:ENERGY END-USE INEFFICIENCY AND THE GHANAIAN EXPERIENCE

AHMED SALIM NUHU writes

:ENERGY END-USE INEFFICIENCY AND THE GHANAIAN EXPERIENCE
‘…Even the ECG office in your area runs on three solid generators and you are here complaining about power shortage…-
unknown’’
In the wake of frequent power outages in
country, I present this paper on what I
consider the consumers’ role in the
‘sustainable electricity shared responsibility’
with evidence from available literature on
the Ghanaian energy use experience.
There is no denying the fact that
sustainable energy is the basis of
industrialisation and that the economy
cannot be effectively restructured without
an efficient energy sector, both on the
demand and the supply side. Evidence from
the case of Fan Milk Ltd which cut its
planned investment by $5.8m in March
2014 as a result of the frequent power
outages, suggests that energy challenges
can have severe unanticipated
consequences on the mother economy. This
challenge is however, not only faced by
manufacturing industries as mining and
other extractive firms lose huge sums of
revenue during such periods just as the
service sector does. Frequent power cuts
lead to underutilisation of resources in
industry, low productivity levels, higher
production costs, and rise in general price
level, fall in government tax revenues,
budget deficits and attendant monetary
policy conundrums.
Whilst government has over the years,
demonstrated commitment towards
revamping the sector and placing it in a
position to meet our current energy needs,
it is vitally important that the consumers
also ensure efficient use of energy.
Consumers must begin to assess the
genuineness their energy demands. This
assessment has become exigent in the light
of the fact that energy demand has more
than quadrupled over the past three
decades (The Energy Commission, 2013).
Whilst some may attribute growth in
electricity consumption to expansion in
economic activity, available data indicates
that GDP over the same period has merely
doubled, implying a huge percentage of
electricity generated has not been
channelled into productive ventures, but
rather has been wasted (Agyarko 2010).
Again, whilst population growth, rapid
urbanisation etc. may also be blamed for
rising energy demands, Levine, et al (1995)
are convinced that growth in electricity
consumption needs to be tackled by
increasing electricity efficiency.
In a country where energy options such as
solar, wind and thermal are not readily
available, adopting measures to enhance
electricity end-use efficiency, so as to
reduce energy supply requirements will be
fundamental to our success in the fight
against power outages.
Consumers of electricity need to know that
unlike water and natural gas, electricity
cannot be easily stored. Energy is stored in
the fuel itself before it is converted to
electricity. Once converted, it has to go out
on the power line-and enters your homes
to power the TV sets and kitchen
appliances. Therefore anytime you sleep
with your TV on, your unused charger or
any electrical appliance on, you call for an
immediate conversion of the fuel into
electricity, increase the demand and your
bill irrationally. Also, you do not only
exacerbate the dumsor crisis but you
increase government subsidy payments as
well. These inefficiencies in energy use,
even raises more serious concerns about
government subsidies on electricity tariff.
Because even though they are aimed at
protecting consumers, they also aggravate
fiscal imbalances, crowd-out priority public
spending, and depress private investment,
including in the energy sector.
To this effect, I believe it will only be in our
interest as consumers of electric power,
whether families, firms or farms to ensure
that there is some compliance with efficient
use of energy. Just as inefficiencies have
negative effects on individuals and the
economy, efficient energy use tend to have
a healthy rebound effect on the economy.
Efficient energy consumers do not only pay
lower electricity tariffs, but also save in
income, spend on other goods and services
and collectively contribute to expanding the
size of our economy. Additionally,
government saves subsidy payment, invest
in other areas such as health, education,
security and ultimately development of
more sustainable energy sources.
But in all, whilst consumers resolve to
abide by energy efficiency standards, it is
also expected that stakeholders such as the
Ministry of Energy, the Energy Commission,
the VRA, ECG, GRIDCo and more particularly
the PURC and Energy Foundation intensify
their efforts at increasing energy efficiency
awareness amongst consumers. This I
believe will ably assist in cutting down on
‘artificial high energy demand’ and in its
small way, lend a short to medium-term
solution to our energy challenge.
The writer, AHMED SALIM NUHU, is a
student of economics in KNUST and a policy
analyst at the Research Centre for Economic
Policy and Development, Ghana. Contacts
ahmedsalimnuhu@gmail.com or
+233246591181