Towards a Reliable and Sustainable Source of Electricity for Micro and Small Scale Light Industries in the Kumasi Metropolis

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Access to energy is a key factor in a country‟s socio-economic development agenda. Based on this premise, immediately after independence Ghana endeavoured to ensure that there is reliable and sustainable access to electricity. However, due to the increasing demand for electricity and the effects of climate on the Hydro Electric Power (HEP), Ghana‟s electricity supply has been rendered unreliable and unsustainable. The situation is expected to be more critical in the coming years since demand for electricity is expected to increase considerably by 2030. Thus, there is a growing demand for alternatives that neither depend on the weather nor fossil fuel for survival. The thrust of this study was to contribute to the discourse in search for alternatives that can continuously supply the electricity needs of micro and small scale industries (MSI) for productive activities. The search for the alternatives was preceded with an examination of the effects of Ghana‟s electricity supply and tariffs structure on the operations of MSIs. The study directly interviewed 320 MSIs and 8 institutions for primary data with the help of questionnaires and interview guides to supplement secondary data from literature. The study identified that Ghana‟s intermittent electricity supply is a major challenge to the MSIs. Some of the MSIs interviewed have acquired alternative sources of electricity such as petrol/diesel-powered generators to ensure continuous supply of electricity with extra operational costs ranging from GH¢10.5 to GH¢16.5 every month besides the perceived high tariffs they paid to the Electricity Company of Ghana (ECG). Consequently, 82.5 per cent of the entrepreneurs wished for a more reliable and sustainable source of electricity. The study further revealed that Ghana has identified the solution to the intermittent power supply to lie with the exploitation of five non-conventional Alternative Sources of Electricity (ASEs). Subjecting the five ASEs to further analysis revealed that solar energy can immediately be used to supply the MSIs‟ electricity needs. However, its exploitation is constrained by the lack of legislative instruments, high cost and thefts of movable parts. Based on these challenges, the study recommended the immediate passing of the renewable energy bill into law to serve as a regulatory framework for solar energy development. Additionally, the study recommended for the adoption of flexible terms of payment to enable the industrialists to pay for the solar system.
A Thesis Submitted to the Department of Planning, Kwame Nkrumah University of Science and Technology Kumasi,In Partial fulfilment of the requirements for the Degree of Master of Science in Development Policy and Planning, 2010