Energy Ghana Magazine Vol 3

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TOP 10 COUNTRIES

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POWERING GHANA IN 2017 TIME TO DEAL WITH THE TRIPPLE F'S (FUEL,FINANCE & FLIP-FLOPS) Interview: Dr. Fred McBagonluri, Ashesi University.

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EDITORIAL

W

e welcome you to another edition of our Energy Magazine which features all the happenings in the energy sector (downstream, midstream, and upstream) while looking at other related issues from Africa and the world at large. We congratulate H.E. Nana Akuffo Addo as he takes the mantle of leadership as the next president of Ghana. While wishing him well, this edition takes a critical look at the energy expectation from his administration especially knowing that the same problem persists. We are hopeful he will be Powering Ghana adequately in 2017. The question of what happens after the passage of the E&P law in Ghana is somewhat crucial to the effectiveness of the bill and it benefits subsequently. The several perspectives of the aftermath of the E& P bill in Ghana is an interesting read in this edition. Again, the move by some West African countries to ban dirty fuel imports was captured with enthusiasm. Five West African countries agreed to ban the importation of Europe's Dirty fuels. A move that would dramatically reduce vehicle emissions and help more than 250 million people breath safer, cleaner air. Nigeria, Benin, Togo, Ghana, and Cote d'Ivoire agreed in Abuja, to introduce strict standards to ensure cleaner, low Sulphur diesel fuels, and vehicle emission standards, effectively cutting off Europe's West Africa market to export its dirty fuels. Also, we took a keen interest in the nuclear energy in South Africa. Nuclear Energy is becoming a dirty word to them. The question one would ask is why? The nuclear reactors are still a plan on paper. But already the noxious debate over their future has made nuclear energy a dirty word in South Africa - to build or not to build. Equity and gender balance in energy policy making leaves most of us unclear as to whether it's a mirage or a reality. Let's interrogate it further as captured in an exciting special report. Further in this edition, we looked at how Donald Trump's energy strategy hinges on OPEC and Russia as he takes over the oval office amidst World Bank forecast of raising oil prices in 2017. This definitely draws the attention of all oil producing countries. Among the many interesting issues that usually crop up in the Energy Sector, we couldn't have left out corporate social responsibility in Ghana; especially at the upstream level. Contextually, firms operating in Ghana undertake their CSR initiatives on account of the foregoing. As a consequence, CSR initiatives in the country are fundamentally viewed as the decisions of strategic nature taken by corporate entities to voluntarily tackle the social conditions which have the potential to hamper the accomplishment of their corporate goals. This edition features many stories including health and safety news, and an exclusive interview with one of Ghana's seasoned Engineering inventors' and industry expert; Dr. Fred McBagonluri of Ashesi University. We believe this edition will stimulate your thoughts and enrich you greatly in this industry. Thank you

Henry Teinor Editor

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Energy Ghana Magazine

CONTENT

33-34 Cover Story Powering Ghana In 2017 Time To Deal With The Tripple F's (Fuel,Finance & Flip- ops)

Cover Design: Blackimagestudio blackimagestudio@gmail.com

Editorial Committee Dr. Joe Asamoah(Head) Dr. Ishmael AckahTheo Acheampong, PhD Dr. Kobina Nyanteh Henry Teinor Nana Owusu Kyere

Content

In side ...

? 7-8 Industry News/Upstream After E& P Law What Follows Next for Ghana?

Chief Marketing Officer Fred Kyei Sarpong Marketing Emmanuel Sarpong Creative, Design & Layout Joseph Gyasi Web Developer Michael Kwabena Afreh

17-20

9-10 11-12

+4915217023059

Theo Acheampong

Business/Investment

21-24

Feature/Gas Flaring

25-28

CSR/Upstream

29-30

Opinion/Renewable Vrs Coal

31-32

Feature/OPEC Matters

35-36

Company pro le/Palisade

37-38

Mining/News

James Be-Apuo +13472617667

Nigeria

Utibe Joseph

41-44

+2348054887754

Bill Gates launches $1 billion breakthrough energy investment fund Gas aring, an environmental irresponsibility or an economic waste? Corporate Social Responsibility in Ghana's upstream oil and gas industry

Why the government's plans for coal must be replaced by a renewable energy alternative

The signs to watch in the oil market to determine if the OPEC agreement is actually working Industry leading forecasting and risk modelling software-within your excel spreadsheet Gold Fields to spend $1.4 billion prolonging Ghana mine life Mining injects GHC1.35bn to economy

Interview/Dr. Fred Mcbagonluri PUBLISHER Energy Media Group (EMG) Office: Spintex Road - Accra Tel: +233 (0) 30 3960 569 Email: info@energyghana.com Web: www.energyghana.com

Trump energy strategy hinges on OPEC and Russia

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+447960125329

USA

News/Global

World Bank Raises 2017 Oil Price Forecast

Correspondence Germany Sarah Mensah UK

West African countries ban Europe's dirty fuel imports In South Africa, Nuclear Energy is Becoming A Dirty Word

Special Report/Women In Parliament Equity And Gender Balance In Energy Policy Making; Is It A Mirage Or A Reality?

News/Africa

Industry expert and an inventor, one of Ghana's seasoned Engineering lecturers at Ashesi University.

AngloGold Ashanti hits $161m in cash ow despite challenges

39-40 47-50

Energy ghana “Local in focus, global in perspective”

53-54

Event/AOG Summit Africa oil governance summit 2016 in pictures

Politics/Election & Electricity Ghana's Electricity Policy Since 1920: The Plans, the Promises and the Election Cycle

HS& E/News Ghana is ready to handle oil spills - EPA 5 Ways To Prevent Burns In The Workplace

45-46 Discovery Top 10 countries that use green energy

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55-56

Technology/Innovation The Spherical Sun Power Generator


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INDUSTRY NEWS/UPSTREAM

After E& P Law What Follows Next for Ghana? S

everal energy experts and Civil Society Organisations which have been much concerned with the development and management of Ghana's

(PIB). An editorial session titled “Ghana first”, in the Nigerian newspaper commended the Ghanaian authority for having the foresight to pass the bill into

multinational corporations to do business with it as well as attract more investments into the industry.” “For a country where oil was

? nascent oil and gas industry have also applauded government and all stakeholders for the passage of the Petroleum (Exploration and Production) Bill into law. Nigeria, a leading oil producer on the continent expressed its excitements in its national newspaper news report days after the passage of the law. The report suggests the World's leading oil producer is fascinated about the swiftness with which Ghana, a country that only found oil 9 years ago, managed to pass the bill into Law as Nigeria keeps fumbling with the passage of her – Petroleum Industry Bill

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law, while their country hesitate. “An interesting thing about the development is that before now, the country's petroleum industry had a 1984 law which regulated the sector; but the country still felt the need to rework the law to, as the energy minister, Emmanuel Kofi Armah Buah noted, make it tighter and to reflect international standards and best practices.” The article reads; “With this development, Ghana has sent a message to the international community that it is set to encourage

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discovered only about nine years ago, this is a feat of sorts, compared with Nigeria where oil was discovered in 1956 but is still battling to have its PIB passed into law. The law governing the sector in Nigeria for now is fairly obsolete.” With the discovery of larger commercial quantities of oil and gas in deep water offshore Ghana, it became necessary for the bill to be passed as the new phase of oil exploration had come with new challenges with actual development, production and utilisation of its oil and gas resources.

On August 4th 2016, The Petroleum (Exploration and Production) Bill, was passed into law, after a long and extensive consultative process. The law was aimed at strengthening and improving the legal environment governing the exploration and production of fossil fuel. The Chairman for the Civil Society Platform on Oil and Gas and also the Steering Committee Chairman of the Ghana Extractive Industry Transparency Initiative (GHEITI), Dr. Steve Manteaw has described the passage of the law as a welcomed move. Adding, it was long overdue. He noted the need for a new Petroleum (Exploration and Production) law to replace the PNDC Law 84 was muted in 2008, after the first ever Oil and Gas Conference. There are several reasons why the PNDC Law 84 needed to be changed, he said. Among some of the reasons, were situations when KOSMOS Energy at a time wanted to sell its shares in the Jubilee Field, the government at then put in a proposal that, the offer should first be given to the government of Ghana before any other party. But, the government's proposal was not grounded well since there was no provision in PNDC Law 84 to support it. However, he noted that, the current Act, Petroleum (Exploration and Production) Act 2016 still has issues in it that need to be addressed. One of such issues, he mentioned was the provision that gives the Minister the


Energy Ghana Magazine

discretional power to throw away bidding results in awarding of oil block contracts and use his powers to award the contract to an entity he deems fit. He believes that this provision provides room for abuse of transparency and accountability in the award of oil blocks. Also, the energy think tank, the Africa Centre for Energy Policy (ACEP), has said the passage of the Petroleum (Exploration and Production) Act 2016 by Parliament is welcome news for the oil and gas sector. However, ACEP says the absence of punitive actions for conflict of interest by public officials blots the impeccable work by Parliament. “We are however worried that an important provision relating to penalty for conflict of interest of public officers has not been incorporated in the Act despite many calls for it. In Liberia's Petroleum Act, 2014, a conflict of interest and penalty clause reads; 'An officer in the public service engaged in the implementation of this Act shall not, in his or her private capacity, knowingly, directly or indirectly, acquire, attempt to acquire or hold: (a) a petroleum right or an interest in a petroleum right; (b) a direct or indirect economic interest, participation interest or share in an entity that is authorized under this Act to carry out petroleum right in Liberia; or (c) a direct or indirect economic interest, participation interest or share in a company that is providing goods or services to a holder of a petroleum right under this Act. A person who contravenes this commits an offence and is liable on conviction to a fine not exceeding fifty thousand US dollars or imprisonment

fulfill the obligations under the agreement.

not exceeding five years or both,'” ACEP said in a release. Ÿ

The establishment of a public register for the disclosure of Petroleum Agreements, Authorizations, and Permits, which will be open to the public.

Ÿ

A requirement for GNPC to seek parliamentary approval if it borrows in excess of US$30 million.

However, the think tank says it will continue to campaign for the provision on conflict of interest to eventually reflect in future amendments to the Act. “We believe strongly that it will deter the complicity of rent-seeking public officials from undermining the good governance principles in the Act,” ACEP stated. The bill was first laid before Parliament in 2012 but years of stakeholder consultations delayed its passage. ACEP says it has also taken positive note of the provisions of the new Act that will foster transparency in the sector. They include:

Ÿ

An open and competitive public tender for the allocation of petroleum rights

Ÿ

A requirement for the publication by the Minister, the reasons for vetoing the outcome of a competitive public tender. This addresses the wide use of discretion by the Minister previously proposed in the Bill.

Ÿ

Ÿ

The use of direct negotiation if only one company expresses interest in the area after a notice to tender has been published. A requirement to enter into Petroleum Agreement with persons or companies that have the requisite technical competence and financial capacity to

“We also take note of the provision for the disclosure of beneficial ownership information in the Companies Amendment Act, 2016, which will complement the governance principles provided for in the Petroleum Act,” ACEP said in the release. These are very strong governance provisions, which make the Act very progressive, and an important milestone in Ghana's history of oil and gas resource management said the energy think tank. ACEP has been at the forefront campaigning with other stakeholders for good governance principles to be incorporated in the Petroleum Act. “At this point, it is our expectation that all Ghanaians will show interest in the implementation of the Act. We wish therefore to call on Government to issue the appropriate implementing regulations under the Act to ensure effective operationalization of the Act.

particularly the Chairman and Members of the Committee on Mines and Energy for their great contribution to the Act. We would also like to commend the Minister of Petroleum, Emmanuel Armah Kofi Buah for his commitment and hard work in pushing for the Bill to be passed. Finally, we salute our partners and all citizens of Ghana for their role and support in championing the cause of good governance in Ghana's oil and gas management,” said ACEP. Ghana has been applauded for the step taken to ensure there exists a law to regulate the oil and gas sector. But, much to this, are the concerns raised by the experts on the omissions of some vital provisions in the law to guide the imminent abuse of the Minister's discretionary powers in the award of oil blocks. Also, an issue of major concern is the worries raised by ACEP about an important provision relating to penalty for conflict of interest of public officers which has not been incorporated in the Act despite many calls for it; citing the Liberia Petroleum Act, 2014 as an example. Will something be done in the near future about the law to ensure that those pertinent concerns raised are addressed to ensure wholesomeness as commended for the law? Probably, a review or amendment would be needed to allow the law to include special clauses to avoid the use of political power to abuse the law. Credit: Adnan Adams Mohammed

We would like to commend Parliament for passing this very progressive Act

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Energy Ghana Magazine

NEWS/AFRICA

West African countries ban Europe's dirty fuel imports

F

ive West African countries have agreed to ban importing Europe's dirty fuels, a move that will dramatically reduce vehicle emissions and help more than 250 million people breath safer, cleaner air. Together, the countries of Nigeria, Benin, Togo, Ghana, and Cote d'Ivoire agreed in Abuja, to introduce a strict standards to ensure a cleaner, low sulfur diesel fuels and vehicle emission standards, effectively cutting off Europe's West Africa market

to export its dirty fuels. A report by Public Eye exposed how European trading companies were exploiting the weak regulatory standards in West African countries, allowing for the export of fuels with sulfur levels up to 300 times higher than is permitted in Europe. Erik Solheim, the head of UN Environment said: "West Africa is sending a strong message that it is no longer

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accepting dirty fuels from Europe. Their decision to set strict new standards for cleaner, safer fuels and advanced vehicle emission standards shows they are placing the health of their people first. Their move is an example for countries around the world to follow. Air pollution is killing millions of people every year and we need to ensure that all countries urgently introduce cleaner fuels and vehicles to help reduce the shocking statistics."

