The Potential for Renewable Energy

(Solar PV) for the Real Estate Sector in Ghana

Rockson Dogbegah

Chairman, Berock Ventures Ltd.

Chartered Building and Civil Engineering Contractors

• Ghana: Economic outlook

• Energy sector

• Formal real estate sector

• Opportunities and Challenges for developing

Solar PV in Ghana

Presentation Outline

Ghana: Outlook

Capital Accra

Total Area

(km2)

238,540

Population 26,786,598 (2014)

GDP (current

US$)

38,616,536,131.65

(2014)

GDP Per

Capita

(current US$

1,441.64 (2014)

Access to

Electricity (% of

population)

64.06 (2015)

Energy Imports

Net (% of

energy use)

1.63 (2012)

Source: World Bank

ENERGY SECTOR

Ghana’s National Energy Context

• The state still owns both

electricity distribution

companies, as well as the

electricity transmission

company, but opening up to

the private sector;

• Ghana’s energy sector vision is

to develop an “Energy

Economy” to secure a reliable

supply of high quality energy

services for all sectors of the

Ghanaian economy and also

to become a major exporter of

oil and power;

• The Government of Ghana has

defined key targets for the

energy sector:

- Universal access to electricity by

2016;

- 5000MW of generation capacity

by 2015;

- Achieve 10% contribution of

renewable energy (excluding

large hydro) in electricity

generation mix by 2020;

Main Sources of Energy for Lighting

0

10

20

30

40

50

60

70

80

90

Pe

rce

nta

ge (

%)

Main Sources of Lighting

Urban Rural

0

10

20

30

40

50

60

70

Pe

rce

nta

ge (

%)

Main Sources of Lighting

All Region (2000) All Regions (2010)

Source: Energy Commission

Installed Electricity Generation Capacity

(End of December, 2014)

0

200

400

600

800

1000

1200

1400

1600

1800

Hydro Thermal Renewables (VRASolar)

Installed Capacity (MW)

Installed Capacity (MW)

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

Hydro Thermal Renewables (VRASolar)

Share (%)

Share (%)

Source: Energy Commission

‘FORMAL’ REAL ESTATE SECTOR

Ghana Real Estate Developers Association (GREDA)

Membership Number

Registered 250

Active 150

Inactive 100

Source: GREDA

Real Estate Types

Office 55% Hotel/Hostel

20%

Residential 17%

Shop 5%

Industrial 3%

Commercial Real Estate by Type

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

Housing Types

2000 2010

Source: Ghana Statistical Service (2010) Source: Karley (2009)

GREDA and Housing Statistics

Local Residents

27%

Foreign Residents

8%

Ghanaians Living Abroad

65%

Client Profile of GREDA

Source: Ayitey et al (2013)

GREDA 10%

Individuals 90%

Housing Supply %

Source: Karley (2009)

Real Estate Statistics: Housing

1 2 3 4 5

Year 1960 1970 1984 2000 2010

No. of Houses 636.189 945.639 1.204.395 2.181.975 3.392.745

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

Number of Houses (1960 - 2010)

No. of Houses

0

0,5

1

1,5

2

2,5

3

3,5

4

4,5

5

1960 - 1970 1970 - 1984 1984 - 2000 2000 - 2010

Rate of Increase in the Number of Housing (%)

Rate of Increase

Source: Ghana Statistical Service (2010)

Shares of Houses built by Selected Real Estate

Developers (2000 – 2006)

Regimanuel Gray 49%

NTHC Properties Ltd 12%

State Housing - Takoradi 8%

Trasacco Estates Development

7%

Devtraco 9%

Lakeside 7%

Others 8%

Source: Bank of Ghana (2007)

Opportunity & Challenges for Deployment of Solar PV in the Real Estate Sector

Absolutely & relatively underdeveloped sector !!!

