Plans are underway for UK-based Blue Energy to build Africa's largest solar power plant in Ghana lighting the way for more growth in the renewable energy market

Ghana’s forward-thinking policy has put it at the forefront of the renewable energy revolution in Sub-Saharan Africa. In its bid to increase the country’s use of renewable energy from its current one percent to 10 percent by 2020, Ghana is now set to have the largest solar power plant in Africa.

UK-based Blue Energy, which is a subsidiary of the Stadium group, a large European private asset and development company, announced last December that it has the go-ahead and funding to build a giant 155-megawatt photovoltaic (PV) power plant in Ghana.

Situated in Nzema in the western region of Ghana, work on installing 630,000 PV modules is planned to begin at the end of this year. Blue Energy’s Nzema Project Director, Douglas Coleman, said: “We now have all the licences and approvals we need to go ahead with this project and are in the middle of financing talks. We fully expect to begin construction by the end of 2013. “We have been developing this project for two years as the process to gain a licence for generation is a complex and rigorous procedure.”

Foreign investment

The Nzema project will be the first to benefit from Ghana’s 2011 Renewable Energy Act which has established a system of feed-in tariffs and aided the Ghanaian government in attracting foreign investment for its renewable energy schemes.

Energy Minister Dr Joe Otenj-Adjei said in an interview with Revolve last May that the Government would work closely with eligible companies who aimed to have 10 percent of their total generation capacity coming from renewable sources. He said: “We believe that as more Independent Power Producers come into the country and begin to see that this is the policy, then they will also participate in the programme to ensure that 10 percent of their total generation capacity comes from renewable sources.”

While Ghana has one of the fastest growing economies in Sub-Saharan Africa, it has been blighted by power shortages as it is largely reliant on hydroelectric power which is vulnerable to drought. Consequently, Ghana is looking to more than double its installed capacity of power supply and renewable sources will play a major role in that.

The fact that the costs of renewable energy have tumbled in the past two years has also played a part in emerging economies looking more and more to harness it. A recent glut of solar panels on the world market has helped to bring prices down and in the past two years the cost of solar power has decreased dramatically by as much as 40 percent.

A quick hit

Coleman said: “The significance of the Nzema project to Ghana is that there is a shortage of electricity available for the population and industry and that is hampering economic development in Ghana. “The country is looking to increase its installed power capacity and by establishing one renewable energy plant supplying 155 megawatts of power relatively quickly compared to other forms of generation, means they are getting a quick hit.” He believes Africa is a prime place for the growth of sustainable energy although the speed and uptake of schemes like Nzema will vary from country to country. “The main driver is the global awareness of a need to manage carbon emissions,” he said. “Also, the price of conventional fuels is rising while the cost per kilowatt of solar energy is falling.

Eventually, those two lines will cross and solar will have grid parity. “It will become a competitive source without subsidy, without support and it will match conventional generation and become a true choice. “We are not quite at that point yet, but I think there has been some vision shown by the Ghanaian government and the company because the one thing you get from very big plants is economies of scale; that means we can produce a very competitive tariff for renewable energy in Ghana compared to conventional forms of generation.”

More in pipeline

Blue Energy’s entrepreneurial nature has been instrumental in winning approval for the scheme and according to Coleman, other projects in Ghana, West Africa and other parts of Africa, may soon be in the pipeline.

Blue Energy’s Chief Executive Chris Dean said: “The Nzema project is a case study in how governments can unlock the huge potential for solar energy in Africa. We are delighted that it will make a strong contribution to the national economy and provide much needed generating capacity as well as help develop skills in the future.”

The US$400 million scheme will increase Ghana’s current generating capacity by six percent and will meet 20 percent of the government’s target of generating 10 percent of its electricity from renewable sources by 2020.

Blue Energy has established a subsidiary company, Mere Power Nzema Ltd to build the plant on a 183-hectare site close to the village of Aiwiaso in Western Ghana.

The site is next to a main transmission line to make for easy connection to the national grid. Socio-economic reports compiled by Blue Energy show 500 jobs will be created over the two-year construction period and 200 permanent jobs in operation and a further 700 could be created as service industries set up to support it.

Over the lifetime of the project, Nzema will contribute US$100 million in tax to the Ghana Government and its clean energy will avoid emissions of 5.5 million tonnes of CO².