Alongside the introduction of the new standards, the West African group has agreed to upgrade the operations of their national refineries, both public and privately owned, to produce fuels of the same standards by 2020. UN Environment has been supporting countries in West Africa to develop policies and standards to stop the practice of importing fuel with dangerously high sulphur levels and introduce cleaner fuels and vehicles. Reducing

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the emissions of the global fleet is essential for reducing urban air pollution and climate emissions. A combination of low sulfur fuels with advanced vehicle standards can reduce harmful emissions of vehicles by as much as 90 percent. Nigeria's Environment Minister Amina J Mohamed said: "For 20 years Nigeria has not been able to address the vehicle pollution crisis due to the poor fuels we have been importing. Today we are taking a huge leap forward limiting sulfur in fuels from 3000 parts per million to 50 parts per million. This will result in major air quality benefits in our cities and will allow us to set modern vehicle standards." In The Hague, Minister Amina J Mohamed will join Minister Lilianne Ploumen, the Dutch Minister of Foreign Trade and Development Cooperation, to take stock of the progress that is being made in improving the quality of fuels being exported from Dutch ports to West Africa. Minister Ploumen of The Netherlands, where much of the dirty fuels that are being imported to West Africa come from, said: "The recent report from the NGO, Public Eye made it abundantly clear that

coordinated action is needed to stop the practice of exporting dirty fuels to West Africa. I am very pleased West African governments quickly decided to introduce standards that will help to access European standard quality fuels. Their people deserve cleaner air, better health and a cleaner environment. I commend UN Environment for their excellent work." UN Environment is hosting the Secretariat of the Partnership for Clean Fuels and Vehicles(PCFV); a global public-private partnership that supports a shift to cleaner fuels and vehicles worldwide. When the Partnership started its work on promoting low sulfur fuels in 2005, not a single low- and middleincome country used lowsulfur fuels. Today, 23 countries have shifted to low sulfur fuels and another 40 are on their way. Last year, East African countries moved to low sulfur fuels and the decision by West African countries to follow suit will add a further five to the total number of countries that have achieved low sulfur fuels. UN Environment is also hosting the Climate and Clean Air Coalition, whose members recently adopted a global strategy for moving the world to clean low sulfur fuels and advanced emissions standards, which would save an estimated 100,000 premature deaths per year by 2030. Source: UNEP.ORG


Energy Ghana Magazine

In South Africa,

Nuclear Energy Is Becoming A Dirty Word

T

he nuclear reactors are still a plan on paper. But already the noxious debate over their future has made nuclear energy a dirty word in South Africa. To build or not to

the shining beacon of a renewable-based future. On the Fieldstone Africa Renewable Index (FARI), South Africa's ranking has plummeted off the charts entirely, prompting concerns

social life but also disrupting health, education and small scale industries.

build – the stalemate over the proposed nuclear reactors to power the continent's most advanced economy shows no sign of being resolved.The sharp divisions over a nuclear-powered future are now beginning to hurt South Africa’s nascent renewable industry.

amongst investors over green energy's future in the country. Its decline is ironic given that the rainbow nation had topped the continent-wide list just four months ago.

landfill gas-to-power began operation in capital Johannesburg last week. The largest project of its kind in South Africa, the plant at Robinson Deep landfill is the first of the five planned sites and has the capacity to generate 3 megawatts of clean energy – enough to power more than 5000 homes.

State power utility Eskom is dragging its feet on honoring government-brokered deals with private renewable companies. Its refusal to purchase 250 megawatts of power from the wind and solar projects has left its Irish and Saudi Arabian suppliers fuming and in limbo. More than scampering the deals, Eskom's actions, critically, threaten to undermine the gains made by the country's green energy program, which many have come to hail as

With a cluster of over 100 solar and wind projects, South Africa is still currently home to the world's fastest growing renewable program, generating 2.2 gigawatts of energy. According to FARI, the country's program has delivered enormous economic value for South Africa, attracting R196.4 billion ($14.4billion) in investments and created 20,000 jobs. The program was started in 2010 in response to incessant power cuts South Africans endured day after day. They blamed the cuts for not only troubling their private and

Touching another small yet unique milestone the country's first independent

tariffs because current arrangements make it 'very expensive' to buy power from renewable producers. Eskom's stance, however, is openly questionable,

But Eskom's snub just when the green energy industry is beginning to thrive in South Africa is not without reason. The state utility remains adamant that green energy from renewables is unreliable during peak times. Defending its position not to sign off 20year Power Purchase Agreements (PPAs) with the contracted companies, the agency claims it's protecting the consumers from higher

particularly in view of its staunch support for the nuclear power plant proposals. While green energy suppliers have accused the agency of abusing its power, the environmental groups and civic rights organization have challenged its rigidity and claims over the matter. Another reason for dismally low faith in Eskom's capability and judgement on future energy policy is its failure to finish the construction and commission of Medupi and Kusile coalpowered power plants. Both projects have missed their deadlines and are woefully over budget now. Credit: Nishtha Chugh

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Energy Ghana Magazine

NEWS/GLOBAL

Trump Energy Strategy Hinges On OPEC And Russia

P

resident-elect Trump's recent message on his plans for his first 100 days in office singled out energy policy.

Whether Trump’s policies will result in a blooming energy industry, however, depends on more than just federal policy.

The Trump energy policy may include opening up additional federal lands for oil and cancel job-killing gas restrictions on the exploration, auctioning production of American leases for energy – including shale offshore energy and clean coal drilling in the Atlantic Ocean or streamlining the federal permitting process for new energy transportation infrastructure and petrochemical projects. Reducing regulations and providing dropped precipitously since 2014. Large companies scrapped mega-projects and restructured to eliminate wasteful positions , while smaller companies took on more debt, sold off assets, cut costs, merged or went

Specifically, his administration plans to

bankrupt. Even now, with oil in the mid-$40 range, companies are expanding operations only in the cheapest and easiest to access shale oil fields. For example, the Permian Basin in Texas is booming while the Bakken fields in North Dakota are quiet. Whether energy companies

meeting in Vienna, Austria. There, ministers from the Organization of the Petroleum Exporting Countries (OPEC's) fourteen member nations will consider a plan to adopt new oil production quotas that may reduce the cartel's oil output by as much as 4.5% over the first six months of 2017.

and their investors are willing to participate in new opportunities in the United States may rest on the outcome of the OPEC

Credit: Ellen R. Wald

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Dec. 2014


Energy Ghana Magazine

World Bank Raises 2017 Oil Price Forecast

T

he World Bank is raising its 2017 forecast for crude oil prices to $55 per barrel from $53 per barrel as members of the Organization of the Petroleum Exporting Countries (OPEC) prepare to limit production after a long period of unrestrained output. Energy prices, which include oil, natural gas, and coal, are projected to jump almost 25 percent overall next year, a larger increase than anticipated in July. The revised forecast appears in the World Bank's latest Commodity Markets Outlook.

A modest recovery is projected for most commodities in 2017 as demand strengthens and supplies tighten. Metals and minerals prices are expected to rise 4.1 percent next year, a 0.5 percentage point upward revision due to increasing supply tightness. Zinc prices are forecast to rise more than 20 percent following the closure of some large zinc mines and production cuts in earlier years. Gold is projected to decline slightly next year to $1,219 per ounce as interest rates are likely to

anticipated to rise a slowerthan-expected 2 percent.

Oil prices are expected to average $43 per barrel in 2016, unchanged from the July report. “We expect a solid rise in energy prices, led by oil, next year,” said John Baffes, Senior Economist and lead author of the Commodity Markets Outlook. “However, there is considerable uncertainty around the outlook as we await the details and the implementation of the OPEC agreement, which, if carried through, will undoubtedly impact oil markets.” Dec. 2014

rise and safe haven buying ebbs. Agriculture prices are expected to increase 1.4 percent in 2017, slightly less than expected in July, as food prices are projected to climb more gradually than anticipated (1.5 percent) and beverage prices are seen dropping by a greater extent (0.6 percent) the expectation of a large coffee output. Among food prices, grain prices are forecast to rise a little steeper-than-anticipated 2.9 percent next year, while oil and meal prices are

“Low commodity prices hit commodity-exporting emerging and developing economies hard but now appear to have bottomed out,” said Ayhan Kose, Director of the World Bank's Development Prospects Group. “Growth in this group of economies is expected to be near zero for the year. Where feasible, policymakers should pursue growthenhancing strategies, such as investments in infrastructure, health, and education, in the context of a credible mediumterm fiscal plan.” This edition of the Commodity Markets Outlook contains a Special Focus analyzing OPEC's recent announcement of plans to limit production. Historically, agreements aimed at influencing the prices of commodities such as tin and coffee have succeeded in swaying markets for a time

but eventually lost that ability and collapsed. OPEC's ability to affect oil prices is likely to be tested by the expansion of oil supply from unconventional sources, including shale producers. The World Bank's Commodity Markets Outlook is published quarterly, in January, April, July and October. The report provides detailed market analysis for major commodity groups, including energy,

metals, agriculture, precious metals, and fertilizers. Price forecasts to 2025 for 46 commodities are presented along with historical price Source: WorldBank

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Energy Ghana Magazine

BUSINESS/INVESTMENT

Bill Gates Launches $1 Billion Breakthrough Energy Investment Fund

B

illionaire philanthropist and investor Bill Gates is launching a $1 billion fund, called Breakthrough Energy Ventures, to invest in new forms of clean energy. Gates has gathered a group of about 20 like-minded investors, including Silicon Valley venture capitalists John Doerr and Vinod Khosla, former hedge manager John Arnold, Amazon.com CEO Jeff Bezos, Bloomberg LP founder and former New York City mayor Mike Bloomberg, Alibaba founder Jack Ma, and a handful of others to join him in the fund. In a post on his Gates Notes

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blog, Gates said the fund will invest in “scientific breakthroughs that have the potential to deliver cheap and reliable clean energy to the world.” “We need affordable and reliable energy that doesn't emit greenhouse gas to power the future—and to get it, we need a different model for investing in good ideas and moving them from the lab to the market,” Gates said in his post. The announcement comes a year after the United Nations climate change talks in Paris, where Gates-unveiled the Breakthrough Energy Coalition a group of some 20 billionaire business leaders

from around the world, plus institutional investors, who committed to investing in new forms of energy. The coalition partnered with Mission Innovation, a group of 20 countries and the European Union that pledged to double their investment in clean energy research over five years. Gates explained that some of the members of the coalition are investing in energy on their own, and others have joined him in the new Breakthrough Energy Ventures Fund. The investors in Breakthrough Energy Ventures have a high tolerance for risk and are willing to wait longer than typical venture funds for a

return on their investment they're calling it a 20-year fund. The group has spelled out five “grand challenges” which it says are the biggest contributors to greenhouse gas emissions around the world: electricity, buildings, manufacturing, transportation and food. On its website, the group spells out more specific technologies within each of these challenges in what it calls the “The Landscape of Innovation." For transportation, areas to explore include high-energydensity gaseous fuel storage, high-efficiency thermal engines, and low greenhouse gas air transport.


Energy Ghana Magazine

Gates, the world's richest man according to FORBES, has been an investor in various forms of new energy over the years, as have venture capitalists Doerr and Khosla. Gates invested in Pacific Ethanol back in 2005, but reportedly reduced his investment three years later; he also invested in nuclear power firm TerraPower, which has been working on building a technology called a traveling wave reactor. Khosla's firm, Khosla Ventures, bet on biofuels, including a company called Kior, which had a technology that was designed to turn wood chips into a biofuel that could be refined; the company was reported to have filed for bankruptcy and was selling off assets in 2014. So far just a few of the clean energy investments have yielded technologies that are being more widely adopted or that have been financially very successful. That underlines the challenges this fund faces: it's not easy to select or develop successful new clean energy technologies. Yet Gates and others are optimistic that it's possible. On a media call with Bill Gates, John Doerr, Vinod Khosla and John Arnold, Gates and others mentioned that there are lessons to be learned from the past decade of investing in clean energy. Gates highlighted the need to fail fast and not spend vast sums on large factories or refineries that might not work. Khosla pointed out several successful investments in the sector, including smart thermostat firm Nest (which was acquired by Google for $3.2 billion in cash in 2014) energy efficiency firm Opower (which Oracle purchased for about $530 million in May 2016), and fuel cell firm Bloom energy, which Khosla said is worth "billions of dollars." Perhaps the most well-known clean tech company is electric car firm Tesla Motors, which now sports a market capitalization of $33 billion. If the Breakthrough Energy Ventures fund can back several companies like Tesla (in other sectors), that would be a win. Doerr said the fund will invest in both early stage companies and growth stage companies. Other investors in the fund include quite a few billionaire entrepreneurs: Virgin Group founder Richard Branson, Indian billionaire Mukesh Ambani, Saudi Arabian investor Prince Alwaleed bin Talal, hedge fund manager Ray Dalio, LinkedIn founder Reid Hoffman, U.K. hedge fund manager Chris Hohn, Facebook Co-founder Dustin Moskovitz and his wife Cari Tuna, Chinese real estate developers Zhang Xin and Pan Shiyi, French telecom tycoon Xavier Niel, South African mining magnate Patrice Motsepe, German software entrepreneur Hasso Plattner (cofounder of SAP), U.S. finance titan Julian Robertson and Japanese entrepreneur and telecom investor Masayoshi Son. In addition to the investors, Gates said that companies like Southern Co. and oil and gas company Total would serve as strategic partners that will help the fund figure out whether it's backing technologies that the industry will adopt. Source: Forbes

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SPECIAL REPORT/WOMEN IN PARLIAMENT

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Equity And Gender Balance

IN ENERGY POLICY MAKING; IS IT A MIRAGE OR A REALITY?

E

nergy is an important component in any productive venture. Hence the absence of energy affects all in productive capacity, even among the flora and fauna. Likewise, energy poverty negatively affects

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especially women who are traditionally managers of homes, households, and families. It is estimated that due to the energy poverty situation in the sub-region, women spend more than half of their productive time in search of a source of energy for food production, heating, and

water transportation for their household. According to United Nation Development Programme report in 2007, across the world, women and girls spend from 2 to 20 or more hours a week collecting fuelwood and other traditional energy sources. According to International

Energy Agency, within the West African sub-region, there is huge dependence on traditional biomass for household energy needs. This threatens the ecology and has negative implications for climate change policy making and sustainable forest management in the near to distant future.


eNERGY Ghana mAGAZINE Energy Ghana Magazine

The use of traditional biomass (wood, charcoal, dung) also have health implications for women and children who are the direct victims in such situations. According to World Health Organization and United Nation Development Programme report in 2009, it is estimated that 2 million deaths of women and children are attributed to indoor pollution generated by biomass and 85% of women and children suffering cancer and respiratory diseases are due to indoor pollution. Due to these, there has been a number of policy dialogue and strategies being proposed for implementation at local, national, regional and global levels to avert the situation. Ironically, women are virtually excluded from hard core decision making regarding energy policy and alternative energy sources for the future. It is also interesting to note that despite the fact that policies made would partly or wholly be implemented by women, yet they are not most of the times not part of policy design and

COUNTRY

implementation. This is not surprising because of the socio- economic and sociocultural environment of women all over the world and especially in Africa. According to a report on the situational analysis of Energy and Gender issues in Sub-Saharan Africa release last year, women continue to be seen outside of the decisionmaking circles and their human rights are often ignored in addressing energy access issues. This is reflected in the findings of the report on women representation in the legislature in several countries. It is refreshing to note that United Nation's General Secretary has collaborated with World Health Organization and United Nation's Foundation under the auspices of the Sustainable Energy for All Initiative to increase access to available modern forms of energy for women in health facilities and low and middle-income countries. This initiative is good, however, the scale of reach is small.

