FEED-IN OF EXCESS ENERGY AND SELF CONSUMPTION: NEW REGULATIONS IN GHANA S ENERGY SECTOR JULIUS NKANSAH-NYARKO ENERGY COMMISSION

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1 FEED-IN OF EXCESS ENERGY AND SELF CONSUMPTION: NEW REGULATIONS IN GHANA S ENERGY SECTOR JULIUS NKANSAH-NYARKO ENERGY COMMISSION NOVEMBER 20, 2014

2 PRESENTATION OUTLINE Overview of Ghana s Energy Situation Renewable Energy Resources Regulatory Framework Renewable Energy Law FIT Scheme RE Fund Net Metering Scheme Bioenergy Policy SE4ALL Initiative

3 OVERVIEW OF GHANA S ENERGY SITUATION Electricity Access (Sept 2012) 74% Electricity Installed capacity (2013) 2,851.5MW Electricity generation (2013) 12,870 GWh Crude oil production (2013 ave.) 83,126b/day Renewable Energy Resources: Solar energy kwh/m 2 /day Wind energy (along coast) 4.5 m/s 6.1 m/s at 60 metres height Hydro 2,500MW (1,580 exploited) Bui hydro power 400MW completed

4 SOLAR RESOURCE

5 Monthly Average Wind Speeds at 60m

6 HYDRO RESOURCE

7 SMALL AND MEDIUM HYDRO POWER Pwalugu: DEVELOPMENT 50MW proposed Hydro Power Plant Feasibility Studies being conducted by VRA with support from AfDB Juale: 50-90MW integrated Hydro Power Plant under consideration Joint Implementation Committee between Ghana and Togo established Pre-feasibility study being undertaken Hermang: 93MW proposed capacity BPA, China Water and GOG Pre-feasibility study being undertaken

8 BIOENERGY RESOURCES Total Wood supply for fuel 30.7 million tonnes/annum Woodfuel supply Municipal waste Wood residue Animal waste 8 million tonnes /annum 2 million tonnes/annum; 2 million tonnes/annum 11 million tonnes/annum. Entire land cover has potential for energy crop / biofuel cultivation.

9 REGULATORY FRAMEWORK Renewable Energy Act, 2011 (Act 832) To stimulate massive investment into the renewable energy sector. Bioenergy Policy and Strategy To develop and promote the sustainable supply and consumption of bioenergy to ensure energy security for Ghana. Ghana SE4ALL Action Plan In response to the UN Secretary General Sustainable Energy For All Initiative.

10 SOME PROVISIONS OF THE RE ACT The FIT Scheme consists of: FIT rate Renewable energy purchase obligation Connection to the distribution and transmission systems Renewable Energy Fund Net Metering Scheme Biofuel Promotion

11 FEED-IN-TARIFF (FIT) RATE A FIT rate shall give preferential/special price to electricity generated from renewable energy sources. technology being used in the renewable energy industry, costs associated with construction, commissioning, operation and maintenance of the plant, reasonable rate of return on investment, and balance between the interest of the consumer and the investor. The FIT rate fixed shall be guaranteed for a period of ten years and subsequently be subjected to review every two years. The FIT rates approved by Public Utilities Regulatory Commission shall be published in the Gazette and in at least one national daily newspaper.

12 CURRENT FEED-IN TARIFF RATES

13 RENEWABLE ENERGY PURCHASE OBLIGATION 3 Power Distribution Utilities ECG and NEDCO state owned companies Enclave Power private company 33 Bulk Electricity Customers In specifying the percentage level of electricity the Public Utilities Regulatory Commission (PURC) shall take into account the: technology being used to generate electricity from the RE source. net effect of the cost of renewable energy on the end user tariff.

14 RENEWABLE ENERGY PURCHASE OBLIGATION - PENALTY An electricity distribution utility or a bulk customer that fails to purchase electricity for RE source shall pay a premium. Where an obligated entity fails to pay the premium: the permit obtained by the bulk customer to purchase electricity from a wholesale supplier shall be suspended. A fine of 5,000 penalty units shall be imposed on the bulk customer.

