1. Perspectives on The Future of the Energy Sector
2019 GhIE ANNUAL CONFERENCE
Perspectives on The Future of the Energy Sector
Ing. Dr. Nii Darko Asante
Director, Technical Regulation
Energy Commission

2. Overview Power Sector Gas Sector Where Are we Going?
Supply Demand Balance
Outlook for Capacity Additions
Disruptive Technology
Gas Sector
Outlook for Gas Use
Where Are we Going?

3. Power Sector
Supply Demand Balance

4. Over Capacity in Power Sector
There is over-capacity of generation, and there is no need for additional thermal generation till mid 2020s
Net dependable capacity is about 4,000 MW, and will increase to over 4,600 MW by the end of 2019 with addition of about 700 MW of capacity currently under construction
Current recorded peak demand is 2,691 MW, and is expected to grow to about 3,100 MW by 2022.
After including a 20% reserve margin on top of the peak demand, there is significant excess capacity until the mid-2020s.
Even under an unlikely high demand scenario, there will be significant excess capacity until the middle of the next decade.

5. Supply-Demand Balance (Reference Case)
1,160
1,500
1,930
1,780
1,580
DRAFT -- NOT FOR DISTRIBUTION

6. Supply-Demand Balance (High Case)
680
490
820
1,140
1,750
DRAFT -- NOT FOR DISTRIBUTION

7. Power Sector
Outlook for Capacity Additions

8. Additional Generation Capacity
Many conventional and renewable Power Purchase Agreements already signed by ECG
Some attempt to delay and/or cancel some of them
Ghana has some commitments on Climate Change Mitigation
No major impact on build plan
Costs of Renewables (Solar) continuing to drop
Solar may become competitive even with excess generation capacity
Will however need to consume contracted gas (more on this later)

9. Transmission Improvements
Additional transmission builds are necessary over time to support new local generation capacity, and the need to improve grid stability and reliability, particularly in the Middle Belt and NEDCO regions.
Transmission builds lower the overall system cost and allows for greater export opportunities.
Reliability improves upon completion of current transmission projects including the 330kV Aboadze-Prestea-Kumasi-Tamale-Bolga line—
Integrating variable RE capacity up to 10-15% of total system capacity improves reliability of supply in the northern part of the country during off-peak hours, and reduces system losses.

10. DRAFT -- NOT FOR DISTRIBUTION
Least Regrets Capacity & Transmission Additions – Reference Demand
Gen 0MW
Gen 180 MW
80 MW Small Hydro
100 MW Solar
Trans 125 MVA
Gen 250 MW
100 MW Solar
150 MW Wind
Trans 140 MVA
Gen 410 MW
200 MW Solar
150 MW Wind
60 MW Biomass
Gen 600 MW
500 MW CC
100 MW Solar
Gen 530 MW
280 MW CC
50 MW Solar
200 MW Wind
Trans. 235 MVA
Gen 1890 MW
480 MW Solar
300 MW Wind
1,110MW CC
Trans. 425 MVA
DRAFT -- NOT FOR DISTRIBUTION

11. Power Sector
Disruptive Technology

12. Distributed Generation
What is it?
Small grid-connected generation (mainly solar) that is located within the distribution network (sometimes on customer premises)
What does it do?
Lowers cost of supply to customer
What is the problem?
Avoids centralised planning process (risk of stranded assets),
lower cost of supply can undermine established economics of power generation & supply.
Things will need to change!

13. A few years ago we were trying to reduce demand!!!
Electric Vehicles
Introduction and Promotion of Electric Vehicles
Private vehicles and/or Electric buses for public transport
Utilise redundant power generation capacity
Replace Oil Imports with Increased Power Consumption
Would Contribute to Climate Change Mitigation
A few years ago we were trying to reduce demand!!!

14. Gas Sector
Supply Demand Balance

15. Excess Supply of Gas
With completion of OCTP Sankofa project, there is an oversupply of gas, and this may increase to about 550 MMscfd with introduction of LNG from 2020 onwards, and create a huge annual financial burden.
On a regional basis, oversupply will be in the Western region, which shall require transfer of gas to East through the WAGP.
As usage volumes increase in the East (Tema), there is an economic justification of building an onshore gas pipeline between Tema and Takoradi.

16. Gas Supply-Demand Balance
Contracted Gas Supplies (MMscfd)
Year
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Greater Jubilee (AG) 96 97 93 94
103
108
106
111
110 48
TEN (AG + NAG) 10 30 50 49 47 46 45 42 31 23 19
OCTP Sankofa (NAG)
140
171
AKER (HESS) 35 65 77 90 85 70
Sub-total indiginous gas supply
246
298
314
318
353
379
386
402
412
409
382
361
WAPCo/N-Gas 60
Rosneft LNG
250
WAGL LNG
180
Continental Fuels LNG
Sub-total imported LNG supply
490
430
Total Contracted Supply
306
448
894
898
933
899
906
922
932
929
902
881
834
Gas Demand (MMscfd)
Power Sector (From IPSMP Ref Case)
Western Power Enclave
157
179
172
156
124
126
127
129
Eastern Power Enclave 61 84 81
101
146
216
224
232
241
258
275
292
310
Sub-total (Power)
217
263
254
257
286
339
350
360
370
387
404
422
439
Non Power Sectors
Western Region
6.5
7.5 29
Fertiliser Western Region)
Eastern Region 20
Northern Regions (Bauxite Kumasi) 15
Sub-total (Non Power)
120
130
135
150
Total Demand (Power & Non Power)
271
338
377
416
474
500
510
520
537
554
572
589
Gas Balance Surplus/(Shortage) 82
177
556
521
517
424
406
392
347
309
245

17. Gas Sector
Outlook for Gas Use

18. Outlook for Gas Use Short-term actions: Medium to long-term actions
Reduce OCTP take-or-pay volumes.
Delay development of non-associated gas fields.
Delay LNG development in both Tema and Takoradi.
Medium to long-term actions
Stimulate economically viable (high-value) non-power use of gas (e.g. CNG for transport).

19. So where are we going…?

20. Heaven knows where we are going…
Upward pressure on pricing
Redundant Capacity of gas and electricity
Locked into expensive supplies of gas and electricity
Stranded distribution and transmission assets
Private distribution pushing up prices by bringing all costs into open
Pointers to lower energy prices
Increased consumption due to economic growth wiping out excess
Competitive procurement delivering lower energy supply costs
Innovation and Technology driving down prices
Efficiency gains from private distribution bringing down costs

21. We know we will!
THANK YOU.