AN OPTIMAL ENERGY MIX INVESTMENT FOR GHANA

Abstract

This study aimed at finding a minimum cost of investment in Renewable Energy (RE) sources, specifically in Hydro, Wind, Solar and Biomass that will meet projected demand levels in specific time periods in the future and ensure a modest (10%), (20%) or an ambitious (30%) incorporation of these renewable energy sources. To do this, a relevant optimization model was formulated and discussed. The Levelized Cost of Energy (LCOE) model adopted for the purpose was also discussed in detail. Projected demand cases were assumed or envisaged and each discussed under three specific scenarios (C1, C2 and C3). Secondary data from Volta River Authority (VRA) and other relevant sources were presented and ran using risk optimizer 6.3 software to generate the required solutions. The results showed that for the projected demands of energy to be met with (10%) share from RE, greater output would be from Wind, followed by Hydro, Solar and Biomass together with the existing plants to meet incremental demand. For (20%) share, Wind and Solar would contribute more whiles for (30%) share, Solar and Hydro would contribute more. The study further revealed that the optimal costs of producing power to meet the projected demands under C1, C2 and C3 were $30,525M, $25,085M and $23,119M respectively. The results illustrated that there is a reduction in the cost of power production from scenario C1 to C3 in all the demand cases, an indication that when more of RE sources are incorporated into Ghana’s current generation mix, the cost of producing power to meet incremental demand could be substantially reduced. Among the recommendations offered was that, since RE investment incur low generation cost due to little or no fuel cost, the government should placed emphasis on the development of RE generation to meet incremental demand for energy at minimum cost in the country.