PERCENTAGE OF WOMEN REPRESENTATION IN PARLIAMENT

Senegal

l42.7%

Guinea

21.9%

Cape Verde

20.8%

Togo

17.6%

Guinea-Bissau

13.7%

Burkina Faso

13.3%

Niger

13.3%

Sierra Leone

12.4%

Liberia

11%

Ghana

10.9%

Mali

9.5%

Gambia

9.4%

Cote D'Ivoire

9.2%

Benin

8.4%

Nigeria

6.7%

Source: Inter-Parliamentary Union, 2015

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SPECIAL REPORT/WOMEN IN PARLIAMENT

Energy Ghana Magazine

Parliament of Ghana

T

he progress made towards these figures is very slow. In Africa, Rwanda has the highest representation of women in Parliament. This is very remarkable with 63.8% of lower House representatives as women and upper house members 38.3% of women. Liberia is the only country in Africa with a female president. These statistics speak volumes about the gender stereotyping in almost every endeavor in women's life. In putting together this article, a random sample interview of 50 men and 50 women on whether they think that a female can lead Ghana in our current political dispensation, the response was as follows; 79% of respondents think that women cannot be president of Ghana currently. 40% of the 79 %

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respondents believe that it is not possible, whiles 39% think that the evidence on the ground in the political landscape in Ghana makes their thinking legitimate. 21 % believe that it is possible but there have to be conscious efforts to make that possible, especially making a woman vice president, which is a step to the presidency. ENERGY AND GENDER The use of energy has gender dimensions that policy makers are oblivious of. Generally, women use energy for cooking, storage, drying food items, refrigeration and other food processing, before other secondary uses come. Men generally use energy for occupational related needs such as welding, engineering, operation of entertainment joints and others. This can basically be due to different needs of energy use, women

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usually bear the brand for gathering biomass materials, the effects of energy poverty on women is greater and the fact that women's access to productive resources such as land is minimal. According to study findings on Gender and Energy, even in career choice making, women are discouraged from taking jobs in the energy sector such as electrical engineers, electricians, and technical roles in the power sector. This trend is not only limited to the power sector, but also the oil and gas sector as well. In the oil and gas sector, technical jobs such as engineering, working in the rigs, construction of rigs and oil platforms and other technical roles, women are virtually missing. The bias in corporate practices such as recruitment is most of the times against women, this

severely impede women's access to the formal sector employment and especially access to technical roles in the energy sector. Besides, critical decisions concerning energy issues in the household are all taken by men in the family. Issues such as type of energy to be used, amount to spend on energy, type of energy device and technology, lighting priorities and ventilation in the household all rest on the men though the consequences of wrong decisions in these regards affect women more than men. At the highest levels of policy and decision making, it is worse. For instance United Nations Framework Convention on Climate Change does not include gender equality issues and women's representation among the delegation in its annual conferences.


eNERGYGhana Energy GhanaMagazine mAGAZINE

According to a white paper issued by the United Nations entitled Women at the Clean Energy Future, the trends of women employment and education level account for the low representation in policy making. The report indicated that women constitute 40% of global labour force, 43% of world agriculture labour force, and more than half of world university students. The energy policy making demands technical knowledge and appreciation of issues. And women have been absent in the policy space due to low levels of education, low employment in the formal sector as well. The gap in gender representation in policy making can be closed gradually if trends in education and employment continue to improve. Based on these, in 2012, mining countries launched an initiative dubbed Clean Energy Education and Women Empowerment. This project was aimed at attracting young women to pursue careers in the energy and extractive sectors. Countries implementing this initiative are Australia, Denmark, Mexico, Norway, South Africa, Sweden, the United Arab Emirates, the United States of America and the United Kingdom of Great Britain and Northern Ireland (UN Women, 2012). Likewise, Food and Agriculture Organization indicated that in closing gender gaps, agriculture would generate significant gains for the sector and for society. The findings further added that women's access to direct productive resources could result in corresponding increase in output from 2.5% to 4%. This is good but needs strong political will and commitment to implement by various governments. THERE IS LIGHT AT THE END OF THE TUNNEL There are many initiatives being put in place to reduce the imbalance in decision-making when it comes to gender inclusion, energy, policy making, agriculture, labour issues and issues affecting efforts at gender mainstreaming over the world. Some of these initiatives are in the right direction, however, sustainability, funding challenges and political will of governments, the corporation of relevant stakeholders, development practitioners, international communities and private individuals are difficult to be achieved. Some good policies worthy of commendation are § Many international agreements and commitments now call for integrating gender perspectives in climate change policies and programs, including the 2009 statement by the Committee on the Elimination of Discriminations against Women, the agreed conclusions of the 46th session (2002) and the resolutions of the 55th session (2011) of the Commission on the Status of Women. § In Kenya, Mali, Tanzania, and Senegal, the World Bank initiated a project named the Gender and Energy Programmes. This project has the Africa Renewal Energy Access programme incorporated. This project considers gender sensitive approach to energy policy making. § International Development Association financed hundreds of villages in the past few years. In Mali, a full gender and energy needs assessment has been carried out by the agency. Based on the findings, an action plan will be developed for training, knowledge sharing and capacity building activities for men and women in these rural communities. There is no doubt that the participation of women in policy-making, implementation and general planning would bring positive outcomes. These initiatives taken are good however, there is still more to be done by various governments to do more in terms of passing affirmative action laws, and implementing such laws. A shining example in Rwanda on high women representation in the legislature which is doing well. Women form an important component of our population and also play a key role in the value chain of policy making, excluding women is slowing down development outcomes. Credit: Munira Abubakari (Head, Monitoring & Outreach -ACEP) www.energyghana.com

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Energy Ghana Magazine

FEATURE/GAS FLARING

GAS FLARING, AN ENVIRONMENTAL IRRESPONSIBILITY OR AN ECONOMIC WASTE? INTRODUCTION as flaring is the burning of gas found in oil and gas reservoirs. Gas flaring in the oil and gas industry becomes necessary during refining of crude, manufacturing operations, commissioning of a well, start -up operations and during maintenance of oil and gas wells. Gas venting is the controlled release of gas production into the atmosphere in the course of oil and gas production. The gases normally vented include water vapour and hydrocarbon gases. Gas flaring and venting is an inevitable process that comes with the production of oil and gas. According to the World Bank, gas flaring is accepted under conditions such as technical, emergency and safety reasons. Russia is the leading country in the world that flares gas. Gas flaring used to be seen as an inconvenience but now seen as a resource if managed properly. Nigeria is the leading country in Africa and

G

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second country in the world that flares gas. In Africa, the rest of the countries that follows Nigeria are Algeria, Angola, Libya, Egypt and recently Ghana in a descending order. There are many challenges that come with gas flaring globally. Climate change is a major risk factor that comes with gas flaring. Fossil fuels such as oil, gas and coal produce greenhouse gases during production and consumption. Though there are other sources of greenhouse gas such as agriculture, land use, manufacturing, transportation and power generation, the world's population is increasing and the quest by various governments to industrialise complicate the issue of gas flaring which is a major source of greenhouse gas emission. The demand for energy would increase in 25years. Fossil fuel is projected to be the major source of energy supply. Despite other alternative sources of low carbon energy, fossil fuel is a preferred choice. This therefore

presents a significant challenge to many African economies still struggling to industrialise. CHALLENGES OF GAS FLARING There are a lot of challenges countries face in curbing the gas flaring and venting rate. Many countries do not have specific regulations internally addressing gas flaring and venting. Mostly they are found under sub-sections of petroleum and hydrocarbon laws. In other countries, it is in oil and gas production codes and guidelines. In some countries, they formulate policies instead of regulation hence the wide violations by international oil companies. There is little progress in an attempt at stopping gas flaring due to economic and technical challenges and regulatory deficiencies. Some of the impediments are the fact that oil wells are far away from target market or pipelines, hence flaring become the easiest and convenient option for oil companies. Gas cannot be easily stored or shipped like oil. It is either

transported through pipelines or converted to liquid before transportation. Technically, most construction of pipelines or gas collecting equipment is delayed making flaring difficult. The delays normally are as a result of financial constraints, late start of project or disruptions of the project by local community members where pipelines pass through. (Wendel Broere, 2008) In addition, most developing countries lack the financial and technical expertise to introduce a comprehensive monitoring for oil and gas production. In order to effectively monitor and control gas flaring and venting, it requires correct measurement of the amount of gas flared. Weak regulations affect in this regard the enforcement of regulations, especially in developing countries. Some oil companies are not transparent with correct records of gas flaring and venting. (World Bank, 2004) In less developed oil producing countries, there is an infrastructural deficit. This compounds the problem of stopping gas flaring or reducing it to the minimum.


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In such conditions it is easier and cheaper for companies to flare gas. It is also difficult to pump gas back into the wells. Pumping of gas back into reservoir has the potential of damaging reservoir. A lot of money is needed to repair damaged reservoir and most companies do not want to risk it. Oil wells are sometimes located far apart from each other and constructing pipelines to collect gas becomes very difficult especially if associated gas is not in commercial quantity. The cost of construction of gas infrastructure is very expensive and capital intensive venture. Governments in developing countries find it difficult to immediately put in place the needed infrastructure and equipment to utilise associated gas due to the cost. In the construction of gas pipelines and related gas collecting equipment, other difficulties that companies and governments encounter in the construction of gas facilities include local communities' issues and land compensation which all delay projects (Wendel Broere, 2008). According World Bank Technical report on gas, currently, global gas flaring and venting stands at 150170billion cubic metres per year. This is equivalent to 5% of the global natural market (World Bank, 2008). Africa flares about 35billion cubic metres of gas equivalent to 12,000 megawatts of

electricity for the continent. (Verma Somit, 2008) Gas flared in Africa is estimated to be equal to half of the continent's power consumption (Park Paul, 2008). It is estimated that developing countries constitute 85% of gas flaring and venting. Africa has 4 of the top 10 countries that flared gas namely Nigeria, Algeria Libya and Angola. This has been attributed to unclear operational processes and regulatory procedures (Smith L, 2012). Every year, the energy industry flares off one-third of Europe's natural gas consumption releasing 400 million tonnes of carbon dioxide into the atmosphere representing 1.5% of the world's emission (Wendel Broere, 2008). 140 billion cubic metre of natural gas is flared each year .This is about 30% of European Union's annual gas consumption. Natural gas emission results in about 350 million tonnes of the carbon dioxide. (The World Bank Group, 2013) International oil companies are reluctant to invest resources in associated gas utilization projects unless the host government provide the enabling environment to enhance their economic viability. Host government is responsible for establishing the enabling environment through legislation, regulation and market measure. Individual government policies will be an added advantage after regulations in both upstream and downstream are made (World Bank, 2008).

REGULATION ON GAS FLARING There are international regulations governing gas flaring worldwide. However, with individual countries, gas flaring regulations falls under laws and codes of conduct for operations. Countries do not have separate agencies monitoring gas flaring. Canada is the only country that has a separate institution monitoring gas flaring, called Alberta Energy Regulator. The kind of fiscal systems adopted by countries affect their ability to regulate gas flaring. Gas flaring is basically regulated through fiscal methods such as penalties and incentives. Penalties raise the cost of gas flaring and incentives to raise the cost after tax in gas gathering. These are geared towards discouraging flaring to encouraging utilization. Contractual frameworks of gas flaring regulations are supposed to be spelt out in petroleum contracts signed on what to do with associated gas (World Bank, 2003). Regulatory Procedures regarding gas flaring include measuring and reporting the amount of gas flared, application and approval of authorities to flare gas and monitoring and enforcing of regulations on gas flaring. (World Bank, 2014) The Global Gas flaring Strategy developed is an initiative by World Bank to support national governments in an effort to reduce gas flaring and venting. Oil rich countries, oil companies and multi-lateral organisations all

made the commitment to make the initiative effective. It was signed by 150 nations in 1997. The World Bank's global gas flaring partnership was launched at the world summit on sustainable development in Johannesburg in 2002. (World Bank Group, 2011) In addition, the Kyoto Protocol introduced under the clean development mechanism, allows projects in developing countries generate emission credits which can be marketed against a developed countries emission. This carbon trading mechanism aimed at reducing flaring and venting. Countries and companies buy carbon credits. Monies generated is used for removal of existing carbon dioxide through tree planting, reduction of future emission through replacing fossil fuel generation. This is similar to the polluter pay principle. Emission trading is a mechanism instituted to aid participants to meet emission trading targets. Participants can buy units to cover any emission above their targets or sell units if they reduce their emission below targets. There is an emission market created to ensure a smooth transaction. (IEA, 2014) The market regulations also aimed at reducing gas flaring include allowing international oil companies to monetise associated gas, or utilise gas for electricity generation for usage or export, fair pricing of energy to encourage companies to sell the processed gas to host countries.

