Commentary

Renewable energy: Antidote to Ghana’s energy security

BY EDMOND KOMBAT, DIRECTOR OF RESEARCH & FINANCE, INSTITUTE FOR ENERGY SECURITY.

Of all the optimistic futuristic dreams, a world of clean, renewable energy to combat climate change, is perhaps the closest to realization, thanks to the growing acceptance of and demand for renewable energy. Not so long ago, energy transition was an idealistic concept driven largely by researchers and environmentalists, with the most important drawback being the high cost associated with the deployment of clean energy technologies. But decade-long cost reduction trends and spending, coupled with government policies have reinforced the broad consensus that renewables were vital for the global transition to a low or zero-carbon economy.

Following the signing of the Paris Agreement in 2015, clean energy investment grew by only two percent a year, in the five years following the pact. But since 2020, the pace of growth has accelerated significantly to 12 percent. Spending on clean energy has been underpinned by fiscal support from governments and aided by the rise of sustainable finance, especially in advanced economies.

The drastically reduced price of Photovoltaics, PV, commonly referred to as solar panels and wind turbines for instance, has ensured global attention for solar and wind energy. A similar situation is unfolding concerning emissions-free hydrogen production, also called “Green” hydrogen. Already, today and even more in the very near future, renewable energies will be the only reasonable and feasible power source for both industrialized and developing countries, because of rising concern over energy security, climate change and affordability. Over the past three years, renewable energy has recorded some interesting developments within the broader energy system, with a promising uptick in growth, leading to a small reduction in global Carbon dioxide, CO², production from the electricity sector as noted by the International Renewable Energy Agency.

The International Energy Agency’s “World Energy Investment” Report published in May, 2020, is a description of a drastically changed energy markets in the wake of the coronavirus pandemic. Another Report from the institute on Global Energy Review, 2020, indicated that renewable energy has so far been the energy source, most resilient to Covid-19 lockdown measures.

According to data released in April, 2021 by the International Renewable Energy Agency the world added more than 260 gigawatts (GW) of renewable energy capacity in 2020, despite the Covid-19 pandemic, exceeding expansion in 2019, by close to 50 percent. Renewable electricity capacity additions broke another record in 2021, despite the continuation of Covid-19 induced logistical challenges and increasing prices for new solar PV’s and wind installations. Again, according to the International Energy Agency’s (IEA’s) latest Renewable Energy Market Update, the world added a record 295 gigawatts of new renewable power capacity in 2021, overcoming supply chain challenges, construction delays and high raw material prices.

As of today, renewables were the only energy source that posted a growth in demand in the first quarter of the year, 2022. Solar PV is on course to account for 60 percent of global renewable power growth in 2022, followed by wind and hydropower. Going forward, there are estimates that 90 percent of the world’s electricity can be produced from renewable energy sources by 2050. While renewables continued to be deployed at a strong pace even during the Covid-19 crisis, there are looming market uncertainties, increasing the challenge to grow clean renewable energy at the expected pace, capable of meeting long-term climate and sustainability goals. Clean energy spending in emerging and developing economies, excluding China, remains stuck at 2015 levels, with no increase since the Paris Agreement was reached. This means that while the rich countries are pouring money into cleaner technologies, the energy transition largely bypasses fewer wealthy nations and regions like Africa, a continent that is most vulnerable to climate change impacts. Definitely, much more needs to be done, in collaboration with international development institutions, to boost these investment levels and bridge widening regional divergences in the pace of energy transition investment.

The lack of strong policies, subsidies, incentives and regulations that favour renewable energy technologies is what will hinder its wide growth in the years ahead. To attract investors and reduce the cost of renewables, the market needs more clearer policies and legal procedures, incentives and subsidies. While global cooperation and coordination is critical, domestic policy frameworks must urgently be reformed to streamline and fast-track renewable energy projects and catalyze private sector investments.

Africa and Ghana for that matter needs to develop packages of incentives for faster deployment of renewables, as some of the most important actions governments can take to address today’s energy security and market challenges, while keeping alive the possibility of reaching our international climate goals.