Ghana’s energy sector contributes significantly to the nation’s Industrial and economic development. This has seen governments enact policies geared at significantly increasing commercial oil output and energy resources towards making Ghana a net exporter of both power and fuel. The sector can be classified into two main categories, petroleum and power.
Ghana’s petroleum industry is grouped into the upstream and downstream sectors. The Upstream activity largely involves the exploration, production, procurement, disposal and decommissioning of crude oil. Thereafter, the downstream sector focuses on the refinery, procurement, distribution and marketing of crude. Ghana has three main commercial oil fields; Jubilee, Tweneboa Enyera Ntomme (TEN) and the Sankofa Gye Nyame field. Oil production from the three fields as at 2019 was about 72.1 million barrels while net gas production was 140,853.67 million standard cubic feet (mmscf) per day.
The power sector of Ghana’s energy mix comprises of hydro generation, thermal generation, embedded generation and renewable energy generation. As of 2019 Ghana had a total of 4,990 Megawatt (MW) of installed generation capacity for grid power with a dependable capacity of 4,580 Megawatt. Renewable energy installation was about 78.9 MW for 2019 and Solar PV at the distribution level was 42.5 MW. However, per the Renewable Energy act passed in 2011 Ghana has a target to increase renewable energy such as solar, wind and thermal use in the country to 10 percent by the year 2020.
Crude oil is currently one of Ghana’s most valuable exports and a major contributor to the national Gross Domestic Product (GDP). According to the Bank of Ghana, the value of crude exported in 2018 was 4.5 billion dollars, making it the second highest foreign exchange earner after gold. Ghana is also a net exporter of power to Togo, Benin and Burkina Faso. Power export is projected to increase with ongoing grid expansions.
Activities of the sector is mainly under the purview of the Ministry of Energy who formulates policies for the sector. The Ghana National Petroleum Corporation (GNPC) oversees the upstream oil and gas sector while the National Petroleum Authority (NPA) regulates the petroleum downstream sector in Ghana. The power sector aside the Ministry of Energy also has the Energy Commission as a technical regulator and the Public Utilities Regulatory Commission as the economic regulator.
Prospects in the energy and renewable energy sector for investors is vast. The renewables sector remains largely untapped and therefore opportunity exists to generate power through solar and wind technologies. The upstream petroleum sector is open for more exploration whilst the downstream sector is another vibrant area for investments for Oil Marketing companies and Bulk Distribution Companies. The petroleum midstream sector is another segment that beckons investments into the oil refinery process to add up to the capacity of the country’s refinery, the Tema Oil Refiner (TOR). Some major existing investors in the petroleum sector include Tullow Oil PLC, Kosmos Energy and ENI Gas.