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Energy Ghana Magazine

FEATURE/GAS FLARING

CLIMATE CHANGE IMPLICATIONS OF GAS FLARING AND CARBON EMISSIONS Climate change is the gradual change in weather indicators such as rainfall, rainstorm temperature and drought to the extreme conditions over a long period of time due to the effects of chlorofluorocarbons. A great concern for climate change is global warming: a situation where the earth temperature increases causing melting of ice and associated floods in other parts of the globe. (EPA, 2014) A major source of greenhouse gas emission is through production and consumption of fossil fuels. According to International Energy Agency (IEA), fossil fuel accounts for 82% of

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global energy mix and it has remained so for the last 25 years. Though renewables are increasing, it is projected to reduce this figure to 75% in 2035. The decarbonising power system is a huge task for countries and companies in the energy business (IEA, 2014). The estimated figure for carbon dioxide emission is 825 million tonnes a year in Africa (Park Paul J, 2008). The Environmental Protection Agency (EPA) estimated that global methane emissions from oil and gas industry is 1,354million metric tonnes in 2010 representing 20% of global emissions There are a lot of health hazards associated with gas flaring. Some of them include but not limited to acid rain, crop failure, water pollution,

decline in population plant and animal species, infiltration of toxins into soil, water and plants. Human beings are at risk of developing cancers, skin diseases and spontaneous abortions (Business and Financial Times, 2014). According to International Energy Agency report on global energy policy, projections made for stopping emissions growth by 2020 are ; partial removal of subsidies on fossil fuel, implement selected energy efficiency policies , reduce methane release from upstream oil and gas and limitation on use of inefficient coal power plant (Vander Hoven M, 2013) The United Nation Convention on Climate Change enjoins countries to

honour their pledge in reducing carbon emissions by lowering emissions on supply through switching from fossil fuel to clean energy or renewables or deploying carbon capture and storage. Alternatively, emissions can be reduced on consumption side by reducing consumption of fossil fuels (IEA, 2014). Currently, parties to climate change conventions and Kyoto protocol are meeting at Lima Peru to discuss emissions control from 2nd to 12th Dec 2014. Participants are about 10,000 including government agencies and nongovernmental organisations. Developing countries claimed negotiators have ignored their issues as nonindustrial economies. (IEA, 2014)


Energy Ghana Magazine

OPTIONS AVAILABLE TO GAS FLARING There are many alternatives to gas flaring and venting developing countries can consider getting the maximum benefits from oil and gas production. The following are alternatives that avoid gas flaring and venting. A viable option is investing in gas infrastructure such as pipelines to transport gas to ready market. Chevron Nigeria and other stakeholders initiated the West African Gas Pipeline project. It is at a cost $590 million dollars. It is aimed at reducing greenhouse gas emissions by 86million tonnes in 20years (Chevron, 2014) Host nations should make regulations clear allowing oil companies to re-inject associated gas into aquifers. Chevron Australia limited, in line with global gas flaring strategy, has initiated a project which extracts carbon dioxide from natural gas and reinjects it into a sand stone reservoir more than 1.5 miles (2.5km) below the sand barrow. At the end of the project, it targets to reinject 120million tonnes of carbon dioxide (Chevron, 2014). Another viable option is the collection and delivery into nearby gas systems. The Iranian company in line with the global gas flaring reduction strategy initiated a natural gas liquid acid gas treatment project. The project is designed to collect gas from different oil platforms such as Abozar, Nowrooz and Sorooz into a gas recovery system. The gas is treated to remove methane and reinjection of acid gas while exporting and utilizing natural gas liquids. With the production of an estimated figure of 450, 000billion barrels of crude oil a day, it expected to collect and treat 600 million standard cubic feet of gas daily (Global Gas

Flaring Reduction Forum, 2012) Angola initiated a Liquefied Natural gas project costing 4.5billion dollars. The project collects associated gas from 20 offshore oil fields to a new 5 million dollar tonnes per year liquefied natural gas plant. This project aims to reduce associated gas by about 7 billion cubic metres per year with a potential reduction of 32 million tons of carbon dioxide emissions yearly (Verma Somit, 2008). Oil companies in Jonah, United States invested in micro turbine electricity generator. It is capable of standalone on grid power generation. It utilises associated gas which would have been flared or vented. RECOMMENDATIONS The fast developing countries lack the infrastructure to

utilize associated gas and the fact that energy generation does not meet demand, it is imperative for African oil producing countries to prioritise formulations of strong regulation in petroleum contracts or independent regulations in production and exploration and exploration laws in oil and gas industry to using incentives to encourage international oil companies to invest in infrastructure that would utilise associated gas, or put in place policies that would guarantee ready market for processed gas, or better still allow companies to process and export associated gas. Companies coming in who already have signed to the World Bank's initiative on global gas flaring reduction strategy should be given attention in the bidding process for oil contracts.

Countries have the obligations to honour their pledge on United Nations framework conventions on Climate change which enjoins them to reduce carbon emission. Adoption of alternatives to gas flaring as mentioned in this study should be a binding factor on both parties. On the part of oil-rich developing countries, a company's association with this World Bank's initiative on reduction of gas flaring and their willing process to utilise associated gas should be a key factor in awarding oil contracts or blocks to companies whether it is an open competitive bidding process or direct negotiation. Source: Energy Ghana

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Energy Ghana Magazine

CSR/UPSTREAM

Corporate Social Responsibility in Ghana's Upstream Oil and Gas Industry Introduction n the global milieu, there is a perception that corporate social responsibility (CSR) is an important tool for building a brand or reputation. Also, the nexus of profitability and reputation has engendered an expectation that CSR will enhance profitability. Contextually, firms operating in Ghana undertake their CSR initiatives on account of the foregoing. As a consequence, CSR initiatives in the country are fundamentally viewed as the decisions of strategic nature taken by corporate entities to voluntarily tackle the social conditions which have the potential to hamper the accomplishment of their corporate goals. CSR may therefore be regarded as nongovernmental interventions for addressing some of the developmental challenges confronting the country. Primarily, the preponderance of CSR initiatives, with regards to frequency and magnitude of social investments, are done by the telecommunication companies, banking institutions, and companies in the extractive industries such as mining and oil and gas. Another school of thought claims that corporate social responsibility (CSR) is a business approach that contributes to sustainable development by delivering economic, social and environmental benefits for all stakeholders. Admittedly, CSR is a concept with many definitions and practices.

I

Focus of CSR Initiatives in Ghana It is interesting to observe that most of the companies

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that engage in CSR initiatives in Ghana tend to be foreignowned. Considering the current developmental issues, CSR initiatives have a tendency to focus on education, health, environment, social entrepreneurship, and sports development. Further noticeable CSR initiatives can be found in education, mining communities, sports, and coastal communities contiguous to the offshore oil and gas production facilities. Nonetheless, there is a dearth of empirical evidence on the relationship between CSR and corporate financial performance in the Ghanaian context. View of the World Business Council on Sustainable Development In the bid by the World Business Council on Sustainable Development to find out what corporate social responsibility (CSR) means, different countries focused on a variety of issues. For instance, Thailand stressed issues on the environment, while Ghana stressed on empowering communities. Similarly, the ethical concerns of business managers differ among nations, while managers in conglomerates grapple with opposing expectations of their head and local offices. These differences show how difficult it is to agree on a universal definition of CSR; particularly, in the light of emerging initiatives in the global arena on the same issue. Further, it is moot whether CSR is voluntary or formally regulated; considering the fact that the latter has

historically been used to govern businesses. the broad idea of 'voluntary' mechanisms to regulate business behaviour is winning support from policy-makers in national governments and intergovernmental organizations, underpinned by the assumption that firms are capable of policing themselves in the absence of binding international and national law to regulate corporate behaviour. The European Commission's Green Paper of July 2001 defined CSR as 'a concept where Nonetheless, the broad idea of using 'voluntary' mechanisms to regulate business behaviour is winning support from policy-makers in national governments and intergovernmental organizations, underpinned by the assumption that firms are capable of policing themselves in the absence of binding international and national law to regulate corporate behaviour. CSR initiatives in the Upstream Oil and Gas Industry In Ghana's upstream oil and gas industry, CSR has been a very important issue. While not knowing the rationale behind the various CSR initiatives, it could be inferred in some cases that this is done on moral grounds of 'giving something back' to the society. As far back as 2009, before the first oil, a series of management plans were put in place to assuage the environmental and social impacts of the Jubilee Field project. These included a CSR Management Plan;

further accentuating the importance of CSR. · Tullow Oil Plc Corporate Social Responsibility Projects Tullow Oil, the operator of the Jubilee Oilfield in Ghana

has undertaken a number of CSR projects in Ghana, particularly in the Western Region, the hub of the emerging upstream oil and gas industry in the country. Some of these projects have been undertaken with other Jubilee partners. Some projects are: § Enterprise Development Centre The Jubilee Partners invested $600,000 in 2013 and committed $5 million in total to the Government- led Enterprise Development Centre (EDC) in Takoradi. The Centre supports small and medium-sized Ghanaian enterprises to better position themselves to take advantage of business opportunities within the Oil & Gas industry. The EDC offers a range of services including business training, advisory services and access to information about local markets.


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§ The Jubilee Technical Training Centre In 2013, the Jubilee Partners invested over $5 million in the Jubilee Technical Training Centre (JTTC), located at the Takoradi Polytechnic. The Centre is the first vocational training polytechnic in West Africa to offer National Vocational Qualification (NVQ) accredited courses in technical subjects such as instrumentation process,mechanical and electrical engineering. The Jubilee Partners invested in the construction of the Centre, including the provision of the latest engineering equipment and training of instructors. It was officially opened by the Minister for Education, Hon. Professor Jane Naana OpokuAgyemang. The Centre ran a pilot programme for 32 students in 2013, and a further 16 students studied courses in 2014. In addition to hands-on technical training courses, the Centre offers Health & Safety training subjects including exploration geophysics, Oil & Gas management, law and environment science, supply chain management, petroleum taxation and finance, geographic information systems and international public health.

management, entrepreneurship development, soap making and oven and ice box construction. The sessions were open to fishermen, fishmongers and processors, artisans and members of the business community. Participants have ongoing access to the Business Resource Centre, which assists people by linking them to credit facilities, access to loans, and other business support.

§ Tullow Group Scholarship Scheme In 2013, Tullow invested $6.7 million in their flagship programme, the Tullow Group Scholarship Scheme. This programme offers students an opportunity to study post-graduate courses at internationally recognised Universities in the UK, France and Ireland. Over 100 students from Ghana, Uganda, Kenya, Mauritania, Côte d'Ivoire, Gabon,

Suriname and Ethiopia began their studies in subjects including exploration geophysics, Oil & Gas management, law and environment science, supply chain management, petroleum taxation and finance, geographic information systems and international public health.

Picture source: graphicgh.com

§ Livelihood Enhancement Programme – Ghana In the Western Region of Ghana, Tullow sponsored over 1,400 people from 26 fishing communities to receive training from the Jubilee Livelihood Enhancement and Enterprise Development (LEED) project, one of the Social Investment projects being managed by Tullow on behalf of the Jubilee Partners in partnership with a local NGO, Pyxera Global. The weeklong training covered subjects such as strategic business

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CSR/UPSTREAM

§ National Services Programme With the support of the National Service Secretariat, GNPC coordinates the National Service Programme among the international oil and gas companies, subcontractors, and local

Energy Ghana Magazine

said that the programme follows the "contrarian thinking and entrepreneurial spirit" that helped Kosmos to get to where it is today. The only difference, he noted was that KIC will be the "angel investor who supports someone else's dream and in the process hope to play a role in solving some of Ghana's most pressing developmental challenges."

service companies operating in the petroleum industry. This has helped a lot more Ghanaians gain employment with many of the companies operating in Ghana. Kosmos Energy launches Kosmos Innovation Centre On March 16, 2015, oil giant Kosmos Energy launched its

new flagship corporate social investment programme dubbed the Kosmos Innovation Centre (KIC).The Centre will in many ways rekindle a new entrepreneurial spirit in Ghana's youth and will adopt innovative means to solve some of the greatest challenges facing the country. Under the theme: "Investing in Ghana's future, one entrepreneur at a time", KIC promises a well-oiled, thoroughly coordinated programme that will positively affect each sector of the country's economy. At a simple yet grand launch at the Movenpick Hotel in Accra, the Country Director of Kosmos, Mr. Joe Mensah

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How will this dream manifest? Mr. Mensah said the KIC will use innovation and apply commercial solutions to Ghana's existing social and economic challenges by using market based approach that facilitates private sector enterprise and entrepreneurship. "This initiative is a marked departure from the traditional approach to corporate social

responsibility," he said. According to Mr. Mensah, the programme will use a threeprong approach collaboration, incubation and acceleration- to drive change and get the necessary results. Explaining the three different approaches, the country manager said as part of the collaboration, KIC will foster partnerships to tackle challenges together.

KIC will bring together the best and brightest minds from a range of fields, such as business technology finance and academia to talk through issues encountered in a selected sector of the economy.


Energy Ghana Magazine

Headline Sponsor of the Black Stars On 4th January 2013, the Ghana National Petroleum Corporation announced to the general public that after several months of consultations, it has concretised its decision to be the Headline Sponsor of the Black Stars to the tune of USD 3million each year. The duration of the sponsorship is between 3-5 years, subject to annual renewal. To ensure that this relationship becomes very successful, the two institutions have agreed to the following; · Operate a joint account called The Black Stars Trust

with signatories from both institutions · Form a six (6) member Joint Implementation Committee (JIC) (with three representatives from GNPC and three members of GFA) to oversee and ensure the smooth running of activities and furnishing both parties with reports the unifying potential of football cannot be over emphasized. This is manifested in the way the whole country virtually comes to a standstill any time the Black Stars engage in an international assignment. Simply put, football is a unifying force to reckon with, and GNPC is of the opinion that supporting the Black Stars is also a way of contributing to national unity and harmony, considering the fact that a happy nation is a wealthy nation. GNPC is very proud to be part of this feat.