15 CONNECTION TO TRANSMISSION AND DISTRIBUTION SYSTEMS An operator of a transmission or distribution system shall connect a generator of electricity from RE sources within the coverage area of the transmission or distribution system where a generator of electricity from RE source so requests. An operator of a transmission or distribution system shall: upgrade the transmission or distribution system at reasonable economic expense to feed in electricity from the RE source. upgrade the system as soon as practicable if so requested by a generator interested in feeding- in electricity from the RE source.

16 CONNECTION TO TRANSMISSION AND DISTRIBUTION SYSTEMS The cost associated with connecting installations to the metering point of the grid shall be borne by the generator of electricity from RE sources. An operator of a transmission or distribution system shall enter into a connection agreement with a generator of electricity from RE sources. An operator of a transmission or distribution system that commits an offence under his section is liable on summary conviction to a fine not exceeding 10,000 penalty units.

17 RENEWABLE ENERGY FUND The RE Fund has been established under the Act to provide financial resources for the promotion, development and utilisation of renewable energy resources. Moneys from the Fund shall be applied For provision of financial incentives, capital subsidies and equity participation for: Grid interactive renewable electricity. Mini-grid and off-grid renewable power systems for remote areas and islands. RE projects for non-electricity purposes. For the promotion of: Scientific, technological and innovative research into renewable energy. research into the establishment of standards for the utilisation of renewable energy. the production or fabrication of equipment for the development and utilisation of renewable energy in the country. For Capacity building

18 RENEWABLE ENERGY FUND Sources of money of the RE Fund: Moneys approved by Parliament Premiums Donors Moneys approved EC Board from the Energy Fund Levy from the export of biofuel Moneys provided by the Minister responsible for Finance.

19 NET METERING A billing related mechanism designed to encourage electricity consumers to supplement their purchase of electricity with grid-connected renewable energy self-generation Facility owners are credited for electricity the facility supplies to the grid, and this credit is set off against electricity purchased from the Distribution Utility Designed for applications where the renewable energy generation is not being used as a back-up to the main source of power supply Generally for power cost reduction and/or climate change mitigation It is not designed to be an income generating mechanism for the renewable energy generation facility owner

20 NET METERING SCHEME Connection Agreement: A Customer-generator and the Distribution Utility shall enter into a Connection Agreement The total generating capacity of a net-metered facility shall be limited to 200kW per installation The Customer-generator shall apply to the Distribution Utility for connection The Customer-generator shall bear the cost of the reversible meter to be provided by the Distribution Utility

21 NET METERING SCHEME Compensation And Billing: For every kwh that the Customer-generator exports in excess of its consumption, it would receive a credit of 1 kwh in the billing period For each billing period, the Distribution Utility shall carry over any excess kwh credits earned by a Customer-generator and apply those credits to subsequent billing periods to offset the Customergenerator s consumption in those billing periods until the end of the Calendar year All taxes, levies and charges approved by the Public Utility Regulatory Commission shall be paid by the Customer-generator based on its total electricity consumption Excess kwh credits shall not be used to defray any fixed monthly Customer charges or levies or taxes Excess kwh credit accrued to the Customer-generator at the end of one calendar year shall be forfeited

22 BIOENERGY POLICY AND STRATEGY The goal of the bioenergy sub-sector is to develop and promote the sustainable supply and utilisation of bioenergy to ensure energy security for Ghana whilst maintaining adequate food security Strategic Environmental Assessment on the Bioenergy Policy and Strategy has been conducted and is to be submitted to Cabinet for approval

23 BIOFUEL PROMOTION The Minister shall designate biofuel blend as a petroleum product in accordance with the National Petroleum Authority Act, 2005 (Act 691). The National Petroleum Authority shall price biofuel blend in accordance with the prescribed petroleum pricing formula provided for under Act 691. The proportion of biofuel in biofuel blend offered for sale to consumers at the point of sale shall be determined from time to time by the National Petroleum Authority.

24 CONCLUSION The Government has created the enabling environment to ensure the attainment of its 10% RE target in the national energy mix by 2020 with the passage of the RE Act. It would require the effective support of the development partners, bilateral, multilateral and indeed the private investors to ensure the successful implementation of the favourable regulatory framework in a winwin situation.

25 THANKS!!!