The document discusses a study on the costs and benefits of electrifying rural Ghana, revealing that while 85% of Ghana's population had electricity access in 2019, still about 67.2% of rural areas remained unelectrified. The study analyzes three electrification options: grid expansion to less remote areas, solar and diesel microgrids for more remote communities, and grid expansion to all communities with populations above 100. Findings indicate that grid expansion is the most cost-effective solution for less remote areas, while solar and diesel microgrids, although more expensive, may be viable for remote communities.

1. EminentPanelConference,Accra,August7th -9th,2020
PRELIMINARY FINDINGS:
The costs and benefits of electrifying rural
Ghana
Francis Kemausuor, Kwaku Amaning Adjei, John Bosco Dramani, Prince
Boakye Frimpong
Kwame Nkrumah University of Science and Technology, Kumasi

2. Background and problem definition
• Ghana is one of a few countries in sub-Saharan Africa with relatively
higher access to electricity
- 85% access in 2019
- Largely achieved through grid extension
• Urban communities have achieved universal access to electricity
• Some rural communities remain to be electrified
- Approximately 67.2% electrified as of 2018
- Comprehensive plan and policy available for island communities
- Some remote communities may pose challenges with the status quo

3. Background and problem definition
• According to the Ghana Statistical Services (2019), electricity access
across the north of the country is less than 70%.
0
10
20
30
40
50
60
70
80
90
100
National
grid
connection
(%)
Region

4. Background and problem definition
• Apart from island communities, Ghana has traditionally used grid
extension to provide electricity access
- Remaining unelectrified communities are rural, with some possibly remote
communities
• Extending the grid may not always be the most cost optimized
electrification option. The technical feasibility may depend on several
factors such as:
- terrain of the location
- distance to existing grid
- size of loads
- local availability of resources (both fuel and human resources)

5. Background and problem definition
• The end game is to have a system that is:
- technically feasible
- addresses the required demand
- reliable
- has potential to contribute to poverty reduction
- support the achievement of the SDGs

6. Objectives
• The aim of our research was to model electrification options for
unelectrified rural communities in Ghana, from the perspective of
costs and benefits. Three interventions were studied as follows:
- Grid expansion to communities for which the grid is the most cost-effective
solution
- Solar and diesel micro-grids to suitable remaining communities
- Grid expansion to remaining communities of more than 100 households

7. Methods
Spatial Analysis Spatial Analysis and Planning
Demand Analysis Load forecasting
Network options Optimization of supply options
Distributed Energy Standalone Systems
Output: Rural electrification blueprint for the target study area

8. Method (Benefits side)
• The benefits of electrification are estimated using two distinct
approaches: difference-indifference (DD) and propensity score
matching (PSM).
-In the DD, we aggregate the data into district-level averages (thus
converting it into panel data), and running the estimation at the district-level.
-We compared the outcomes of households who are electrified with those who
are not by using data from the 2005/2006, 2012/2013 and 2017/2018 GLSS.
-Propensity scores were calculated using the baseline values of the main
outcome variables as well as other household and community level
characteristics.
-Finally we used difference in means estimator when the analysis is focused on
the benefits of mini grids.

9. Intervention 1
Expanding electricity grid to less remote communities

10. Grid extension as most cost optimized option for less remote
communities

11. Population electrified and cost indicators
4,547
5,315
4,551 4,619 4,559
4,061
5,032
9,436
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2020 2021 2022 2023 2024 2025 2026 2027
Population
Population electrified per year
Indicator Cost Unit
Distribution / locality 73,658 US$
Connection / locality 145,157 US$
Total Investment / locality 218,815 US$
Total Investment / inhabitant 411 US$
•For base case, 45% of
communities in
district suitable for
grid extension
•Project to be
undertaken by
Ministry of Energy
- Communities could
support, using similar
arrangements like SHEP

12. Discounted costs and benefits per household over 20 years (GHS)
- Increased income represents ~80% of the benefit
- Improved health the remaining 20%

13. Intervention 2
Solar and Diesel microgrids for ‘more remote communities’

14. Solar and diesel micro-grids

15. Implementation
• Current government policy require that mini-grid development from
design to operation will be public sector led
- Private sector participate only through contracts for services, such as
construction
- Mini-grids are globally more expensive to construct, but could be sensible in
remote communities
- Tariffs are as approved by PURC and charged to grid customers
• No regulation to whip up private sector interest
- Private sector participation could increase the speed of implementation

16. Discounted costs and benefits per household over 20 years (GHS)
- More expensive than grid extension
- BCR much lower, compared to grid extension

17. Intervention 3
Expanding electricity grid to more remote communities

18. Extend grid to all communities with population above 100

19. Why this intervention?
• Traditionally grid extension preferred on mainland
• Ministry of Energy expressed interest in seeing results for such
analysis due to existing working model
• Costing model ‘forced’ to extend electricity grid to all communities
with population above 200
- Costs are much higher per capita
Indicator Cost Unit
Distribution / locality 58 538 US$
Connection / locality 223 738 US$
Total Investment / locality 282 276 US$
Total Investment / inhabitant 679 US$

20. Discounted costs and benefits over 20 years (GHS)
- Benefit cost ratio much lower

21. Comparing interventions and concluding

22. Thank you