A Challenge Faced by the Fishermen near the Rig in the Jubilee Oilfield The fishermen operating in the vicinity of the rig in the Jubilee Oilfield are confronted with one major challenge. There is a migration of fish towards the rig, due to the attraction by the intense light on the rig. The fishermen complain about the significant drop in their catch, as they have to

between the Navy and the fishermen, with regards to fishing within the specified no-go area. It is hoped that the Jubilee Partners will, through the vehicle of CSR, find a solution to a potential conflict between the fishermen and the Jubilee Partners. Credit: Dr. Joe Asamoah

keep off a radius of five hundred metres from the rig. There appears to be a turf war

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Energy Ghana Magazine

OPINION/RENEWABLE VRS COAL

Why The Government's Plans For Coal Must Be Replaced By A Renewable Energy Alternative

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n the abundance of free sunlight over 600 million people live in darkness in Africa. Technological advancements in producing energy through renewable sources, especially solar and wind, presents the best opportunity for the private sector in Africa to produce and sell energy directly to the residential and commercial clients using the distributed model. The distributed model is when the equipment using the renewable resource for power generation is installed at the place of use. In a home, for instance, solar can be installed to power all the energy needs. A program which will support the private sector to take off

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rapidly with solar energy installation will not only create thousands of jobs, it will be a direct solution to the chronic power crisis in Ghana and by extension Africa. Unfortunately, the Ghana Government is opting for the installation of a coal based thermal plant for power generation. Here are eight reasons why the government's plans for coal must be replaced by a renewable energy alternative. Capacity In terms of capacity the coal plant is estimated to generate 700MW for 1.5 Billion USD invested. Experts using a conservative approach

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concluded that a renewable energy alternative will generate 1000MW. That is 300MW more than the coal alternative. It is extremely important to clarify here that after the expenditure of 1.5 Billion USD to build coal, there is the recurring expenditure on the purchase of coal. But with the renewable energy alternative there are no additional resource expenditures because the sun and the wind are free. It is understandable that this decision to produce energy through coal was made about 2 or 3 years ago. Within that same period the cost of generating energy through renewables, especially solar, has dropped by over 50%. It is therefore not too late to change course. Possible impact on the environment The environmental report on the coal project states and I quote, “The possible impacts on terrestrial ecology are identified to affect air quality, ambient noise, solid waste, generation of hazardous material, vibration, waste disposal and health and safety issues, as well as social and economic impact. The potential impacts on the marine ecology include seawater temperature

changes, seawater pollution, and noise pollution.” This is because of the process of drawing seawater, desalinating it and boiling to produce steam for the turbines. The renewable energy alternative presents no such hazards. Project Duration The construction of the coal thermal plant is estimated to take four years. As they say in economics, that is all things being equal. It does not take this long to implement a renewable energy alternative using a distributed model. Using the distributed model, 100MW will be completed in the first year, 200MW in the second year, 300MW in the third year and 400MW in the fourth year. Note carefully that the initial 100MW will be generating revenue after the first year. The 200MW will also be generating energy in the second year and so on. The fact that the renewable energy approach takes a shorter time to install and generate much-needed electricity is a great reason to adopt this alternative. Resource for powering plant The coal plant will incur additional expenditure of expensive maintenance and continuous purchase of coal. The renewable energy alternative requires little maintenance and free resource being the sun and the wind mainly.


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Jobs created and skills obtained The number jobs to be created for Ghanaians working to build the coal plant and maintain it is estimated at 500. Compare it to ten times that number for

distributed model. These are the people who will transform our economy.

the renewable energy alternative. Over ďŹ ve thousand jobs will be created under the renewable energy alternative using the distributed model. The distributed model is when companies are licensed to install and collect revenue from individual residential and commercial installations. This particular point is extremely crucial knowing that what we need most in this country are a vibrant group of entrepreneurs with a dierent paradigm, a new and fresh perspective of doing business. These renewable energy entrepreneurs will be created through the

in the generation of energy through coal attached to the project, there will not be much technological growth after the coal plant construction. But the renewable energy alternative presents unlimited potential because we have not even scratched the surface of the technologies involved. In Finland, the act of cutting trees with axes led to the country that is known for manufacturing cells phones. Fuel won the technological race between using fuel or batteries to power cars. Due to research in renewable energy, batteries are roaring back. That is how

Technological growth Unless there are special plans for research and development

advancements in technology take place. I see a future and it is here already, where renewable energy is used for irrigation, batteries power our cars and renewables are used for food processing. The renewable alternative can reach remote areas which the grid has not even reached. The grid is therefore not required in the renewable energy alternative. This is the greatest opportunity for Africa. Africa can leapfrog the process of spending millions of dollars in building ineďŹƒcient grids with transformers and pylons and its continuous maintenance. We can use the renewables for irrigation in very remote areas. The irrigation can allow farmers

private sector who will rather pay taxes including income tax on workers. This part needs further explanation because this is the main reason why people complain that renewable energy, example solar, is expensive. Solar is expensive because we do not have the mechanism to pay monthly. In Ghana, one usually has to to pay cash for solar energy installation. The West never gained accessibility to solar by asking people to pay cash. In the United States, the United Kingdom and the rest of Europe, all one has to do to get solar installed is to pick the phone and call the solar company. They will install the solar system and it is paid

to farm all year round and alleviate poverty. This opportunity is huge.

for monthly just like any other bill. Just like electricity is paid for to the Electricity Company of Ghana (ECG). In essence, the 1.5 billion USD would be used to set up a fund managed by the banks and allow everybody to borrow from to buy an energy solution based on renewables. It will be the best fund set up because it will be backed by reliable and needed assets.

Finance With the coal plant, the government or the Volta River Authority (VRA) needs to secure a loan for its construction. This will be on the balance sheet of VRA. There will be no need for the government to borrow one cent under a renewable energy alternative. The most the government will need to do is issue a sovereign guarantee. The loans for renewable energy will be taken by the

Credit : Dr. Kobina Nyanteh (CEO, Translight Solar Limited)

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Energy Ghana Magazine

FEATURE/OPEC MATTERS

The Signs To Watch In The Oil Market

To Determine If The OPEC Agreement Is Actually Working

T

he days before OPEC's meeting in Vienna, comments suggesting difficulty reaching an agreement sent prices down nearly $3 a barrel; the announcement of an agreement immediately sent prices up nearly $3 a barrel, and as at now they remain above $50, some are warning of a climb-down. People who are not familiar with commodity markets must surely think that traders have the attention span of goldfish. But the reality is that while daily price moves do indeed tend to overreact to news, but frankly they are not that important except to some

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traders. Naturally, news will change prices because those trading on the instant reacts to current events (and rumored events) rather than continuing to rely on monthly oil market forecasts. Now that an agreement has been reached between OPEC producers and some nonOPEC countries (Azerbaijan, Kazakhstan, Mexico, Oman and Russia), and Saudi Arabia has stated that it will cut production slightly below the earlier pledged level, the market will be certainly firm further. After that, expect careful monitoring of compliance and reaction to either glimmer off evidence

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of either strict observance or leakage. It does not help that two nations, Azerbaijan and Mexico, are essentially donating supply cuts according to anticipated natural decline in production, which means that there will not be any actual news to report, as there will be when tanker traffic at Ras Tanura drops off. Also, reporting from Russia should be all but completely discounted given that Russia is the Saudi Arabia of fake news. Instead, look for customers to state whether their volumes are being cut or not.

Of course, individual reports of oil deliveries being reduced are of limited value, since there is always the potential for oil to simply be diverted to other customers (especially ones that can be expected to keep their mouths shut) or sold on the spot market. Some producers (hint-Iran) might maintain production but put some of the output into storage. It will not be for several months before there is reasonably reliable data as to the level of compliance, but here are some ways to judge beforehand.


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some clarity as to demand levels. Also, at this point, if prices have firmed well above $50, it's likely that leakage will occur, especially the nonGulf producers but also whether Iranian production has been able to rise above agreed-upon levels, Venezuela has used the increased revenue to restore some shut-in supply, and if Russia shows signs of backsliding.

First, the big producers matter far more than the small ones. Oman's pledge to reduce production by 40 tb/d is pretty much noise in the system. Whether or not they will cut be hard to tell, because that much oil amounts to one supertanker load a month, and it is hard to know when an extra tanker at the end of the month represents overproduction or just a delayed delivery from the earlier month. Watch Iraq and Saudi Arabia in particular, but also whether or not Iran manages to ramp up beyond what is permitted; it would have difficulty doing so, but if it did, or shipped oil now in storage. Next, watch the contango in the market. It has been increasing of late (figure below) suggesting that storage is growing, or at least the gap between actual and desired storage is growing. This is probably the earliest indicator of the actual market balance but can be influenced by misinformed expectations. For example, buyers think the production cuts are experiencing heavy compliance and so their desired storage increases. Tanker rates can be a useful indicator, although they are not as clearly transparent. If VLCC rates go up, it implies that either someone is planning to store oil (such as an OPEC member that agreed to cut production but instead is cutting exports), or that shipments are not dropping (or both). If they decline, it is a bullish sign for prices, meaning less oil is being shipped, especially from the Arabian/Persian Gulf. The same thing holds for tankers on the Baltic market: the Russians are unlikely to

reduce crude shipped by pipeline, so Black Sea tanker rates should hold up. By late December, there should be reports from customers about volumes being offered (or not), and this should clearly show cuts from Kuwait, Saudi Arabia and the U.A.E. However, the contributions of Iraq and Russia are less certain, and traders will be parsing whatever information they can get for evidence of either compliance or cheating. Mid-January will see early estimates of production levels which will appear from private sources (consultants, trade press, etc.) but these will be highly uncertain. Comments from OPEC ministers, especially al-Falih of Saudi Arabia, about their

perception of compliance and price levels. Hints and rumors will move prices more than hard data at this point. Production estimates should be more firm by late January and a price trend will firm up. If compliance appears spotty, prices will drift down towards $45, whereas if Iraq and Russia in particular show firm adherence, prices could threaten to breach $60. At the same time, drilling in the U.S. Southwest shale basins might be rising sharply which would give pause to the Saudis, suggesting that they might need to encourage prices to drop.

Ultimately, the price will depend on the Saudi view of whether or not markets are balancing and, if they are not if the reasons reflect temporary effects such as recession or more fundamental problems like rising U.S. shale oil production. If the only concern is non-compliance to quotas, expect another round of weak prices followed by new negotiations and stronger threats from the Saudis to other producers to comply or suffer from low prices. Recall 1998, when repeated warnings from Saudi Arabia to the other producers, nearly all of whom were over quota, but especially Venezuela, were not heeded and the Saudis were forced to retaliate, bringing prices down to $12. That level might not be seen again, but $30 remains a possibility if a new price war breaks out.

Credit : Michael Lynch

By February, whether or not Trump's election victory is threatening to trigger an economic slowdown should become clear, and provide

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Energy Ghana Magazine

COVER STORY

POWERING GHANA IN 2017 TIME TO DEAL WITH THE TRIPPLE F'S (FUEL,FINANCE & FLIP-FLOPS)

Introduction nergy is the life blood of every economy. This is because the means of production and transformation of primary goods to finished goods and the provision of services are anchored on energy. With regards to petroleum, the sector has contributed 7.5% annually to government revenues from 2010 to 2015 and has the potential to contribute more. This implies that the challenges and success of the power and petroleum sectors should be the concern of every government. This article provides a brief overview of the power and petroleum

E

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sectors and provides pointers to the main challenges in the sector as well as recommendations to the new government. 1. Petroleum Sector –Upstream The outlook for oil output is positive going into 2017 as oil production could increase to between 180,000 – 200,000 bpd by the last quarter of 2017. This will be realized from the following: i. The commencement of oil production in the TEN fields in 2016 and the plan to increase production to 60,000 bpd in 2017; ii. The plan and completion to permanently moor the FPSO

Kwame Nkrumah, which is expected to commence in April for a period of 3months, will ensure jubilee production recovers before the end of 2017; iii. Sankofa – Gye Nyame fields will also start oil production in the first quarter of 2017 with about 45,000 bpd. Based on existing fields and field development plans, crude oil production is estimated to reach 250,000 bpd by 2019, making Ghana the fourth largest producer in Africa. There is no certainty about when the HESS discovery will be developed, but Kosmos Energy plans to

connect the Mahogany-TeakAkasa (MTA) field to the Jubilee oil production ship. In the short term, the government will need to develop regulations for the Exploration and Production Law and implement the competitive bid or auction policy in the award of new petroleum contracts. There should be a national strategy for the expenditure of oil revenues which should be directed at pro-poor sectors such as agriculture, education and health. For instance, Oil Investments in Agriculture Strategy with clear timeliness, monitoring schemes and investment expectations.


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2. Petroleum Sector – Mid and Downstream The mid and downstream sector cover petroleum value addition (refining), petroleum prices, and the relationship between government and the Bulk Distribution Companies (BDCs) and the Oil Marketing Companies (OMCs). The government should account for the TOR debt recovery levy, invest in the efficiency of TOR, abolish some taxes such as BOST margin, TOR debt recovery levy to drive prices down and set the sulphur content of imported fuel at 10ppm. 3. Electricity Demand Sector Even though supply was relatively stable in 2016 (as compared to 2015), the government relied heavily on emergency plants and 'sole sourced power contracts' which are relatively expensive and translate into higher tariffs. By June 2015 the following short term and emergency solutions were lined up: i. 220MW Kpone Thermal Power Project (KTPP); ii. 110MW Tico Expansion Project; iii. 180MW first half of Asogli 360MW Phase 2 Project; iv. VRA TT2PP (38 MW) expansion project. v. 225MW Karpower ship which is an IPP project; vi. 250MW Ameri Project in Takoradi, under Build Own Operate and Transfer (B.O.O.T) vii. 370MW AKSA Project (Commercial Contract approved by Parliament), which is an Emergency Power Agreement (EPA) viii. 110MW TEI project (Commercial project approved by Parliament), which is an Emergency Power Agreement (EPA) Project for 4 years with option to negotiate a further

Electricity Price 2015

le stab s Un ply y a D p 150 wer Su Po

26.52% 2014

168

41

07G W low h er

201 201 4 5

SUMMARY GDP Reduction

Transmission Losses

(>2%)

0.88% Generation Losses Reduces

6.45% Figure 1 compares the power sector performance for 2014 and 2015.

term with ECG; and ix. 300MW GE Early Power Project which is also an Emergency Power Agreement (EPA) Project. All these proposed plants (totaling 1800MW) had expected a delivery period of between 3- 6 months from July 2015. Seven (7) months on, the addition to the Grid stand at 585MW consisting of 225MW Karpower ship, 250MW Ameri plant and 110MW Tico Expansion. This brings total available generation capacity to

1900MW according to the Energy Commission. The demand projections for the country have been so unreliable. According to the Energy Commission, Ghana's actual peak load and the total system peak on the grid transmission system in 2014 were 1,970 MW and 2,061 MW respectively. With an estimated growth of between 10% and 12%, the total peak load for 2016 should have been about 2400MW on the average. On the contrary, the system peak for the third

quarter of 2016 averages 1,700MW. This is unrealistic and defies logic as consumption could not possibly decline by such a huge margin of 700MW. The insufficient power generation, inadequate supply of natural gas and light crude oil, numerous taxes (including VAT) especially on the electricity tariff of the commercial sector and expensive generation choices translated into the load shedding and higher tariffs. The high electricity tariffs have also contributed to the suppression of demand. The average tariff for domestic consumers today is 19Cents/kwh and that of industrial average is 50 Cents/kwh. This has affected economic growth projections for 2016. Another major challenge is the debt of VRA, ECG and GRIDCO. As at November 2016, VRA alone owed about $1.5 Billion. This also threatens the financial viability of the of the power sector. The government needs to tackle: (I) Financial challenges of the power sector (ii) The fuel security challenges especially Nigeria Gas (iii) Conscious effort to invest in renewables (iv) Encourage private investments in renewables through competitive bidding, implementation of the net metering policy, and other economic incentives In a nutshell, the wheels have been built but seem old. The new government will have to oil these wheels with financial investments, proper accountability, and transparency in both the power and petroleum sectors. Credit: Dr. Ishmael Ackah (Head, Policy Unit, ACEP)

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COMPANY PROFILE/PALISADE

Energy Ghana Magazine

Industry Leading Forecasting and Risk

Modelling Software-

Within Your Excel Spreadsheet

TRUSTED SOURCE FOR RISK AND DECISION ANALYSIS USED BY 93% OF THE FORTUNE GLOBAL 100 THE

SINCE 1984

P

Palisade EMEA 31 The Green, West Drayton, UB77PN, UK sales@palisade.com www.palisade.com

alisade are the makers of @RISK and the Decision Tools Suite. They are a leading provider of risk and decision analysis solutions to the top businesses, governments, and academic institutions across the globe. This is conrmed by the fact that 93% of Fortune 100 companies and over 40,000 MBA students annually, use Palisade software. The methodologies of ‘smarter’ decision making are becoming increasingly important in the competitive modern business environment – where businesses can no longer afford to make decisions which leave money on the table, or fail to consider risks and uncertainty. The solutions are the difference between organisations making guesses, and taking control – and they turn the art of decision-making into a science that works for the user.

