In Ghana, A Massive Solar Plant Will Be Bright Spot On 'Dark Continent'

It is an image often bemoaned by energy development professionals: From afar, the continent of more than 1 billion people seems to disappear from view when the sun goes down. Asia and the Middle East have a warm glow at night, while Europe and the United States positively sparkle. But Africa, apart from a few glimmers in the far south and far north, is inky black.

Now Ghana, for one, is making a new effort to turn on the light.

Blue Energy, a British renewable energy investment firm, has confirmed plans to construct Africa’s largest solar panel installation -- a 155-megawatt photovoltaic, or PV, plant -- near Aiwaiso, a municipality in Ghana’s southwestern Nzema district.

Construction will be undertaken by Mere Power Nzema Ltd., a subsidiary of Blue Energy. The firm has been granted a 100-year lease on the site and permission to connect to the Ghanaian power grid.

“Ghana's forward-thinking strategy puts it in a strong position to lead the renewable energy revolution in sub-Saharan Africa,” said Blue Energy CEO Chris Dean in a Tuesday press release.

“Nzema is a case study in how governments can unlock the huge potential for solar energy in Africa. We are delighted that it will make a strong contribution to the national economy, provide much needed generating capacity and help develop the skills of the future.”

In developing countries, power does more than just turn on the lights. It can spur commerce by creating new job opportunities and improving standards of living. In areas where food security is shaky, electricity can power irrigation methods that effect more reliable harvests. It can modernize educational facilities, revolutionize health care clinics and blast through roadblocks on the path to development.

“Installation of more than 630,000 solar PV modules will begin by the end of 2013, and electricity generation will start early the next year, with sections coming on stream as they are completed,” according to the press release. “The project is due to reach full capacity by October 2015.”

The US$400 million endeavor is expected to power approximately 100,000 homes and stimulate 2,100 jobs once it becomes operational.

Ghana is prime real estate for a project of this magnitude. The country enjoys a stable multi-party democracy; it achieved status as a middle income country in 2011, and enjoys steady revenues from exports of cocoa, gold and, more recently, oil.

But the percentage of people living below the poverty line still hovers around 25 percent, and current power generation falls far short of meeting demand in this country of 25 million.

That’s a trend common to developing countries in Africa, and Ghana actually has it better than most. Government figures maintain that 72 percent of the population has access to electricity, though this could be an optimistic figure. Current megawatt capacity is just under 2,500, but energy officials hope to bring it up to 5,000 within the next few years.

Small solar panel installations already exist in rural areas that lack access to the grid, but nothing in Ghana comes close to matching the scale of the planned Nzema installation.

Generally speaking, solar energy makes a lot of sense for sub-Saharan African countries precisely because so little infrastructure exists in the first place. Whereas fully developed states would have to retrofit existing power structures in order to take advantage of modern renewable resources, many developing countries are starting from scratch, especially in rural areas. It’s a paradox that gives underdeveloped countries unique opportunities to become pioneers in creative power generation.

Unfortunately, initial costs for such projects can be prohibitive. Though prices are falling, solar panel installation is still more expensive than other options. (Diesel engines, for instance, remain a popular choice for small-scale power generation.) Though PV energy is ultimately more cost-effective, residents -- and governments -- in developing countries don’t always have the luxury of spending more at the outset, even if it means saving in the long term.

That’s where international assistance can make a lasting difference. Last month, the Ghanaian Energy Ministry announced plans to seek up to US$1 billion in donor assistance for renewable energy projects over the next eight years. And in 2011, the government signed off on a new Renewable Energy Act, which funnels more public funding into clean energy projects.

In the case of Nzema, the Renewable Energy Act played a major role in finalizing agreements between Blue Energy and the Ghanaian government. Under the bill, renewable energy generators are eligible for feed-in tariffs, or FITs, which essentially pay them for the power they generate under a long-term agreement. The 20-year FIT awarded to Blue Energy this month was a clincher in project negotiations.

The goal of the Renewable Energy Act is to promote renewable energy until it makes up at least 10 percent of national power generation, and the Nzema project will take care of one-fifth of that quota if all goes according to plan.

In the best case scenario, the solar installation will set a new precedent for Africa, encouraging other countries to adopt their own versions of Ghana’s forward-thinking energy policies. On this point, Blue Energy CEO Dean is optimistic.

“There's huge potential to develop renewable power in the region,” he said. “We believe Nzema will show other countries what can be achieved and spur them to action.”