Ghana’s industries have been suggested to be the biggest beneficiaries from the addition of nuclear power to the country’s energy mix as cost of electricity supply remains a challenge.
Industry players have time and again bemoaned the high cost of power due to the tendencies that could render the industry uncompetitive as cost of power is burdensome (about 40% of production cost).
Prof. Benjamin Nyarko, the Board Chairman of Nuclear Power Ghana (NPG) in an earlier forum indicated that the exorbitant prices of local goods emanate from high cost of power since producers tend to pass on the cost to consumers.
“Hence, the need to take nuclear power seriously as it generates power cheaper than current energy sources the country is using.”Prof. Benjamin Nyarko, Board Chairman, Nuclear Power Ghana
For a long time, industry players have made calls for a reassessment of the current electricity tariffs system whose structure requires that industries subsidize residential use of power, leading to the payment of high tariffs even above the regional average.
As it stands now, the country’s tariff averages 15.5 cents per kilowatt against 10.5 cents per kilowatt in neighbouring Côte d’Ivoire. Besides, commercial and industrial sectors have to bear huge costs of power supply in the country.
Although the Minister of Energy, Dr. Matthew Opoku Prempeh has indicated that his outfit is contemplating the prospects of special industrial tariff for the sale of electricity and natural gas to specific industries, a more lasting approach to this is to include cost-effective power supply such as nuclear power to the energy mix.
This is because, despite the fact that special tariffs are welcoming, that does not in any way indicate that those tariffs will be optimal given the cheap, reliable and clean energies (nuclear power) available.
Besides, this is only to apply limitedly, in industries such as iron/steel, bauxite/aluminium, fertilizer and ceramics, among others. The reason for their inclusion is that they are key to taking advantage of the African Continental Free Trade Area (AfCFTA), the Minister noted.
Ghana’s energy mix
In 2019, Ghana’s energy mix consisted of a 63 per cent of gas from the country’s offshore oil fields and 7 per cent through the West African Gas pipeline, according to the 2020 data of the Ghana Energy Commission. Electricity supply from gas supply will likely increase further as the Tema LNG begins operation after commissioning.
Meanwhile, renewable energy (nuclear, solar, etc.) as a whole makes up less than 1 per cent of the electricity mix excluding hydro-electric power.
Considering the foregoing, adopting nuclear power into the country’s energy mix will tend to reduce the cost of power supply as well as indicate Ghana’s commitment to renewable energies.
With a high cost of power supply, the cost of production also increases which therefore increases prices of locally produced goods, thus rendering them uncompetitive compared to relatively cheaper imported goods.
Also, the current energy mix, as highlighted above is riddled with weakening infrastructure leading to technical losses which in previous months in this year, resulted in frequent power outages.
“The result is that a persistent 25% of electricity generated in Ghana is lost at the retail end. These are caused by dilapidated infrastructure (technical losses) as well as electricity theft or commercial losses. Ghana’s losses are more than double the sub-Saharan Africa average of 12%.”Dr. Theophilus Acheampong, Energy expert.
Industries can benefit significantly, if nuclear energy comes online to complement the already existing power supply sources. This will therefore reduce the burden on industries and increase their growth and contribution to the economy.