The challenge of energy transition in the Global South: The case of electricity generation planning in Ghana

Abstract

While renewable energy is making inroads in certain jurisdictions, there appears to be little enthusiasm or effort by many countries in the Global South when examining overall patterns of investment, despite numerous countries announcing renewable energy adoption goals. Various studies attribute this apparent lack of interest to a lack of legislative and regulatory instruments, promotional measures, and unattractive market structures. While these may be relevant factors, this study demonstrates that lack of interest can also stem from concerns over levels of unmet energy demand, coupled with the cost of energy generation. The influence of these two factors on the decision to invest in renewable energy is discussed and demonstrated through a case study on electricity generation planning in Ghana. The case study indicates that, given the projected levels of Ghana’s electricity demand and expenses for generation capacity addition, the level of unmet demand could be as high as 18.5% if Ghana were to follow through with its 10% renewable electricity target by 2030. Correspondingly, the cost of electricity provision could increase by over US$221 Million annually – a substantial amount for any country, but particularly for those in the Global South. Results from the case study indicate some of the key reasons why Ghana is nowhere near its 10% renewable electricity target originally set for 2020, and why it is likely the new target year of 2030 will suffer a similar fate. Having highlighted these concerns, the paper then offers suggestions for increasing renewable energy in the Global South.