The energy sector is the lifeline in the development of any nation. This belief informed the decision to undertake the construction of the first hydroelectric (Akosombo) dam in 1965, which continues to be an important investment in Ghana’s economic history. Over the years with the increased demand by power users for greater security and reliability other sources of power – thermal, solar and lately windmills, as well as imports – have been added to the generation mix. The thrust of Government policy in the energy sector and Ghana’s oil find in commercial quantities is to push for a significant increase in its energy resources to become a net exporter of both power and fuel. The production of Ghana’s oil started in the year 2010.


The  energy  sector  in  Ghana  contributes  significantly  to  the  economy.  The  sector  can  be classified into two main sub-sectors; the Petroleum and Power Sub-sectors

Petroleum Sub-Sector

Ghana’s  petroleum  sector  involves  upstream  and  downstream  activities.  The  upstream activities include the exploration, development, production, procurement and refining of crude oil and the downstream activities include production, distribution and marketing of petroleum products and premixing of petroleum products for industrial uses, including fishing.

Distribution of petroleum products in Ghana is dominated by multinational oil marketing companies. Following the deregulation policy of the government, the oil marketing companies have increased in numbers to include several local Ghanaian companies. The products are retailed through gas stations which are either owned by the Oil Marketing Companies (OMCs) or private individuals. There are one hundred and thirty-eight (138) accredited oil marketing companies in good standing for business in Ghana. The private sector, including the OMCs and others source and supply finished products through an open competitive tendering system.

Power Sub-Sector

The focus of the policy is on expanding energy production to meet the needs of consumers of electricity and ensuring the extension of electricity to all areas of the country; the development of  the  newly  discovered  oil  and  gas  sector;  and  the  identification  and  development  of renewable energy sources to boost energy supply in Ghana. Also, there has been significant encouragement in the use of LPG as a substitute for wood fuel  (charcoal), as part of the programme  to  preserve  national  forests  and  halt  the  advancement  of  desertification  and climate change.

The power sub-sector involves the generation, transmission and distribution of electrical energy for industrial, commercial and domestic use in Ghana. The Power System of Ghana is run by seven public institutions. These are the Ministry of Energy (MOE), Energy Commission (EC), Public Utility Regulatory Commission (PURC), Volta River Authority (VRA), Ghana Grid Company (GridCo), Electricity Company of Ghana Limited (ECG) and the Northern Electricity Department Company (NEDCo), a subsidiary of the VRA.


Energy Sector Structure and Deregulation

Prior to the energy market reforms of the 1990s, Ghana’s energy market was state owned, vertically integrated and highly regulated. The Volta River Authority (VRA) was responsible for generation and transmission. The state-owned Electricity Company of Ghana (ECG) and VRA subsidiary the Northern Electricity Department Company (NED) were responsible for distribution to customers in the southern and northern halves of the country respectively.

Deregulation and reforms of the policy framework radically restructured the power utility sector to facilitate greater efficiency and competition. The roles and responsibilities of existing utilities were changed and new entities and regulators introduced to ensure the smooth running of the new market structure. The changes resulted in:

  • VRA  focusing  on  power  generation,  retaining  its  Akosombo,  Kpong,  and  Aboadze  power generation assets.
  • GRIDCo  being  spun  out  of  the  VRA  to  have  the  sole  responsibility of  independently  and impartially operating the transmission network.
  • NEDco and ECG continuing to focus exclusively on distribution.
  • The creation of the Public Utilities Regulation Commission (PURC) Act, 1997 (Act 538) which sets energy prices (rates and tariffs), monitors utility performance, promotes competition and focuses on balancing the interests of consumers and utilities.
  • The  formation  of  the  Energy  Commission  (EC)  Act,  1997  (Act  541)  which  awards  utility operating licences and sets performance standards.

Electricity  is the  dominant  modern energy form  used  in the  industrial  and service  sectors accounting for 69% of modern energy used in the two sectors of the national economy. The Ghana electricity supply industry is unbundled with separate jurisdictions and entities regarding activities of electricity generation, transmission and distribution.

Electricity generation is undertaken by the state-owned Volta River Authority (VRA), which operates the Akosombo Hydro Power Station, Kpong Hydro Power Station and the Takoradi Thermal Power Plant (TAPCO) at Aboadze. VRA is also a minority joint partner with TAQA, a private sector company which owns and operates the Takoradi International Power Company (TICO) thermal power plant also located at Aboadze. Bui Power Authority (BPA), another state- owned entity, is charged with the implementation of the Bui Hydroelectric Power Project. In addition, independent power producers have been licensed to build, own and operate power plants.

