Sunon Asogli, a subsidiary of the Shenzhen Energy Group (SEG), China and an independent power producer (IPP) to build 700 MW Coal-fired power station in Ghana.
Project cost is estimated at US$700 million with a 24 – 30 months delivery timescale whilst construction is planned to incorporate a coal port with 50,000 tonnes berth at Sekondi-Takoradi.
An estimated coal fuel supply requirement of 2 million tonnes/year is anticipated with imports from South Africa.
The Shenzhen Energy Group (SEG) currently has a total installed capacity of 8,106 MW in its generation mix with coal-fired power plants constituting 45.6 % (3,700 MW).
SEG therefore brings a worth of experience unto the Ghanaian energy market and this must be hailed and given the needed support at a time Government of Ghana (GoG) is aggressively pushing to achieve 5,000 MW of total installed capacity by the year 2016.
At the current projected annual electricity demand growth rate of 11%, the Volta River Authority (VRA) projects annual increases in installed capacity of 212 MW.
This may be insufficient if Ghana is to embark on aggressive industrialization by venturing into energy intensive industries – aluminium (bauxite), iron ore and gold refineries.
To grow the Ghanaian economy, industrialize and create jobs, current per capita usage of electricity of 246 kWh must double in the short-to-medium term to 500 kWh and attain in excess of 1000 kWh in the long term.
What strategic role can coal play in this agenda from the energy policy perspective?
Coal – global outlook and forecast
Coal is the dirtiest of the fossil fuels but cheap, abundant, has price stability and widely used. It is efficient, safe with minimal environmental impact when deployed with modern technology; a good reason why it remains attractive to electricity generators worldwide.
Over the decade to 2011, coal alone accounted for 45 % of global energy demand and outpaced growth in renewable energy which was propped under heavy stimulus of widespread governmental support.
The significance of coal in the global energy generation mix is now the highest since 1971 and remains the backbone of electricity generation as the fuel behind the rapid industrialization of emerging economies, helping to raise living standards and lifting hundreds of millions out of energy poverty (IEA, 2012).
World coal demand growth rate remains strong and stood at 5.5 % in 2010 and 2011. An emerging trend behind these dazzling statistics is an interesting dichotomy between OECD and non-OECD countries.
Though electricity demand grew over the last decade in the OECD, coal demand for power generation fell from 42 % to 39 % as natural gas gained market share.
Citing the case of the U.S as an example, in April 2012, net generation from gas-fired thermal plants was virtually equal to that from coal-fired plants at around one-third (33 %) of total generation, driven by remarkable fall in gas prices as a result of new production technologies in shale gas yielding rapid outputs.
In non-OECD countries, coal has pioneered a major revolution in power generation and industry. Energy demand in the power sector worldwide has expanded by 75 % in the last decade with coal use doubling.
In China and India alone, coal-fired generation output increased by 2900 TWh over the decade, equivalent to five times total German power consumption today.
Non-OECD countries now account for 70 % of global coal consumption, with China accounting for one in every two tonnes of coal burned worldwide.
Both China and India have made significant strides in improved access to electricity, with over 500 million people in rural China gaining access to electricity since 1990, thereby reducing the number of households using traditional biomass for cooking.
Chinese, Indian and Korean energy policies have chalked great success in emulating the developed world in coal use – USA (45 %), Germany (42 %), United Kingdom (28 %) and Japan (22 %); Ghana must learn from the success chalked by India and China as it strives to assure electricity supply reliability and increase access from the current 76 % nationwide. Energy from coal in China is 78 %, India – 68 % and Korea – 43 %.
Furthermore, access to electricity in rural India rose from 56 % in 2006 to 67 % in 2009 driven by a strong energy policy on coal. According to the IEA (2012), a number of Asian countries have seen a rise in access to electricity from a few percentage points to almost total availability in the last decade.
Such an unprecedented access to electricity is fundamental to their economic leap; meaning food can be stored in refrigerators, families now enjoy improved lifestyles hence lower population growth whilst small businesses operating cold stores, etc function uninterrupted – overwhelmingly, majority of this electricity has come from coal fuel.
In Ghana, the combined efforts of the Volta River Authority and independent power producers (IPP) – TAQA, Sunon-Asogli, Cen Power and the much awaited Ghana Gas Company (GCC) Atuabo gas processing plant, ensures that Ghana keeps up with energy demand growth, however, a lot more effort is still needed in respect of installed generation capacity and supply reliability, noting that, the West African Gas Pipeline (WAGP) has failed to deliver the contracted gas volumes.
Ghana is currently pursuing an energy policy based on hydro, oil/gas fired thermal and solar thermal generation, however, with current limited hydro resources and unreliable gas supply from WAGP, Coal must be pursued as a viable policy option in the generation mix.
With current worldwide policy direction, the IEA (2012) anticipates that by 2020, non-OECD countries will expand coal-fired power generation by a further 50 % with three-quarters (75 %) of global coal consumed outside OECD countries.
Such as expansion would bring industrial growth, economic emancipation and prosperity, and provide sufficient power to enable large numbers of the world’s population to enjoy improved standards of living.
It is therefore imperative for Ghana to craft a deliberate policy shift towards coal-power in its generation mix as an emergent strategy to take advantage of the windfall in coal supply availability and stable low prices to fast track its economic development even as it strives to migrate from a primary producer economy to agro-processing and product value addition.
