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Business News of Thursday, 3 April 2025

    

Source: www.ghanawebbers.com

The beginner’s guide to understanding energy transition

The Intergovernmental Panel on Climate Change (IPCC) defines "transition" as moving from one state to another over time. In energy transition, this means shifting to renewable energy and low-carbon technologies. The goal is to reduce environmental impact and enhance energy security.

This article explores the history of energy transition, its importance, Ghana's implementation, and its relevance. It aims to present these complex ideas clearly for everyone.

**Historical Context of Energy Transition**

Energy transition is not a new concept. Humanity has shifted energy sources multiple times throughout history:

- **Pre-Industrial Era:** Before machines, early societies used biomass like wood for heating and cooking.

- **First Energy Transition (18th-19th Century):** The Industrial Revolution marked a shift from biomass to coal. Coal-powered steam engines transformed industries and transportation.

- **Second Energy Transition (20th Century):** Oil and natural gas began replacing coal as the main energy source. Oil powered modern transportation while natural gas offered a cleaner alternative for electricity generation.

- **Third Energy Transition (Late 20th – 21st Century):** Growing environmental awareness led to increased use of renewables like solar and wind. The 1970s oil crisis highlighted fossil fuel vulnerabilities, prompting investments in alternatives.

**Key Factors Driving Recent Energy Transition**

Several factors have accelerated the recent energy transition:

1. **The 1970s Oil Crisis:** OAPEC imposed an oil embargo in 1973, causing price spikes and shortages. A second crisis in 1979 further destabilized energy supplies.

2. **Environmental Challenges:** The energy sector contributes nearly 73% of global greenhouse gas emissions. Governments are now prioritizing policies that promote renewable energy.

3. **Depleting Fossil Fuel Reserves:** As fossil fuels become harder to extract, there’s a push for sustainable alternatives like solar and wind power.

4. **Technological Advancements:** Technology has made renewable energy more efficient and affordable, increasing its competitiveness with fossil fuels.

5. **Government Policies:** Global agreements like the Paris Agreement set targets for reducing carbon emissions, leading governments to implement supportive policies.

6. **Corporate Demand for Sustainability:** Businesses are increasingly committing to net-zero targets and using renewable energy sources due to consumer demand for sustainability.

7. **Public Health Benefits:** Renewable energies reduce air pollution linked to health issues such as respiratory diseases.

**Ghana's Energy Transition Efforts**

Ghana is aligning with global efforts toward cleaner energy sources through several initiatives:

- In 2011, Ghana enacted the Renewable Energy Act aimed at developing renewable resources efficiently.

- In 2022, Ghana launched its Energy Transition Framework aiming for net-zero emissions by 2070.

- In 2024, President unveiled the Ghana Energy Transition Plan targeting net-zero by 2060 instead.

- The Bui Power Authority built a floating solar system on the Bui reservoir as part of expanding solar resources.

- Ghana also introduced a National Electric Vehicle Policy to promote electric vehicle adoption.

**Why Energy Transition Matters**

Energy transition is crucial for several reasons:

1. **Environmental Impact:** Burning fossil fuels releases harmful gases contributing to climate change. Renewable sources produce little or no emissions compared to fossil fuels.

2. **Energy Security:** A diverse mix of renewables ensures reliable and affordable energy supplies while reducing dependence on imports.

3. **Economic Growth & Job Creation:** Clean energy drives economic development by creating new industries and jobs in various sectors.

4. **Public Health Benefits:** Cleaner energies reduce pollutants linked to health problems, easing healthcare costs associated with pollution-related diseases.

**Challenges & Future Outlook in Ghana**

Ghana faces challenges in its transition:

1. **Limited Infrastructure:** The country relies heavily on fossil fuels with limited large-scale renewables installed.

2. **Financial Constraints:** Significant upfront investment is needed for renewable projects which can be challenging due to financial limitations.

3. **Weak Policy Enforcement:** Implementation delays hinder progress despite existing frameworks like the Renewable Energy Act.

To overcome these challenges, Ghana must invest in grid modernization and attract private sector collaboration while enhancing policy enforcement.

**Conclusion**

Energy transition is vital for a sustainable future in Ghana amid climate change risks and economic disruptions from fossil fuel dependency. Addressing infrastructure limitations, financial constraints, and policy enforcement will accelerate this process.

By modernizing systems and fostering innovation through effective policies like the Renewable Energy Act, Ghana can reap benefits such as job creation and improved public health while safeguarding future generations' well-being through reduced carbon emissions.