The Swiss renewable energy company NEK Umwelttechnik
AG (NEK) has been developing in the past years six large-scale onshore wind
farms in the Greater Accra Region of Ghana, which are ready for implementation.
The total capacity to be installed is approximately 1,300 MW through the six
projects. These wind farms could produce about 3,400 GWh of green and cheap
electricity each year for the Ghanaian population and the industrial sector.
To supply energy to as many customers as possible, NEK
has established recently in Accra a new renewable energy platform, which will
provide to its customers cheap, sustainable, never-ending, and clean
electricity to cover the increasing electricity demand in Ghana and to overcome
dumsor. The platform is called Anansi
Green Energy Ltd. (Anansi). Anansi will assume, over time, all of NEK’s wind
farms and in addition will also undertake the development and operation of
solar and biomass plants.
This new platform will have several equity partners, lenders,
and investors, including large and well-known international power companies and
green funds. Ghanaian investors, lenders and key stakeholders and institutions will
also be involved in the implementation and financing of Anansi.
The platform will act as a “captive” industrial power
generator by selling the green electricity directly to industrial offtakers. It
is hoped, in the future, Anansi will be the vehicle through which Ghana can
become a renewable hub for West Africa as a whole by also exporting renewable
energy through the existing WAPP network to surrounding countries.
A lot of interested customers
Anansi is now starting to discuss terms with several
interested customers for the delivery of green electricity. The future demand
both in the country and in surrounding markets for green energy will likely grow
significantly.
Although there will always be a need for baseload
energy capacity in the planning of any energy sector, both for environmental
and indeed affordability reasons it will be essential to create a structure
through which renewable energy can be developed, without such relying on the
public sector. Mining companies, the concrete sector, steel manufacturers, but
also other industries and the mobility sector will demand cheap and green
electricity, which can be delivered by Anansi very shortly.
No competition to VRA or ECG and no reliance on Government
of Ghana
Anansi will not become a competitor to ECG, VRA or
NEDCo - nor will it be necessary for Anansi to have the traditional “take or
pay” PPA with ECG or any support from the Government of Ghana. Anansi will be
able to implement its projects without any reliance on the public sector at
all. Indeed, the intent will be that
Anansi will have, as its partners, VRA / ECG in providing baseload capacity to
its customers.
Green Energy as a Megatrend
Green energy is enjoying unanimous support and gaining
political and business momentum around the globe. The global energy sector is
in the midst of a transformation. The global energy transition is now well
underway, with ever-increasing clean energy investment and momentum for
net-zero targets by mid-century. Energy security and sustainability nowadays go
hand in hand and are top of the agenda for many governments worldwide.
Africa is no exception, with the continent facing
rapidly growing energy demand, critical energy access gaps, and an imperative
for development. Africa’s imperative to accelerate its socio-economic
development in a resilient and sustainable way could immensely benefit from
accelerating clean energy deployment, as was stated at the COP28 summit last
December.
Failing to accelerate the development of renewables
poses major threats to the continent already suffering the most from the
impacts of climate change. Yet, while global renewable energy investments are
reaching record-high levels, renewables are still critically underfunded in
Africa, signalling urgent work ahead. This also applies for Ghana: Ghana’s
energy outlook shows an exponential soaring of future energy demand.
Thermal generation continues to require high-cost fuel
and remains subject to the risks inherent in the ability for such fuel to be
continuously delivered. Ghana will require an accelerated development of
renewable energy, but it will not be able to do so if there remains a reliance
on typical grid connected IPP’s with ECG as the sole offtaker and with full
Government backing. It is not possible or reasonable for the public sector
itself to assume such risks going forward.
A different rule book now needs to be written, and
Anansi has the potential to provide that new way forward right away.
VALCO modernization and expansion plans
Volta Aluminum Company Limited (VALCO) has announced
its plan to expand operations and seek a strategic partner which would be
prepared to invest around USD 600 million to
revamp its operations. The goal is to reposition VALCO in a way that
retrofitting will transform it from a loss-making entity into a best-in-class,
profit-making and shareholder value-maximising entity, thus become the ultra-modern
and best smelter in Africa.
With the projection of the building of 4 operating
bauxite mines and 2 refineries under the IAI Masterplan as well as the revival
of the downstream sector, the modernisation and expansion of the VALCO smelter
is timely, thus creating a new VALCO with much more significance than ever
before.
However, such plans require a lot of additional
electricity, which at least for the time being is not available in Ghana. It is
estimated that at the end of the retrofitting and extension program, VALCO will
require more than 1,000 MW of installed electrical power. “Where do we take
this from?”
The volume of green electricity required by VALCO will
be significant with the realistic and probably only solution being the
electricity capable of being produced by Anansi. Anansi will look forward to
creating a partnership with VALCO and VRA, which could allow VALCO to attract
international investment which will require such available green electricity and
will also otherwise allow VRA to significantly expand its operations.
Green Energy, Green Hydrogen and E-Mobility
Green energy from NEK’s wind farms, as well as other solar
plants and biomass facilities through Anansi will provide the cheapest
generation costs for electricity in Ghana. While fossil power plants produce energy
at approximately 15 US Cents per kWh, NEK’s wind farms will produce energy for
less than 8 US Cents per kWh in current pricing. There are possible further
savings to these costs as well through the application of carbon credits.
The renewable projects to be developed by Anansi will
be long term and allow for certainty as to the all-in cost of energy as there
will be no relevance or risk for possible fuel price shocks going forward. The
available wind and solar irradiation will remain free, and Anansi’s customers
will be able to benefit from such.
In addition to green energy, Ghana should consider developing
a ‘Green Hydrogen and Green Fuels’ and an ‘E-Mobility’ policy. The Government should
consider key strategies and relevant road maps for the development of the
“energy carrier” in the future.
Green hydrogen and electric vehicles will need
significant renewable resources to be available, otherwise, they cannot be
called green. A strong political signal will trigger huge investments from
abroad in the energy sector of Ghana and business activities relating to these
future markets. The key for doing so is the implementation of renewable energy
projects.
Outlook
Due to the heavily increasing
demand for cheap and clean electricity in Ghana and abroad, much more renewable
energy even than that capable of being produced in NEK’s planned 6 onshore
windfarms, and the other planned Anansi solar projects and biomass facilities will
be required within the next 5 - 10 years.
However, land for such further
projects may also become a scarce asset, especially in populated areas. This is
one of the reasons why NEK has decided to start the development of two (2)
large offshore wind and solar facilities off the coast of Anloga and Ningo.
These offshore wind and solar
parks will have an installed capacity of approximately 3,100 MW and will
generate more than 7,500 GWh of clean and reliable power per year. These
installations do not require any fuel, LNG, gas, oil or other fossil, outdated
energy sources - the “fuel” is the wind and the sun, which are never-ending,
homemade and always coming back to Ghana for free.
Anansi
Green Energy will play a huge role in the delivery of much-needed green energy
for Ghana already very soon. Now is the time for Anansi to create
its positive green web in delivering sustainable and affordable energy to its
customers, making Ghana a renewable energy hub in West Africa.
- The
writer is CEO NEK and Anansi Green Energy
