind energy potential exists with 1,365 MW in the project pipeline, operational wind capacity is yet to make a substantial impact. Ghana’s ambitious target of achieving 10% renewable energy in its electricity mix by 2030 faces challenges, requiring accelerated deployment and substantial investment. Despite the high installed capacity, actual availability in Ghana can be constrained by factors such as shifting hydrological conditions, fuel supply contingencies for thermal plants, and planned maintenance schedules.
The Ghana Grid Company (GRIDCo), which operates the country’s power transmission network, is actively engaged in upgrades to its infrastructure to meet growing demand and maintain high levels of reliability and efficiency. Power distribution is undertaken by the state-owned Electricity Company of Ghana (ECG) and Northern Electricity Distribution Company (NEDCo), alongside the privately managed Enclave Power Company (EPC). ECG is the most dominant distributor, serving the southern zones and covering approximately 90% of public distribution loads. As of November 2024, ECG consumed 15,026 GWh of electricity. NEDCo serves the northern territories, with a consumption of 1,938 GWh as of November 2024. Both ECG and NEDCo are actively involved in rural electrification initiatives and are implementing new technologies, such as smart prepaid meters, to enhance service delivery and revenue collection. EPC, on the other hand, caters to industrial companies within the Tema Free Zones Enclave. Tariff revenue in Ghana’s electricity sector is structured around regulated tariffs set by the Public Utilities Regulatory Commission (PURC) through quarterly reviews.
Revenue components include the Composite Bulk Generation Charge (CBGC), Transmission Service Charge (TSC), Distribution Service Charge (DSC), and various statutory levies. Government subsidies are a crucial element in ensuring affordability and supporting strategic industries. While the objective is to reduce the fiscal burden of government subsidies on the regulated electricity sector, subsidies continue to be applied to lifeline consumers and other categories, and special subsidies are provided to selected mines and steel companies. Recent agreements, including those linked to International Monetary Fund financing, have seen commitments to further tariff adjustments to ensure cost recovery and sector sustainability.
INVESTMENT OPPORTUNITIES
- Off-grid power solutions for rural customers who lack access to and cannot afford electricity.
- Establishment of transmission entities to compete with GRIDCo, the sole transmission entity in the country, and to replace neglected infrastructure.
- Ghana’s consistent sunlight throughout the year makes it viable to rely on solar energy for its electricity demands.
The power sector has emerged as a significant fiscal burden, costing about 2% of GDP annually due to persistent losses. The power crisis from 2012 to 2016, precipitated by the failure of the West African Gas Pipeline, led to severe energy shortages. In response, high-cost thermal power was rapidly procured, engaging private independent power producers under take-or-pay agreements. This approach resulted in surplus installed capacity and financial commitments for power that was neither consumed nor compensated through revenues or tariffs. Coupled with the under-pricing of electricity and the subpar performance of distribution companies, this situation has led to growing sector arrears. At the end of 2022, the accumulated power sector arrears (legacy arrears) were estimated at US$1,319 million and the power sector shortfall for 2023 alone was US$1,528 million. The gas sector contributed an additional US$128 million in losses, bringing the total energy sector shortfall for 2023 to US$1,656 million. Since 2019, an average of 1.7% of GDP each year has been transferred from the budget to address the sector’s recurring financial deficits. It is anticipated that these annual shortfalls will continue to be covered through fiscal transfers in the foreseeable future unless a firmer implementation of the Energy Sector Recovery Program (ESRP) is in place that permanently closes the sector’s financial shortfalls.
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