Palisade in Ghana Palisade touched down in Ghana for the rst time in November to host a seminar at the African Regent Hotel in Accra, entitled Quantitative Estimation, Risk Analysis, and Decision Making Under Uncertainty. There was a strong calibre of speakers, consisting of Professors and Doctors with agricultural, economic, and Oil & Gas backgrounds, who use Palisade’s tools and methodologies. There were also presentations by Palisade representatives and demonstrations of the Software. Palisade Customers Palisade software products that make up the Decision Tools Suite, can be applied to any decisionor process, and are specially designed to operate seamlessly within the familiar and exible environment of Microsoft Excel and Project. As a result the company has a proven track record of supporting clients across a vast array of industries including: Oil & Gas; Utilities; Mining;Government; I n s u r a n c e / A c t u a r i a l ; Finance/Banking;Defense; Pharmaceutical; M a n u f a c t u r e r s ; T e l e c o m s ; Academic/Research, among others. Since its incorporation in 1984 and the rst sale to Harvard University, USA, Palisade now has customers across 94 countries, and software in eight different languages. The world’s leading universities and business

schools incorporate the software into their courses every year. Just a few major clients are Unilever, Balfour Beatty, PWC, Alexander Forbes, Anglo American, BHP Billiton, Cornell University, British Gas, BP Petrobras, Total, Sasol, Volta River Authority, Maersk, Addax, Chevron and Shell. Palisade Products Palisade products are extremely powerful, while also being intuitive and easy to learn and use. They can facilitate analysis and decision making; improve efciency; reduce risk, costs and time; and are highly effective for communicating decisions and rationale to stakeholders. The software enables organisations to incorporate uncertainty and probability into estimations and projections, run simulations, and analyse the results. This enhanced output and analysis, enables more informed, and frequently superior commercial decisions to be made. Applications are many but include DCF/NPV Analysis, production and cost forecasting, project scheduling, oil reservoir estimation, real option analysis, insurance pricing, risk quantication, capital project estimation, optimal resource allocation, etc. Palisade’s agship product is @RISK, which enables probabilistic modelling and estimation, using Monte Carlo Simulation. @RISK enables you to put more information into your excel estimation model and get a lot more out – every possible scenario, along with the probability of each possible outcome. The other Decision Tools Suite products include excel based Decision Tree, Optimisation, and Data Mapping tools, and more. Training and Customised Solutions Training enables the client to gain sustainable benet by building and retaining skills in house. Palisade provides training as well as business consulting, and model-building services. Palisade modelling experts can work with your b u s i n e s s e x p e r t s t o d e s i g n models/spreadsheets that give you the information you need, and assist you in analysing the output. They can also build customised software applications that integrate Palisade Software into organisations’ existing processes or systems.

Find out More Palisade has launched in Ghana – if you are interested to know more about the products and how they can help you or your organisation, have a look at the website, www.palisade.com, or email: salesEMEA@palisade.com.

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Energy Ghana Magazine

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Energy Ghana Magazine

MINING/NEWS

Gold Fields to Spend $1.4 Billion Prolonging Ghana Mine Life

G

old Fields Ltd., a South African producer of the metal with mines from Australia to Peru, will invest $1.4 billion to extend the life of its Damang operation in Ghana by eight years. The investment will allow the mine to keep operating until

2024, Johannesburg-based Gold Fields said in a statement. The money will be paid over the eight-year period, it said. "This is a classic brownfields opportunity," Chief Executive Officer Nick Holland said in an interview. "It makes logical sense from all angles

for us to do this." Damang has produced more than 4 million ounces of gold from several of its open pits since it began two decades ago, but output has been in decline since 2013 and Gold Fields has struggled to find the required grade of ore. The company said it had considered closing the mine. Bullion has climbed 19 percent this year in London, rebounding from a three-year drop. Gold Fields' shares declined 5.5 percent to 58.01 rand a share in Johannesburg, cutting this year's advance to 37 percent. Damang's extended life will produce 1.56 million ounces of gold at an all-in cost of $950 an ounce and support 1,850 jobs, the company said. The project will produce

225,000 ounces of gold a year. Gold was at $1,265.50 an ounce in London today, according to Bloomberg generic pricing. "This is a first step in what may well be a much longer mine life in time to come," Holland said. The project will extract less than half of Damang's 4 million ounces of gold resources, he said. Gold Fields' production rose 1.5 percent to 537,000 ounces in the three months through September 30 from the previous quarter, with all-in sustaining costs steady at $1,026 an ounce. It maintained its forecast for full-year output of 2.1 million to 2.15 million ounces. Source: Bloomberg

Mining injects GHC1.35bn to economy

C

hief Executive Officer (CEO) of the Ghana Chamber of Mines, Mr. Sulemanu Koney, has hinted that the mining sector is a leading tax payer and contributor to the Ghana Revenue Authority's (GRA's) domestic collections in recent years. He disclosed that the sector alone contributed about GHC1.35 billion to GRA, representing 14.8% of GRA's total direct taxes in 2015. He said corporate tax stood at GH¢463.12 million with mineral royalties at GH¢485.6 million while pay as you earn (PAYE) raked in GH¢ 404.74 million and other taxes at GH¢0.87 million.

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He added that the industry accounted for 31% of the country's gross export revenue in 2015, reinforcing its position as the leading source for forex and a major contributor to the country's balance of payments. According to him, producing members of the chamber returned USD3.1 billion representing 85% of their mineral revenue (USD3.1 billion) through BoG and the commercial banks in 2015, a situation which has significant bearing on the international reserve position of BoG and the stability of the monetary system as a whole. Mr. Koney made the

disclosure during a media encounter in Takoradi in the Western Region to highlight achievements, progress and challenges of the mining sector in the region. Among the topics treated included an overview of the

chamber, survey of Ghana's minerals landscape, performance of the mining industry, life cycle of mining, fiscal flows from mining, local content, CSI, challenges and recommendations.


Energy Ghana Magazine

He contended that for the chamber's vision to be the respected, effective and unified voice for the mining industry and mission which is "to represent the mining industry in Ghana using the resources and capabilities of its members to deliver services that address members, government and community needs, in order to enhance development" will not be compromised. He also announced that the

mining sector is the country's leading source of Foreign Direct Investment (FDI) as records from the Minerals Commission shows that FDI inflow into the mining sector in 2015 was USD 965 million. Cumulatively, the investment inflow into the mining sector from 2000 to 2015 stood above US$ 10 billion. However, he mentioned environmental destruction by illegal miners which mar the

image of the entire minerals industry, including properly regulated large-scale mining firms as a challenge to the sector. Others are that it imposes a significant avoidable cost on duly registered mining companies. Mr. Koney further mentioned abandoned pits as a potential cause of death of host community members; bequeaths, community members, companies and state with rehabilitative costs;

deprives the state and community of rent since the operatives are not tax liable; destroys aquatic life and increases cost of treating potable water; threat to potable water availability and threat to production of food and cash crops as major challenges. Source: todaygh.com

AngloGold Ashanti hits $161m in cashflow despite challenges

E

ven though gold prices on the world market continues to plummet, AngloGold Ashanti, a mining giant saw a significant jump in its cash flow to 161 million dollars, further improving its net debt position in the thirdquarter of this year. With gold now trading around 1,222 an ounce, a decline in ore grades at some of its operations and a challenging operating environment for its South African and Ghanaian business, the company managed to stay within budget. AngloGold Ashanti has for the past three years delivered on a range of self-help measures to cut debt, using internally generated funds without diluting shareholders. Whilst it was indicated

previously that costs would be higher in the second half of the year, the increase was exacerbated by a poor performance in South Africa, a delay in accessing higher grades in Brazil, capital expenditure absorbed over fewer ounces, and strengthening currencies. By the end of the third quarter of this year, the free cash flow was 161 million dollars, before the 30 million dollars one-off cost incurred for the early repayment of its high-yield bond, which was the Company's most expensive debt ever incurred. What the free cash flow generation has been is to be significant improvement on what was reported the same period in 2015 which was 50 million dollars and 49% more

than the 108 million dollars generated in the first half of 2016. Commenting on the results the Chief Executive Officer of AngloGold Ashanti, Srinivasan Venkatakrishnan in a release to the media said, "We generated strong free cash flow in the third quarter, taking this year's cumulative free cash flow to nearly a quarter of a billion dollars, further reducing debt." "Work is already well advanced to turn around our operating performance in the near term by improving volumes and accessing higher grades as per our plans, and over the medium term by investing in our low-capital, high-return brownfield projects," he stated. Production in the third

quarter according to the AngloGold was 900,000oz compared to 974,000oz in the third quarter of last year, which included a combined 32,000oz from Cripple Creek & Victor and Obuasi, which have been sold and idled respectively. Moab Khotsong, Mponeng, Iduapriem, Siguiri and Serra Grande delivered improved performances. Total output from South Africa dipped 7% year-onyear to 235,000oz, mainly due to lower average recovered ore grades from underground. The Company's mines in South Africa faced stoppages following three fatalities in July. Lower production from the AngloGold Ashanti's International Operations of 665,000oz, compared with 702,000oz in the third quarter of last year, was mainly a result of lower ore grades as planned, at both Tropicana and Geita, as well as delays in accessing high-grade ore at its operation in Brazil. For the first nine months of the year, all-in sustaining costs were $965/oz, an increase of 4% compared to the same period the prior year. Source: B&FT

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Energy Ghana Magazine

EVENT/AFRICA OIL GOVERNANCE SUMMIT

AFRICA OIL GOVERNANCE SUMMIT 2016 IN PICTURES

ACEP

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Africa Centre for Energy Policy


eNERGYGhana Energy GhanaMagazine mAGAZINE

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Energy Ghana Magazine

INTERVIEW/DR. FRED MCBAGONLURI

T

he EMG team caught up with one of Ghana's seasoned Engineering lecturers at Ashesi University. He is an industry expert and an inventor. He loves to study to bring about transformational change. Let's meet Dr. Fred McBagonluri.

EMG: Who is Dr. McBagonluri? DR: Professor McBagonluri was born in Ghana, went to Nandom Secondary School from 1985-1990 and St. Augustine College in 1991. Over there, I got a scholarship to go to the United States to study Manufacturing Engineering. So I'd like to say I'm a small guy who just got lucky. EMG: Assessing yourself as a student, would you say were a bright student? DR: With laughter, that's an interesting one. I think I've just been working hard. I was one of those students who

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really, really worked hard. EMG: How is family life? DR: Yes! I have a very beautiful and supportive wife. I'm sure she would like to hear that as she probably doesn't hear that often. I have three daughters, the oldest one is 13years old, I have an 11years old and a 5year old who will soon be 6years. So I'm happily married. EMG: So you left Ghana in 1991 if I got the timeline right, you got a scholarship to the United States of America, what were you going to do there? DR: So interesting enough, this was part of the Head of

State Award Scholarship. That was Rawlings's time and I had gone into that competition actually thinking I was going to read medicine. This was one the reasons why I went to St. Augustine's College to study Biology. The day I submitted my final application at the scholarship secretariat, the principal secretary looked over and said; “Oh, this is an Engineering Scholarship”. So I said; “Nobody really specified I was a biology student”. He then said; “Well, it is a scholarship for Engineering, do you still want to go?” As I was determined to go, I chose Industrial Engineering and I guess the

rest is history. EMG: So your first university was? DR: Central State University, it is in a very little town called Ohio. After getting in for the first couple of weeks, I just realized Industrial Engineering was not what I was really interested in. I changed my major to Manufacturing Engineering. EMG: Was it that easy? DR: No, it wasn't. It took me five years instead of four years and I was determined not to do industrial technology because of the mathematics involved.


Energy Ghana Magazine

EMG: What about the mathematics involved? DR: It wasn't rigorous enough, I needed something to keep me up all night. EMG: Wow! That's interesting. Let's move on to Central State University, Ohio. When did you graduate? DR: I graduated in 1996 EMG: How many years did it take you to finish your PhD? DR: That's a question I don't usually answer, you just go ahead and get it done. I think I did a seven -year window but I spent 2 years full time. I went through my proposal, defense and then I went off to work. EMG: Which company did you join after school? DR: Siemens EMG: The global Siemens that we know? DR: Yes, and Siemens was based in New Jersey so obviously, I had to do visitation globally. EMG: Did you have to apply for Siemens or they poached you? DR: They hired me just like anybody. EMG: Did you have to compete for the position?

Association. EMG: So what made you come home? DR: There is the saying that the Ghanaian always has his bag packed when you meet a Ghanaian abroad, whether in Europe or America, there is always the yearning that one day he is going home someday but for some, that day never comes. I was thinking I'm going to come home but when? I mean have I achieved the goals I set myself? Have I attained all the industrial experience I had? Have I obtained all the numerous awards and almost become an astronaut, but the time was never right. So I would say what made me come home was the vision of meeting Patrick Awuah-the Founder of Ashesi University. Patrick and I met in Washington DC and he laid down the vision. You couldn't just hold back but say this is something I can help support. This is a guy that is in an environment where we have come to believe that nothing is possible and against all odds; he is pulling it off. So I think it was a case of buying into a vision that made it easy to come home because the very day I met Patrick in Washington DC, that same day, I got an offer from Harvard University. As a Divisional Head of R and D at Siemens as at that time, that was a lot of money. EMG: In all these, were you going to do full time or part-time job at Harvard? DR: It was a full-time offer but I took Ashesi instead.

