Ghana's Renewable Energy (Amendment) Act, 2020 (Act 1045)
Parliament recently passed the Renewable Energy (Amendment) Act, 2020 (Act 1045) to amend the Renewable Energy Act, 2011 (Act 832). Act 1045 creates a competitive procurement scheme that consists of a tender and auction process to attract competitive market rates for electricity generated from renewable energy sources. As a result, public utilities are permitted to negotiate for a power purchase agreement with generators of electricity or contract power for electricity generated from renewable energy sources only when the contracted power has gone through an open competitive and transparent procurement process.
Further, under Act 1045 fossil fuel-based wholesale electricity suppliers, fossil fuel producers and other companies that contribute to greenhouse gas emissions are required to invest in non-utility scale renewable energy to offset the emissions and mitigate the impact of climate change. The level of the non-utility scale renewable energy and technology required to be invested will be determined by the board of the Energy Commission in consultation with the Public Utilities Regulatory Commission and the distribution utilities. The Amendment Act also created a net-metering scheme to encourage self-generation of electricity from renewable energy sources on a power cost reduction or a climate change mitigation basis and not for income generation.
It is expected that the implementation of this Amendment Act will promote renewable energy, reduce the burden of high tariffs on consumers, and ensure that utilities complement Ghana’s efforts in mitigating climate change.