Ghana’s ambition to bolster its industrial transformation hinges on securing a reliable baseload energy source to support its burgeoning industries.
President Akufo-Addo’s initiative to integrate 1000 MW of nuclear energy into the nation’s energy mix underscores a commitment to reliable and clean energy, aligning with Sustainable Development Goals (SDGs) 7 and 14.
This move has garnered applause from various stakeholders, notably the Association of Ghana Industries (AGI), which sees competitive energy costs as vital for business growth.
Presently, Ghana boasts an installed capacity exceeding 5000 MW but relies on over 4000 MW for actual consumption. In response to escalating energy costs, the AGI’s Energy Service Centre (AGI-ESC) launched a network in 2023 to promote renewable energy usage within the industrial sector.
This initiative aims to enhance energy efficiency, reducing both costs and carbon emissions. According to AGI’s CEO, Seth Twum Akwaboah, the current cost of power to industry—19 cents per kilowatt-hour—constitutes over 30% of production costs, posing a significant challenge to growth.
Nuclear Energy: A Game Changer
A perfect energy mix that includes nuclear power could address Ghana’s energy security and affordability issues. Introducing nuclear energy is expected to lower the cost per kilowatt-hour for businesses, thus reducing overall production costs.
Statistics suggest that nuclear energy could significantly transform the economy, increasing business capacity to employ more of the labor force.
Ghana’s pursuit of nuclear energy has reached an advanced stage, having completed Phase 1 of the International Atomic Energy Agency’s (IAEA) infrastructural requirements. The country is now at the vendor selection stage, aiming to choose a specific technology by the end of 2024.
While the government has yet to decide between large nuclear reactors and small modular reactors (SMRs), Nuclear Power Ghana (NPG) has indicated that a decision will be made soon.
For substantial industrial transformation, Ghana should prioritize large-scale modular reactors capable of achieving the 1000 MW target. This approach ensures efficient power distribution to industries. Observations from visits to the United States and Japan suggest these countries offer models suitable for replication in Ghana.
Large nuclear facilities can spur the development of numerous ancillary industries, such as welding, food and beverage, garments, and supply chain businesses, significantly boosting employment.
In contrast, small modular reactors, typically factory-manufactured and assembled on-site, might not provide the same economic spillovers. A large-scale reactor, with proper operation, could meet the AGI’s needs for affordable and reliable power, enabling businesses to thrive and contribute more significantly to economic growth.
Enhancing Regional Energy Influence
Choosing a large-scale reactor would also position Ghana as a potential power exporter within West Africa. Apart from Egypt and South Africa, few African nations are aggressively pursuing nuclear power. Thus, Ghana could become a hub for training and capacity building in nuclear energy within the region.
Historically, financing for nuclear projects has been a challenge due to the reluctance of institutions like the World Bank and IMF to support such initiatives. However, the executive director of NPG, Steven Yamoah, has revealed ongoing discussions to reconsider these positions.
As global institutions increasingly commit to energy transition and climate change mitigation, they are rethinking their stance on funding projects that reduce carbon footprints, including nuclear energy. There are high-level talks to establish an International Bank for Nuclear Infrastructure to provide sustainable funding for nuclear projects.
Ghana’s decision to integrate nuclear power into its energy mix is a strategic move to enhance its energy supply and support industrial growth. This initiative promises significant benefits for the AGI through reduced energy costs and the provision of secure, reliable, and clean power.
Prioritizing large-scale nuclear reactors will not only address current energy challenges but also pave the way for a robust industrial sector, economic growth, and regional energy leadership.