DR: Oh yes I did. My understanding was that at the time I got that job from Siemens, 120 other people had applied for that same job. I still did the rest of the work at the university; I balanced it quite nicely with real life industrial experiences while at the same time writing my dissertation. By the time I finished my dissertation, I think the day before, I defended my dissertation and became a senior manager at Siemens R and D (Research and Development). I did a one year MIT, MBA. If you probably know, Kofi Annan did the same program in 1972. It is the oldest MBA program in the United States and for you to get there, you need at least 14 years of work experience at management level.

DR: Well, most of them were at Siemens and probably being at the right place at the right time. I got hired on a project that required a new way of manufacturing a product they have been doing for 60years and it was called “the factor of the future''.

EMG: Where were your peers and how were they seeing you?

EMG: Why? Should you be rich by then?

DR: Good question, I never really paused to question myself but from time to time you get friends, from college who will come over and say, “Fred what is all this school about?......are you gonna stop somewhere and get a life?”; or they would come to me with their flashy brand new BMW cars and say “Look this is what life can be…” and then you would have to explain to them that my father is not the President of Ghana Bar

EMG: I read somewhere in your achievement, that you have numerous patents. At what time did you start this and why all these patents?

EMG: So how many of these patents do you have your name? DR: 21 of them have been issued but it doesn't reflect in my pocket.

DR: Well, the patent process is a little different in the United States. If you work for a company, they own the patent you just formed. EMG: So you are here in Ghana enjoying Ashesi. It is not only a school but a brand. In your own words, how would you describe Ashesi? DR: I think Ashesi is an African education that speaks for itself.

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Energy Ghana Magazine

INTERVIEW/DR. FRED MCBAGONLURI

EMG: Ashesi has a vision to replicate MIT is that true? DR: Exactly, well we want to be the best engineering school in the world. We want to be the institution that when your children, grandchildren and great-grandchildren think about going to do engineering, computer science or business administration, that's the first thing that comes to their minds. That I can be anything I want to be if I can go through Ashesi. EMG: How long have you been in Ghana? DR: I've been in Ghana exactly a year now EMG: I believe you have your own personal vision if not a goal as an inventor or an innovator, what do you want to invent in Ghana? DR: That's a very interesting question, I can answer that in multiple words. I think for me, if I can reinvent the way engineering is taught in Africa through Ashesi, that will be a great honour of my life because you know what, it's going to take more than just one Fred to get it going. Most of the inventions I did were not in isolation, I worked with other people as well; so in the burden of revolutionizing a nation, the complexity of developing technology and building an industrial base for this economy, it's going to take more than one person. If every year for the next fivesix years, I can produce 50 graduates coming from Ashesi, that's a critical mass. If I decide today that I would like to do consulting which is one of the things that I will like to do, I don't know people I'm going to hire but if I have this and just by virtue of the fact that I get to teach some of the classes, I can identify some of the golden samples and say; “These 5 guys I'm going to hire them every year to work in the consulting system for me”.

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That's really the priority.

problematic.

EMG: Ghana over the last few years has been plagued with numerous problems, one of which is our energy crisis, what is your stake? How do you see this crisis that has engulfed us?

It's not too late to rally the nation around this pivot. This is the management aspect of it. In terms of figuring it out, I ask the question again, the universities that we have in the country have to be relevant to the problems we face. I would have loved to hear the Dean of Engineering of KNUST being the government spokesperson on the energy crisis which means it's now with the technologist. But you hear the politicians talking and most of the time they don't know what they are talking about.

DR: Well the energy crisis is a crisis and I say; it is a crisis because it just didn't happen because John Mahama was President. It could have happened if Paa Kwesi Nduom was president; it could have happened if Nana Akuffo Addo was also president. It's a culmination of a series of events over the years that basically hit the fan right forming one piece of what we call now as the energy crisis. The second piece of the energy crisis of my mind is that it got politicized and when you have a national emergency, you cannot afford to politicize it. The third issue is that there was a strategic leadership failure. I think it should have been communicated as a national emergency and the nation should have been rallied around it. The fourth challenge was that there was so much pressure that we went into a solution mood right away when we were trying to patch it. Now if you are a leader, you can take a national crisis and reposition it in a way that you gain the sympathy of the nation. The issue that I inherited it, I didn't create it and you know what, I am going to be blunt with you, you can complain all you want and complaining is not going to fix it will not solve the problem. It should be that I need all hands on deck; Ghanaians, Africans and all experts at hand are needed to help to fix this problem. This should have been the approach as once the Ghanaian population is growing, demand and supply of power becomes

EMG: Would you say the over-reliance on Hydrocarbons in terms of energy has failed us? DR: I really don't think so, I think that we have not been able to engineer hydro to our advantage. In other parts of the world where there is hydro, they actually recycle the water. They don't allow the water to run into the sea but we haven't figured it out exactly. When we are talking about the water level is going down, I am sure it is not the dwarfs with the sharp teeth that are drinking the water, but the water is draining into the sea. The water may also evaporate because we are in a tropical environment. The Delta estuary in the Volta Region and the Volta Lake drains into the sea. Nkrumah, I understand had a master plan to re-divert the water back upstream as it is done in the New York. The water is moved right back in and it fills the reservoir; that's why it is called a dam. The challenge we face is a technical challenge. Hydro hasn't failed us. I think we have to find a way to harness it to our advantage and I still believe we have some other dams in this country that potentially should have been hydro sites as well. EMG: A lot of experts have talked about renewables, a

very nice fanciful word. We've been given so many lectures and education on the fact that renewables look like the option among the energy mix that could salvage this crisis. In your view how do you see renewables as a panacea to this challenge? DR: Good question, I mean when I look at the energy problem I look at it holistically. It's not going to cost us anything if you are in the north and you have good sunshine, then maybe solar energy is the best option. We've got to be very careful because anytime, we talk about cost as the key factor preventing us from implementing, this makes us innovative. Do you know the number of Land Cruisers we have in this country? For me money should not be the issue because again we can prioritize, we can build partnerships, give tax breaks and incentives. There are many companies out there in the West even some owned by Ghanaian expatriates that need help. The government can grant subsidies; in the United States, for instance, the first set of technologists do not break even for a long time. But you need to have a road map and a vision that says for the first 10 years, we are not going to make any profit. After that investor can come and invest in this sector with the offer of tax breaks inclusive. EMG: What would you want the energy sector to do? DR: Policy is key. I think we need to drive policies that will incentivize people to move towards developing new technologies. I will give you an example, I think when I look at my neighborhood for instance at the peak of the dumsor, I had a generator big enough to supply at least 5 other homes around my house


Energy Ghana Magazine

but what was the incentive? To oer electricity to those homes requires pulleys just as a car has a pulley. We have energy pulley. I have a next door neighbor who has a borehole, I could share his borehole with him and pay half the price he used in digging. But anytime I say hello to him, he looks somewhere else; so I'm going to dig a borehole too. We are all tapping into the same water source and we are neighbors but I could invest in rainwater harvesting and then we could all use and balance our ďŹ eld. I'm just using that analogy to say that there are things that we can start doing. I mean villages can use their own hydro bridges; we have to think outside the box and burn the box. It shouldn't only be about government. Look at how much trash Zoomlion pulls. If Zoomlion is incentivized to turn that into methane or biogas; although it may be expensive, subsidies may be granted for a certain period of time to serve as an incentive for them to go into methane and biogas production. EMG: Dr, what is your favorite food? DR: My favorite food is banku and tilapia with hot pepper. EMG: Where would you normally hangout? DR: I haven't found a place yet. EMG: Thank you very much Dr. for this opportunity and we wish you all the best. DR: You are welcome.

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Energy Ghana Magazine

DISCOVERY/TOP TEN

10G

Top

Countries That Use Green Energy

reen or renewable energy is the energy that can be generated from the natural sources, such as sun, wind, rain and tides. It can be generated again and again, that's why it is called renewable. The question of the importance of renewable energy was raised many times by progressive countries. However, the biggest share of the world's energy still comes from non-renewable sources of energy such as oil, natural gas, coal and fossil fuels.

Non-renewable energy is called like that because it cannot be regenerated (at least in the foreseeable future). Many progressive scientists and public ďŹ gures have repeatedly expressed concern about the fact that above-mentioned sourced of the nonrenewable energy may vanish in ďŹ fty-sixty years. Despite that, only

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some countries and only in the last years started to expand their share of the renewable energy in their energy complexes. What Countries Lead in the Use of the Renewable Energy? In the last years, many countries started thinking about the renewable energy as the source of their energy independence and as their investment for the future. Thereby, we can see more and more resources allocated for renewable energy per year. Top ten countries that use green energy are (due to the amount of the renewable energy that they produced in the 2015 year in million tonnes of oil equivalents):


Energy Ghana Magazine

United States: Their 65 million tonnes of oil equivalent thermal units came from renewable units in 2015 year. Moreover, this accounts for 22 percent share of all renewable world energy in 2015 year. During the last seven years, the share of renewable energy in the United States has grown from 1.5 percent to more than 5 percent (President Obama's administration is a great supporters of the green energy) as statistic says, a new solar plant in 2014 year was installed every two and a half minutes. One of the reasons of such enthusiastic use of green energy is the American Recovery and Reinvestment Act of 2009 year. China: Generally, there has been produced green energy of around 53.10 million tonnes of oil equivalent. Despite the fact that China is second in the list of total production of the green energy, this country takes the first place in the wind energy. There were installed more than 115 GW wind power plants prior to 2015 year. It is almost in two times bigger than in the United States (wind power installed capacity prior 2015 year is around 65 GW). Technology of the wind energy becomes more available and effective year to year, which stimulates its use in different projects over the globe. Germany. This country is third by the amount of green energy produced in 2015 year; it produced around 31.70 million tonnes of oil

equivalents from the renewable energy sources. However, Germany left United States and China far behind due to percentage of green energy use in the country. In 2015 Germany was able to produce around 78 percent of their day's electricity demand by renewable energy sources. For example, the same number for the United States in 2014 year will be only around 13 percent. Spain: It was the leader in installing of the solar energy systems in 2008 year, but has significantly dropped its positions in 2010-2014 years. In 2015 this country produced around 16 million tonnes of oil equivalents from renewable energy sources. Brazil: In this country, 15.40 million tonnes of oil equivalent thermal units came from renewable units in 2015 year. Italy. 14.80 million tonnes of oil equivalents came from green sources. It produced around 8 percent of all its energy by solar plants. India. With 13.90 million tonnes of oil equivalent thermal units, which came from renewable units in 2015 year, India is going to get over 25% of all its energy demand from green energy sources.

United Kingdom. 13.20 million tonnes of oil equivalent thermal units was generated from renewable energy in 2015 year. This represented 300 percent growth of electric cars sales. Japan: This country has more electric charging stations than gas stations and produced around 11.60 million tons of oil equivalent from renewable sources. France: 6.50 million tons of oil equivalent thermal units came from renewable units in 2015 year. Its well-designed FiT for buildingintegrated photovoltaics (BIPV) has a great impact on a green energy development in a country. However, EPIA (European Photovoltaic Industry Association) talks about the lack of the political support and attacks from the nuclear and fossil fuel energy. Nuclear energy still has plenty supporters, because it gives attractive jobs to people interested in engineering and mathematics.

Which countries have the biggest percentage of the green energy use?

The above given list is effective to understand which countries form the biggest world green energy share. However, the list of the countries that have the biggest percentage of the green energy use will be very different. Here are top three countries due to the percentage of renewable energy use:

Ÿ

Denmark : This country is able to generate over 140 percent of its electricity demand from wind turbines (it is 39.1 percent of all electricity that country generates)

Ÿ

Germany : Around 26 percent of country's power generation comes from green energy sources

Ÿ

The United Kingdom : its standalone turbines and grid-connected wind farms produce around 10 percent of country's electricity demand. However, in Scotland, over 98 percent of households' energy needs are satisfied by wind turbines.

The success of the green energy in the last five years gives hope for a clean future. More and more countries start financing the renewable energy. It is a kind of a race for the biggest renewable energy use nowadays; it is a race where everybody wins. For example, Sweden has set a goal to get 100 percent of the country's energy need from green sources. The same goal has many small countries such as Costa Rica. Kenya makes more than a half country's energy from geothermal energy; Denmark is going to be fossil-fuel free; Uruguay is already 95 percent renewable energy country can you see a good trend here too? Such activity represents the changes that occur in the world energy system nowadays. These changes give hope and faith in a clean future for our kids. Source: conserve-energyfuture.com

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Energy Ghana Magazine

POLITICS/ELECTION & ELECTRICITY

Ghana's Electricity Policy Since 1920: The Plans, the Promises and the Election Cycle Background According to Genesis 1:3…And God said, “Let there be light,” and there was light. God saw that the light was good, and he separated the light from the darkness. The first attempt to make this vision a reality in Ghana was in 1920. The first attempt to also develop a modern legal framework for the energy industry in Ghana was in 1920 when the Electricity Supply Ordinance was passed (Botchway, 2000). Indeed electricity is the convertible currency of modern development. Access to reliable electricity facilitates the establishment of industries, small and medium scale enterprises, knowledge sharing and acquisition and agriculture productivity. In order to take advantage of the importance of electricity, Ghana launched a Strategy Paper (2012-2016) that sought to support two strategic pillars: Improving productivity in Ghanaian enterprises and, supporting economic and structural reforms aimed at improving the business environment. Further, the Shared Growth and Development Agenda seeks to fast-track the rate of economic development through modernized agriculture, infrastructure

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development, energy access and industrialisation. The Achaemenes of these goals depend on access to reliable supply and quality electricity by industry, commercial and domestic users. This means that effective (reliability of supply) and efficient distribution (reduction of losses) are pre-requisite for Ghana's development. However, Ghana has experienced 5 Major Loading Shedding Eras since 1983: That is1983, 1997, 2003, 2007 and 2010 till 2016 when the country experienced generation crises. These crises were broadly attributed to the following: (1) Insufficient investment in new infrastructure (Adom et al., 2012) (2) The failure of hydropower plants to supply adequate power due to perennial drought; (3) Spontaneous outages at the Vridi thermal plant in Cote d'Ivoire where Ghana imported an average amount of 674.8GWh of electricity from 2000 to 2010 (Energy Commission, 2010); Electricity supply challenges include; (I) Inadequate infrastructure

requiring huge investments; (ii) Inadequate access to energy services; (iii) High cost of fuel for electricity generation; (iv) Inadequate regulatory capacity and enforcement; (v) Operational and management difficulties in utility companies; (vi) Vulnerability to climate change and environmental impacts and;

(vii) Inefficiency in the production, transportation and use of energy The challenges have been attributed to both internal (management) and external factors (government interference, lack of investment). The question is, how has politics contributed to the problems or the solutions in the power sector?