The structure of Ghana Energy’s market

The market and regulators, Public Utility Regulatory Commission (PURC) and the Energy Commission (EC) welcome Independent Power Producers (IPPs) to compete with existing utilities, and this is enabled by open access to the independent transmission network.

GRIDCO (Transmission)

GRIDCo was established in accordance with the Energy Commission Act, 1997 (Act 541) and the Volta   River   Development   (Amendment)   Act,   2005   Act   692,   which   provides   for   the establishment and exclusive operation of the National Interconnected Transmission System by an independent Utility and the separation of the transmission functions of the Volta River Authority (VRA) from its other activities within the framework of the Power Sector Reforms.

The grid transmission network connecting the main production to consumption centres has been modeled and categorized into five zones under the Ghana Grid Company (GridCo).

There are four voltage levels, in the power grid: 330kV, 225kV, 161kV & 69kV

The total length of the transmission line is 4315km, in which 330kV line (219km), 225kV line (73km), 161kV line (3,888km) and 69kV line (132km). There are 53 substations and about 100 transformers in the transmission grid of Ghana. It is expected in the power grid planning of Ghana that the 330kV backbone grid will form all over the country’s grid by 2020. The 161kV voltage level will serve as the regional transmission voltage.

GRIDCo’s main functions are to:

  • Undertake  economic  dispatch  and  transmission  of  electricity  from  wholesale  suppliers (generating companies) to bulk customers, which include the Electricity Company of Ghana (ECG), Northern Electricity Distribution Company (NEDCo) and the Mines;
  • Provide fair and non-discriminatory transmission services to all power market participants;
  • Acquire and manage assets, facilities and systems required to transmit electrical energy;
  • Provide metering and billing services to bulk customers;
  • Carry out transmission system planning and implement necessary investments to provide the capacity to reliably transmit electric energy; and manage the Wholesale Power Market.


The National Interconnected Transmission System (NITS) for electricity is owned and operated by the Ghana Grid Company (GRIDCO). GRIDCO is a state-owned company. The distribution of electricity is done by the Electricity Company of Ghana (ECG), a state-owned company, and the Northern Electricity Development Company (NEDco), a subsidiary of the Volta River Authority (VRA).

The  Energy  Commission  (EC)  and  the  Public  Utilities  and  Regulatory  Commission  (PURC) regulate  the  electricity  supply  industry.  The  Energy  Commission,  in  addition  to  being responsible for technical regulations in the power sector, also advises the Minister for Energy on  matters  relating  to  energy  planning  and  policy.  The  PURC  on  the  other  hand  is  an independent regulatory agency responsible for the economic regulation of the power sector with the mandate to approve rates for electricity sold by electricity distribution utilities.

The Ministry of Energy is responsible for formulating, monitoring and evaluating policies, programmes and projects in the energy sector. It is also the institution charged with the implementation of the National Electrification Scheme (NES) which seeks to extend the reach of electricity to all communities in the long term.

The current President Nana Addo Dankwa Akuffo-Addo announced a merger of the Ministries of Energy and Petroleum and Power to Ministry of Energy to bring about a sharper focus on the generation, supply and efficiency of power to match the growth the economy was experiencing.


Power Distribution

There are 3 distribution companies currently operating in Ghana, with some 69 Substations scattered around the country

  • lectricity Company of Ghana (ECG) – serves customers in the southern Ghana
  • Northern Electricity Distribution Company – serves the northern part of the country
  • En Clave Power – serves companies at the Tema free zone enclave


Figure 1: Generation Capacity

Total installed power capacity 4,674MW
Hydro Generation 1,580MW
Thermal Generation 3,071.5MW
Renewable Energy(Navrongo Solar PV plant and BXC Solar) 22.5MW

Target of 5000MW in the medium term by 2020

The government’s energy policy is embodied in the Strategic National Energy Plan 2006-2020. The policy aims to develop a sound energy market that would provide sufficient, viable and efficient  energy  services  for  Ghana’s  economic development through the formulation  of  a comprehensive plan that will identify the optimal path for the development, utilization and efficient management of energy resources available to the country.

The energy sector has been a vital component of Ghana’s industrial and socio-economic development.  In  this  regard,  the  sector has  been  undergoing  a  number  of  developmental initiatives to improve overall operational efficiency and supply security.

Ghana has relied mainly on hydro-power plants for electricity generation. A few thermal plants are used to regulate the peak load. However, recently the net demand for electrical power has been considerably greater than the supply.