0

200

400

600

800

1000

1200

1400

1600

1800

Hydro Thermal Renewables (VRASolar)

Installed Capacity (MW)

Installed Capacity (MW)

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

Hydro Thermal Renewables (VRASolar)

Share (%)

Share (%)

Source: Energy Commission (2014)

Housing Supply, Potential Demand & Targeting for

Solar PV

Annual

Supply

(Urban)

Estimate of

Supply by

Developers#

(~10%)*

Estimate of

Supply by

Individuals#

(~90%)*

37,0001

3,700

33,300

25,0002

2,500

22,500

25,000 –

40,0003

2,500 – 4,000

22,500 –

36,000

Source: Amoa-Mensah (2003)1; Mahama & Antwi (2006)2; Karley (2009)3; Ayitey et al (2010)*; #Presenter’s

estimates

• Existing housing stock for

solar PV is ~3,392,745;

• Individuals supply the

bulk of new housing;

• But, developers may

provide economies of

scale for solar PV;

• Special marketing

strategies needed to

capture individual

homeowners.

Energy projections for the Residential Sector

The electricity demand of the

residential sector is expected to

exceed:

• 24,000 Gigawatt-hours for high

economic growth, by 2020;

• The sectoral demand growth

rate could be between 10 – 15

percent per annum if

adequate electricity is made

available.

Government has indicated:

• Additional generation will come

primary from Independent Power

Producers (IPPs);

• Investing in renewable energy is

critical in order to provide access

to some of the remote communities

and make it more sustainable in

the medium-long term;

• Focus shall include investments in

off-grid solutions for decentralized

access.

Source: Energy Commission

Strategic Plan for the Demand Sectors

Residential Sector

• National goal is to achieve

100% universal

electrification by 2020;

• Sixty (60) percent access is

estimated for now; largely

by grid.

Strategic Targets

• To achieve 15% penetration of

rural electrification by

decentralised renewable

energy complementation by

2015; expanding to 30% by 2020;

• To reduce the average

electricity intensity per urban

household by 50% by 2020;

• Decentralised renewable

energy penetration is less than

1% at present.

Source: Energy Commission

Strategic Plan for the Demand Sectors

Commercial and Service Sector

• The objective is to reduce the

energy consumption in

general and wood fuel

consumption in particular, by

introducing energy efficiency

programmes and cleaner

energy alternatives.

Strategic Targets

• To reduce electricity

consumption of military and

police barracks, residential;

• Halls and hostels of public

tertiary institutions by 50% by

2015;

• To achieve 1% penetration of

solar energy in hotels,

restaurants and institutional

kitchens using solar water

heaters by 2015 and 5%

penetration by 2020.

Source: Energy Commission

Regulatory Environment, Policies & Incentives

Regulatory Framework

• Favourable Energy Policy (2010);

- includes the 10% target for the

contribution of modern renewable

energy to the country’s energy sector by

2020;

• The Energy Sector Strategy &

Development Plan (2012) articulates

the vision of Ghana’s energy sector:

- ensure universal access to energy

services and export of energy by

2016;

- The development and subsequent

use of decentralized electricity

generation sources (including

renewables) for remote off-grid

communities.

Renewable Energy Act 2011: Incentives

• Feed-in-tariff scheme offer

guaranteed prices for electricity generated from renewable energy sources;

• Licensing regime for commercial renewable energy service providers;

• Purchase obligation under which power distribution utilities and bulk electricity consumers would be obliged to purchase a certain percentage of their energy required from electricity generated from renewable energy sources;

• Off-grid electrification – promote mini-grid and stand-alone renewable energy systems for remote off-grid locations.

• Renewable Energy Business Fund to promote public private partnerships

Some Outcomes: Renewable Energy Update

Year No. of

Licence

Capacity

(MW)

2010 36 3,905

2013 62 5,074

Solar PV

2010 22 2,155

2013 49 2,472

• Germany via GIZ

supports the successful

implementation of the

Renewable Energy Act of

2011;

• Provisional licences so far

issued for Renewable

Energy electricity had

risen to 62 from 36;

• Out of this 44 are for Solar

photovoltaic (PV)

Open Market for Independent Power Producers (IPPs)

• Takoradi International Company

(TICo)—owned by the Abu

Dhabi National Energy Company

(TAQA);

• Sunon Asogli Power Plant—

owned by the Shenzhen Group

of China;

• CENIT—owned by CENIT Energy

Limited, a special purpose

vehicle created to develop the

IPP;

• Government Consent and

Support Agreement for a fourth

IPP, Cenpower, received

Parliamentary approval in

October 2012.