Energy Ghana Magazine

2. Why energy matters in elections - The Theory of Public Choice First, the public choice theory propounds that voters generally lack incentives to vote and some of those who do vote are ignorant of political and national issues (Buchanan, 1991; Mueller, 2004). This assertion is based on the assumption that an individual's vote rarely determines the outcome of an election and that the process of gathering data on national issues cost money and time, which the average voter may not find worthwhile or the ability to pay. According to Butler (2012), political choice is different from economic choice and usually leads to voter apathy. For instance, when someone makes an economic choice, the person experiences the cost (time, money, effort) and the benefits (the right to the outcome of the choice). However, in public choice, those who benefit are not necessarily those who bear the cost. Further, in a competitive market, buyers can move to new sellers when the services of an existing seller becomes poor. This does not happen in a political environment where citizens may not be able to walk away when political decisions are not in their interest. Therefore, individuals need to have a say in the decisions of duty bearers since the citizens may bear the cost of these decisions. Second, the agency theory stipulates that the principal (voters) usually have incomplete information on whether the agents (politicians) will fulfill their promises and pursue the national interest when voted into power (Besley, 2005). This calls for participatory policy making with citizens driving the national agenda by making

Source: Bautista, 2012

recommendations especially before politicians are elected. Finally, political parties have one main objective- that is to get elected. Butler (2012) posits that in order for political parties to get elected, they need to pursue policies that appeal to the masses. This provides a trade-off opportunity for citizens to make inputs into the policies of political parties

before they are elected. 3.0 ENERGY SECTOR INTERVENTIONS The various energy policies, plans and programmes during this period include the following: · Electricity Supply Ordinance (1920); · Volta River Scheme (19151961); · Rural Electrification Programme (1972); · National Electrification Scheme – NES (1989) with two main components: District Capitals Electrification Programme –DCEP (2000),

Self-Help Electrification Programme- SHEP (2001) · GEDAP · Renewable Energy Act (2011) · Power Ministry -2015

became the sole power utility provider responsible for the generation, transmission and distribution of power · The Ordinance had very limited ambition

1. ELECTRICITY SUPPLY ORDINANCE – 1920 Purpose: Generation of power especially for the bauxite company and government officials · The first attempt to develop a modern legal framework for the energy industry in Ghana was in 1920 when the Electricity Supply Ordinance was passed (Botchway, 2000) · The ordinance provided for private generation, regulation of diesel-based power and the inspection of generation activities by government officials · Under the Ordinance the Electricity Department was established as the state regulatory agency, but due to the lack of private sector participation in the industry, it

2. VRA (1915 TO 1961) Though the idea of the Volta River Scheme originated as far back as 1915, it was the government of the first President of Ghana that initiated the Volta River Project and saw to its completion. The idea of building a dam across River Volta to generate electric power and turn Ghana's bauxite into aluminium is credited to Albert Kitson, a geologist in the government of Gold Coast in 1915. This was done in order to have; · A fully integrated and nationally owned aluminium industry processing Ghana's own bauxite with Ghana's own power and Ghana's own labour into a full range of finished aluminium products; and

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Energy Ghana Magazine

POLITICS/ELECTION & ELECTRICITY

· Abundant and cheap power, which would, in turn, make possible modernization through industrialization of the Ghanaian society. This brought about the establishment Volta River Authority (VRA) in 1961 for the generation and transmission of power. Four hydroelectric generating units with total capacity 588MW, including 15 percent overload capacity, were installed in 1965 at Akosombo. 3. Ministry of Fuel and Power in the 1967 - 1970's The enactment of the Electricity Corporation Decree, 1967 (NLCD 125) and the repeal of the Electricity Act, established the Electricity Corporation of Ghana (ECG). Two additional units with a capacity of 324MW, including 15 percent overload capacity, were commissioned in 1972 to bring the total installed capacity of hydropower to 912MW. In 1981, a second hydroelectric plant was installed at Kpong and this added 160MW to the installed capacity. Both plants are capable of providing longterm firm energy of approximately 4,800 GWh/year. On the long-term average, however, the potential energy available from the two plants is estimated to be 6,100 GWh/year. During the national energy crisis in 1982-1983 induced by a major regional drought, the National Energy Board (NEB) was created in 1983 to plan for the comprehensive development and utilization of energy resources. 4. Rural Electrification Programme (1972) The Rural Electrification Programme (1972) was an ambitious programme, which had the objective of increasing electricity access

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for the rural population. No better data is available to assess the success of the programme.

low-voltage lines, transformers, and service drops. Encouraged by the achievements of the ERP in

as far as access to energy services is concerned is the Ghana Energy Development and Access Project

1989- 1990 government committed itself to increase access to electricity for all parts of the country over a 30-year period in a programme known as the National Electrification Scheme (NES).In order to extend electricity to the northern regions of Ghana, where there was no grid electricity, the legislation that established the Volta River Authority (VRA) and the Electricity Corporation of Ghana (ECG) were amended to put the VRA directly in charge of the Northern Electrification Programme (NEP). In 1987 the VRA created the Northern Electricity Department (NED) and took over the additional responsibility for extending electricity to the northern regions of Ghana. In 1990, the VRA rehabilitated and re-commissioned the Tema Diesel Generating Station which has a capacity of providing supplementary generation of 30MW thereby raising the total capacity of electrical power to about 1,102MW.

(GEDAP).The development objective of GEDAP is to improve the operational efficiency of the power distribution system and increase the population's access to electricity and help the transition of Ghana into a low-carbon economy through the reduction of greenhouse gas emissions. Between 1990 and 2001, electricity consumption grew from 4457GWh to 6033GWh at an average rate of 9.42 percent per annum, excluding the Volta Aluminium Company, VALCO, whose aluminium smelter at Tema consumed around 40% of total electricity supply in the mid1990s.There was an increase in access to electricity from 28 percent in 1988, 32 percent in 1992, 43.7 percent in 2000 to over 50 percent in 2005. The energy crisis experienced by the sector in the year 2006 spurred the government and VRA to review their long-term electricity policy in terms of the electricity generating mix. Significant investments have been made in thermal plants and system upgrading with the completion of VRA's 126 MW Thermal 1 Project and several independent power projects at various stages of advancement, all at Tema.

Figure 1

According to figure 1, over the past ten years (2005 to 2014), Industrial consumption grew by 7% annually, NonResidential 9.5%, Residential 4.23% and Street light, 30.3% annually. This calls for investments in generation, transmission and distribution. 5. National Electrification Scheme (1989) Under the National Electrification Scheme (NES) introduced in 1989, the Government of Ghana committed the country to increase electricity access to all communities with a population above 500 by the year 2020. The NES was planned to proceed in six-five year phases over the period 1990 - 2020. The electrification of the several thousand un-electrified villages in the country has been assumed to be by grid extension, with community participation in the Self-Help Electrification Program (SHEP). Challenges envisaged within this programme include: low density of potential consumers of rural areas; low-income levels in rural communities; significant distances required for medium-voltage lines; the costs of medium-voltage; and

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6. Ghana Energy Development and Access Project (GEDAP). The one major programme that has taken off since 2000,


Energy Ghana Magazine

7. The Strategic National Energy Plan (SNEP) The Strategic National Energy Plan (SNEP) completed by the Energy Commission in 2006 is a comprehensive way of looking at the available energy resources of the country and how to tap them economically and timely. The goal of SNEP is to contribute to the development of a sound energy market that would provide sufficient, viable and efficient energy services. 8. Renewable Energy Act – 2011 Ghana has strengthened her commitment to renewables through the passage of a new Renewable Energy Act which places a premium on deploying 10% of renewables in her energy mix by 2020. In order to ensure as stipulated in the Renewable Energy (RE) Act, 2011 (Act 832), that the country derives not less than 10 percent of its electricity generation mix from modern renewable energy (RE) sources (excluding large hydro and wood fuels) by 2020, the government rolled out an RE action plan in 2012 with the objective to attract more than US$1 billion investment in power generation into the national electricity grid within eight years 9. Ministry of Power – 2015 Power Ministry was created to coordinate activities and investments in the power sector. The Election Cycle Energy policies during election periods have by three (3) features. First, governments usually add adhoc thermal capacity the year before or the year of the election. Such decisions are often not based on value for money analysis but by the desire to increase existing capacity. For instance the

lease and operation of a total of 30MW Diesel power units by Aggreko plc, an international company specialized in the provision and operation of emergency power plants in 1999/2000, Kufuor Toy plants of 2007/2008, and Karpower and Ameri plants in 2015. Second, election years also see the over-droughting of the Akosombo Dam. Whilst the current level (2016) water level is below the 240 feet minimum operation level of Akosombo, about 4 to 5 turbines are still operating. Finally, election years also witness increased electricity imports from La Cote D'Ivoire and the realignment and introduction of subsidies witnessed in 1999 and 2016. In 1999, the average cost of power supply was 118Cedis per Kilowatt hour and the tariff was 95Cedis, representing 81% of the cost. However, the cost of supply increased to 237Cedis, whilst

the tariff was maintained at 95Cedis, representing 40%. These measures are not just unsustainable but damaging to Ghana's power sector. In order to prevent pro-election ad-hoc power measures, Ghana needs a power investment plan with fuel, generation, transmission and distribution strategies. Conclusion Despite all the plans and promises, power supply in Ghana is fragile. Successive governments need to decouple power investments and put together a power strategy that diversifies fuel sources in the energy mix into renewables and gas-fired thermal plants. Electricity is

a serious business, a vital factor of production and an anchor for economic development. It, therefore , requires investment, competence and commitment. Elections provide the platform for citizens to assess the energy policies of political parties and to also examine the energy achievements of the government. Credit: Ishmael Ackah Africa Centre for Energy Policy, Accra Ackish85@yahoo.com

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HEALTH SAFETY AND ENVIRONMENT/NEWS

Energy Ghana Magazine

Ghana is ready to handle oil spills - EPA

G

hana is ready to handle any oil spillage should such an incidence happen. This is the assertion by authorities of the Environmental Protection Agency (EPA). According to the agency, various governmental bodies have been set up with measures put in place to ensure any such occurrence is immediately taken care of. With Ghana now an oil producing country, concerns have been raised as to how the country will handle such an occurrence without it affecting its economic and environmental activities. But the Deputy Director at the Environmental Protection Agency, John Pwameng says he is confident Ghana can handle any form of oil spillage should it occur. "We are very confident because when you look at all

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the companies who are operating in Ghana, they all have their emergency response plans. They have got the minimum equipment that is required; the dispersants that are required for response and they have the arrangement in place so they have also done rehearsals. Many of the companies have rehearsed with the communities along the beach on what they have to do if there is a spill. So everything is sorted," he said. Mr. Pwameng further said the EPA has also inaugurated a 20 member board called the National Oil Spill Contingency Plan (NOSCP) working groups to roll out measures to handle oil spillage in the country.


Energy Ghana Magazine

Coordination is key. We try to improve the coordination to give different tasks to different groups of people.

Also, the EPA, through the collaborative effort of its stakeholders has been able to achieve these goals set out in the NOSCP. It has also developed on dispersant use, guidelines on the importation of dispersants, guidelines on management of oily waste and the environmental sensitivity atlas of the coastal area of Ghana.

They are also to improve the effectiveness of management for when something occurs because time will be of the essence if anything occurs," he stated. Ghana in 1986, through the assistance of International Maritime Source: citifmonline.com Organization (IMO), developed the National Oil Spill Contingency Plan (NOSCP) after an initial risk assessment. At the time, the government set out certain specific goals so as to have a certain level of preparedness for the management of oil spills.

5 Ways To Prevent Burns In The Workplace

T

hermal burns, chemical burns and electrical burns are very common in the workplace, but they can also be easily avoided. Below, are five tips workers and employers should know for preventing burn-related injuries in the workplace. 1. Follow the rules Employers should enforce rules and safety techniques regularly to all employees. Employees should be aware of this information at all times. Prevention is key to preventing burns in the workplace. 2. Handle with care Workers should take extra precaution when they are near

stations are located in the event of an accident.

hot surfaces, handling hot oil or grease. Reaching across surfaces, transporting hot materials and dumping hot liquids can be disastrous if a worker is not careful. 3. Dress the part Wearing the proper PPE and clothing can make all the difference. Fire resistant materials, such as wool, in clothing, are known for helping to prevent burns to the body. The proper gloves, shoes and eye protection should also be worn.

4. Prepare for the worst Accidents do happen. Make sure your workplace has properly functioning fireextinguishing equipment, first aid kits and eyewash stations. It is important that employees are aware of where safety

5. Pay attention While on the job, everyone should be continually aware of their surroundings and movements. Shortcuts and an unfocused mind can lead to fires or burns. Always monitor every situation with a preventative mindset. The best prevention against burns is awareness. Source: occupationalhc.com

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TECHNOLOGY/INNOVATION

Energy Ghana Magazine

The Spherical Sun Power Generator

G

erman Architect Andre Broessel believes he has a solution that can "squeeze more juice out of the sun", even during the night hours and in lowlight regions. His company Rawlemon has created a spherical sun power generator prototype called the beta.ray. His technology will combine spherical geometry principles with a dual axis tracking system, allowing twice the yield of a conventional solar panel in a much smaller surface area. The futuristic design is fully rotational and is suitable for inclined surfaces, walls of buildings, and anywhere with access to the sky. It can even be used as an electric car charging station.

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Energy Ghana Magazine

Ghana is ready to handle oil spills - EPA

"The beta.ray comes with a hybrid collector to convert daily electricity and thermal energy at the same time. While reducing the silicon cell area to 25% with the equivalent power output by using our ultra-transmission Ball Lens point focusing concentrator, it operates at eďŹƒciency levels of nearly 57% in hybrid mode. At nighttime, the Ball Lens can transform into a high-power lamp to illuminate your location, simply by using a few LED's. The station is designed for o-grid conditions as well as to supplement buildings' consumption of electricity and thermal circuits like hot water." Source: alternative-energy-news.info

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