Figure 2: VRA Installed Generation Capacity

Akosombo 1,020 900 Hydro Water
Kpong 160 140 Hydro Water
TAPCO-T1 330 300 Thermal Gas/LCO
TICO-T2 330 320 Thermal Gas/LCO
Mines Reserve Plant – MRP 80 0 Thermal Gas
Tema Thermal 1 Plant- TT1PP 110 100 Thermal Gas/LCO
Tema Thermal 2 Plant- TT2PP 49.5 45 Thermal Gas
Tema Thermal 2 Plant Expansion – TT2PP-X   38   32   Thermal   Gas
Kpone Thermal Power Plant- KTPP     220     200     Thermal     Gas/DFO
VRA Navrongo Solar Plant 2.5   Solar Sunlight
TOTAL CAPACITY 2,340 2,037    

*LCO – Light Crude oil / *DFO – Distillate Fuel oil / *HFO – Heavy Fuel Oil


Figure 3:

Bui Hydro 400 340 Hydro Water
Kar Power Barge 1 235 225 Thermal HFO
Kar Power Barge 2 470 450 Thermal HFO
Sunon Asogli Phase 1 200 180 Thermal Gas
Sunon Asogli Phase 2 Stage 1     180     160     Thermal     LCO/Gas
Sunon Asogli Phase 2 Stage 2     180     160     Thermal     LCO/Gas
Cenit Power Plant 110 100 Thermal LCO
Ameri Power Plant 250 230 Thermal Gas
AKSA 289 270 Thermal HFO
BXC Solar 20   Solar Sunlight
TOTAL CAPACITY 2,334 2,115    


The discovery of  significant oil and gas accumulations in 2007 and the commencement of production of the jubilee field in November 2010 were the most significant events in Ghana’s oil and Gas sector in the last 2000s. With the Jubilee, the floodgates appear to have opened to further investment/exploration activities. Ghana’s oil and gas sector is rapidly transforming on every front investment (both core and ancillary), scale of operations, discoveries and reserves, policy, legislation and new institutions.

Seismic Data coverage has increased: 2D seismic data totaled about 70,000-line kilometers in 2011, while 3D seismic coverage is over 24, Over 160 wells have so far been drilled in Ghana’s sedimentary basins.

Oil and gas companies that have explored onshore and offshore Ghana include Mobil, Shell, Volta Petroleum, Texaco, AgriPetco, Philips Petroleum, Amoco, PetroCanada, Arco, Agip, Nuevo Oil Company, Hunt Oil Company, Dana Petroleum, Santa Fe Energy Resources, Fusion, Devon Energy, Lukoil, Vanco Energy, Oranto Petroleum, Tap Oil, Ophir Energy, Afren Energy etc. IOCs that currently operate in Ghana include Kosmos Energy, Tullow, Anadarko, Sabre Oil and Gas Holdings, Hess Corporation, Vitol Upstream, Eni, AGM Petroleum Cola Natural Resources Limited, Medea Development Ltd holds, A-Z petroleum Products Ghana Limited, ECO Atlantic Oil and Gas Limited, etc.



The renewable energy sector is gradually growing to help increase power generation output. The government is committed to increasing the use of renewables to provide power in Ghana.

The Renewable Energy Act, 2011 (Act 832) was enacted to enable Ghana achieve a sustainable renewable energy mix and reduce our dependence on other sources of generation.

Government is committed to providing adequate, reliable and cost-effective electricity supply through timely power generation capacity additions and modernization of transmission and distribution infrastructure as well as ensuring universal access to electricity by 2020. The policy objective is to increase installed generation capacity from the current 4,674 MW to 5,000 MW by 2020.

Renewable Energy

The main policy issues in the renewable energy sub-sector are:

  • Low level of application of new renewables (small hydro, modern biomass, wind, solar, and bio-fuels) in the national energy mix
  • Over dependence and inefficient utilization of wood fuel resources.

Renewable Energy Policy Goals

The policy goals of the renewable energy subsector are:

  • Achieve 10% contribution of modern renewables (excluding large hydro and wood fuels) in the electricity generation mix by 2020.
  • Reduce the demand on wood fuels from 72% to 50% by 2020.
  • Promote development and use of other biomass technologies including biogas, biofuels, gasification and waste-to-energy.


Research has found that, driven by the growing affordability of LED colour TVs and other appliances (reflecting consumer aspirations for modern energy services), rural households in off-grid areas are willing to pay for quality solar energy services (World bank, 2016). Potential for solar energy production lies in the northern region and the northern parts of Brong-Ahafo and Volta Regions, where there are very high radiation levels received, with monthly average of between 4.4 and 6.5kWh/m2/day. Despite this abundance, solar power still contributes very little to energy production in Ghana.


Ghana has about 2,000MW of raw potential for wind energy. It is currently reliably projected that over 300 MW installed capacity of wind farm could be established at the coastal part to generate over 500 GWh to supplement the nation’s energy supply