Potential Areas for Solar PV

Investment

• According to the Energy Commision of Ghana, it is cost competitive to encourage mass deployment of solar electricity for commercial applications like:

- lighting in stores;

- water pumping;

- shaving off consumption in the commercial and services sector during peak hours;

- as an energy conservation measure.

Chine-Ghana South-South Corporation on Renewable Energy Technology Transfer

Introduction

• The project is part of Denmark’s focus on South-South corporation to enable coherent corporation between China and countries in Africa;

• Promotion of the UN’s Sustainable Energy for All (SE4ALL) Initiative;

Aim

• Project aims to effect off-grid community-based electrification;

• Increase the share of renewable energy and promote the productive use of energy.

• Project period: September 2014

– August 2018;

• Project funded by the Danish Government to the tune of

$2,720,000 (including $1,764,000 for Ghana; $956,000 for China);

• Stakeholders include:

- UNDP China;

- Energy Commission in Ghana;

- Ministry of Science and Technology in China;

- UNDP country offices in Ghana and China.

Other Solar PV Projects

• JICA supports with grants the improvement of:

- the distribution system (new sub-transmission lines);

- Solar PV systems (a 720kVA system at the Noguchi Memorial Institute for Medical Research, University of Ghana, Legon);

• Germany via KfW supports with a loan for the development of

a 12MW Solar PV Project with VRA at three sites in the Upper

West Region.

- The first solar PV plant of 2.5MW was commissioned in 2013.

Rooftop Solar Programme

• The Energy Commission with its mandate to ensure the development and

utilisation of the renewable resources has initiated the rooftop solar programme in an effort to contribute to mitigating the current power crisis;

• The objective of the programme is to reduce the daily national peak load by 200 MW through self-generation using solar photovoltaic (PV) technology;

• The programme is targeted at homes, offices, hospitality industry and small businesses;

• Subsidy available to improve affordability:

- rebate to pay for part of the total cost of the solar system (solar PV modules) while the beneficiaries pay for the balance of system (BOS) components;

- Option for beneficiaries to take a special bank loan to offset the payment commitments.

Current Housing Projects

• 4,720 on-going affordable housing units located in Accra,

Kumasi, Koforidua, Tamale, and Wa;

• 5,000 Housing units by Sethi Realty at Kpone-Tema;

• 5,000 housing units by OAS Ghana Limited at Saglemi in the

Greater Accra Region

• Proposed 10,000 housing units at Amansaman/Nsakina by Agu

Resources Ltd.;

• 368 units by M/s Amandi Holding Ltd. for Ghana Navy.

Source: Ministry of Work, Housing and Water Resources

Saglemi Housing Project (5,000 units)

Tamale Affordable Housing Project

Gated Estates

Trasacco Valley

Trasacco Valley

Regimanuel Gray Ltd.

Devtraco Courts Ltd.

Lakeside Estates

Royal Palm Estates

Key Challenges in the Renewable Energy Sector

• High initial investment costs;

• Lack of favorable finance packages

for consumers and solar energy

entrepreneurs;

• Lack of well trained personnel at all

levels;

• Lack of certification of installers and

service providers;

• Poor business development

capacity of key project

implementers, managers, services

providers and beneficiaries of

renewable energy projects;

• Grid stability implications of

intermittent solar power have not

been fully studied in this country.

- For instance, in 2012 the loss of 860

MW from Akosombo Generating

Station led to a total system collapse

of the national transmission grid

culminating into a nationwide black-

out. The effect of large injections of

solar PV electricity on grid stability

could have a similar effect.

- Lack of long term planning and

markets for solar energy

technologies;

THANK YOU