To construct, transfer or acquire a renewable energy project, an investor or owner would require approval from the Energy Commission. Prior to constructing a renewable energy project, investors would have to put in an application for the requisite licence required for the renewable energy project in question.
What government authorisations must investors or owners obtain prior to constructing or directly or indirectly transferring or acquiring a renewable energy project?
Licences are generally required for commercial activities in the renewable industry sector relating to production, transportation, storage, distribution, sale and marketing, exportation and re-exportation, installation and maintenance.
Offtake arrangements
What type of offtake arrangements are available and typically used for utility-scale renewables projects?
The type of offtake arrangement used for utility scale renewable energy purchase is a power purchase agreement (PPA). A public utility is, however, prohibited from negotiating a PPA with a generator of electricity or to contract power from a renewable energy source unless the contracted power has gone through an open and competitive procurement process.
The major offtaker in Ghana is the Electricity Company of Ghana (ECG). ECG satisfies its payment obligations through the cash waterfall mechanism in which it pays its debt by distributing the revenues from the sale of the electricity proportionately among the relevant energy sector players involved in the electricity supply value chain.
Procurement of offtaker agreements
How are long-term power purchase agreements procured by the offtakers in your jurisdiction? Are they the subject of feed-in tariffs, the subject of multi-project competitive tenders, or are they typically developed through the submission of unsolicited tenders?
Electricity procured from a wholesale supplier shall be procured in accordance with the annual energy supply and demand plans and must be done through a competitive procurement scheme consisting of a tendering process and an auction scheme. A public utility shall not negotiate for a PPA with a generator of electricity or contract power for electricity generated from a renewable energy source unless the contracted power has gone through an open competitive and transparent procurement process.
Operational authorisation
What government authorisations are required to operate a renewable energy project and sell electricity from renewable energy projects?
To operate and sell electricity from renewable energy projects, one would have to obtain a licence from the Energy Commission. It is important to note that a separate licence is required for each commercial activity within the renewable energy supply chain.
Decommissioning
Are there legal requirements for the decommissioning of renewable energy projects? Must these requirements be funded by a sinking fund or through other credit enhancements during the operational phase of a renewable energy project?
As part of licensing requirements under the Renewable Energy License Manual, applicants for licences are required to make and implement adequate arrangements and adhere to prescribed procedures for undertaking decommissioning programmes for the plant or any process that may affect safety and the environment.
They are also required to submit any prescribed programmes and arrangements for decommissioning of the plant or part thereof for prior approval by the Energy Commission. Decommissioning should also conform with the relevant Environmental Protection Agency guidelines.
Ferociter – Jessica Twumasi, Sarpong Odame and Yaa Boatemaa Ohene-Bonsu