Though the current global economic outlook remains gloomy, yet, over the long term, industry watchers are optimistic of energy demand growth in non-OECD countries, and these will lead to a strong coal demand growth worldwide.
The Long term concerns over coal use relate to its environmental impact particularly emissions of pollutants as stated below with mitigating factors.
The combustion of coal to generate power is inherently a dirty process, with the primary by-product being carbon dioxide (CO2) – a greenhouse gas.
High-temperature combustion also produces nitrogen oxides (NOx), both from nitrogen contained within coal and from the atmospheric nitrogen.
The sulphur content in coal emerges as sulphur dioxide after combustion, and converts into acid in the atmosphere potentially leading to acid rain if concentrations are high and emissions uncontrolled.
Incombustible mineral material in coal is left as ash and slag which must be disposed off harmlessly.
Nonetheless, other harmful trace metals such as mercury also escape into the atmosphere with the flue gas. Coal, with such a catalogue of unwanted by-products has earned a bad reputation (Breeze, 2005).
However, advances in emissions and waste control technologies have now made coal environmentally benign as possible.
Mitigating strategies have therefore evolved to control all the pollutants generated in a coal-fired power plant – these measures are extremely effective and whilst some are costly, others are cheap to implement.
It is therefore, imperative that Ghana adopts a coal strategy as part of its long-term energy policy to reflect global reality and its emission status under the Kyoto Protocol.
According to the International Energy Agency (IEA) (2012), in the non-OECD countries, gas will remain in third place behind coal and oil, with a 24 % share of primary energy by 2035.
India is currently the third largest coal user worldwide behind China and the United States.
India’s coal use, which increased by 90 % between 2001 and 2012, is expected to more than double by 2035 as it displaces the United States before 2025 as the world’s second-largest coal consumer.
Nonetheless, it is a fact that, energy and environmental policy will play a decisive role in future coal use.
However, in most countries pursuing aggressive economic development, coal use may be deliberately encouraged for sociological, economic and energy security reasons and this conclusion must reflect Ghana’s energy policy regime between now and 2035, and beyond.
Coal – the African scenario and lessons to Ghana
The African scenario with coal is not different from the global trend. Countries with vibrant economies in the likes of Botswana and South Africa derive 100 % and 93 % of their electricity from coal respectively.
Other names include Morocco – 50 % and Zimbabwe – 46 % (IEA, 2011). Botswana, a lower middle-income country has per capita usage of electricity of 1,358 kWh driven solely by coal whilst South Africa has 4,347 kWh (CIA Factbook, 2012); compare this to Ghana with 246 kWh. Senegal currently has the 125 MW Sendou coal-fired plant planned (CITAC, 2014).
Coal might be one of the world’s worst polluting primary fuels but provides 93 % of electricity supply in South Africa, making the country an elite economy in Africa – creating employment and lifting many households out of abject poverty.
According to Eskom’s Chief Executive, Brian Dames, South Africa has been very successful in using coal to grow the second largest economy in Africa – bringing prosperity to many and across the continent.
With total installed capacity of 45,700 MW, Dames (2011) argues that “South Africa will continue to use coal and these the country is absolutely not defensive about” – coal is a strategic resource and a game changer.
Underpinning the South African coal energy policy is first and foremost, energy security, affordability and energy supply access and availability – these pillars Dames (2011) argues are fundamental to economic growth, poverty alleviation and job creation, and lastly, the strategy is about how coal energy is generated in a cleaner and environmentally friendly manner.
Coal power like its nuclear counterpart, has the advantage of larger generation capacities – a generator can be as large as 2000 MW per unit with efficiency of up to 95 %.
A single nuclear power plant can be as large as 1600 MW. The proposed Asogli coal power plant has 350 MW per unit; compare this to 170 MW of each unit at Akosombo Hydro. A modern gas turbine output is limited to 265 MW per unit with a stretched thermal efficiency of up to 57 % (Breeze, 2005). Energy security has always been a major policy driver in advanced and emerging economies before consideration of lower carbon footprint technologies since the latter tends to be more expensive.
South Africa, now with a robust economy on the back of coal energy, plans to diversify its electricity generation mix of 93 % from coal, 3.5 % from one nuclear power plant and 3.5 % from hydro sources including a small wind station.
South Africa’s renewable energy industry is small, but as a policy, the country plans to expand renewable electricity capacity to 18,200 MW by 2030.
Current nuclear power installed capacity is 1,940 MW from one power plant in Koeberg and this is planned to increase to 9,600 MW by 2030.
An energy policy on coal for Ghana in the power generation mix will be strategic and spur on rapid national economic development against the background of rich mineral resources in gold, bauxite, diamonds and manganese, iron ore, limestone, kaolin and clay – some of which are yet unexploited.
Ghana’s huge natural resources require energy intensive industries to develop and hold the key to its rapid industrialization.
The 200,000 tonnes/year VALCO Aluminium plant still operates far below capacity due to insufficient power supply.
The Bosai Minerals Group investment of US$1.2 billion into Ghana to build modern Alumina Refinery Plant in the Western Region by 2014 to utilize bauxite from Awaso has not yet taken off and due partly to power supply challenges.
Therefore, the building of the 700 MW Coal-fired power plant is timely to bring hope to the aluminium industry, boost the national economy, create jobs and lift millions out of poverty in Shama, its environs and across Ghana. The time to pursue an aggressive coal policy is now.
Daniel K. Awate-Adamson (MSc, BEng), Ghana, Email:
