Supply of reliable energy in Ghana is major issue that affects every aspect of the economy. Petroleum and power are the two main areas under the sector, contributing significantly to the growth of the economy.
The petroleum industry in Ghana is divided into two main parts, the upstream and downstream sector.
The nation’s only petroleum refinery, the Tema Oil Refinery (TOR) is responsible for the upstream activities which include the procurement and refining of crude oil.
The downstream activities on the other hand include the marketing and distribution of petroleum products by Oil Marketing Companies (OMCs) and the pre-mixing of petroleum products for other industrial uses.
Statistics from the Ministry of Energy shows that Ghana has seen an increase in the establishment of OMCs in the last decade. This could be due to the occasional shut down of the TOR. These OMCs mostly import refined oil for local consumption. Prices of petroleum products are regulated by an independent body, the National Petroleum Athority. Petroleum prices in Ghana affect the price of almost everything including utilities. Ghana consumes significant volumes of petroleum products. Importation of crude oil constitutes a significant portion of gross domestic product (GDP).
Currently, the Ghana National Petroleum Council (GNPC) has the mandate to explore for oil within the nation’s territory. Since 2003, the petroleum sector has experienced significant growth, particularly after the discovery of oil in commercial quantities in the Jubilee fields in 2007.
After the discovery, Ghana has seen multinational oil companies such as Tullow Ghana, Kosmos Energy, ENI and Hess Ghana Limited. Their sub-contractors include Schlumberger, Baker Hughes, Weatherford, Ocean Rig and Technip. In January 2011, Ghana’s first commercial oil lifting commenced. By April 2011, 4.7 million barrels of crude oil have been lifted. Currently there are about 11 Petroleum Agreements, which are agreements between the Government of Ghana, GNPC and petroleum operators signifying the increased interest in Ghana’s oil industry.
In the area of oil and gas, Ghana has a huge prospect in the future. According to the GNPC, recent discoveries indicate that the country’s oil and gas resources stretch across the country’s shoreline from the Cape Three points in the West to Keta in the East. Another important area is the Volta Basin which is also believed to hold oil and gas reserves. The Government of Ghana, through GNPC is seeking to fully maximize Ghana’s prospects in the oil industry. It has recently sought to extend the country’s continental shelf to increase the country’s oil and gas scope. Arrival of the the Floating Production Storage Offloading (FPSO) Prof. Evans Atta Mills in 2016 to commence operations in the TEN Field indicate more gas production in addition to the FPSO Kwame Nkrumah
In Ghana, hydroelectricity is the primary source of power and is generated by the Volta River Authority (VRA).The Electricity Company of Ghana distributes electricity mainly in the southern sector of the country whiles the VRA is responsible for the northern sector.
Currently, the VRA has a monopoly over the generation of power in the country and its main source of power is hydroelectric, which is environmentally friendly. Ghana also operates a second hydro dam, the Bui Dam. However, in recent times the fast drop in the water level has threatened consistent supply of electricity. This has resulted in a relatively small percentage of power being generated from thermal sources as government pursues a deliberate policy to increase thermal power. It is important to point out that population growth; rural electrification and expansion in industries have led to an increase in thermal power. In an attempt to satisfy this need the government of Ghana in collaboration with private companies completed the Takoradi thermal plant which now supplies about 650 MW of power to the VRA.
The Public Utilities Regulatory Commission (PURC) is responsible for regulating the cost of energy in Ghana. Ghana exports power to neighbouring Togo and has an agreement to export or import power to Cote D’Ivoire as the situation demands.