Please! Stop the Construction of the Bui Hydro Dam.

In June 2006, the Government of Ghana concluded arrangements with Sino-Hydro Company of China for the construction of Bui Hydro Dam on the Black Volta, a tributary of the Volta River. The Dam is estimated to cost $600 million and expected to add 400 megawatts of power to the country’s installed capacity. Construction work on the project will begin the middle of next year.

The idea of a dam at the Bui site to provide electricity and irrigation was first examined in the 1960's. This made sense at the time. It was a period when “Rostowian” economic thought prevailed and mega power projects were seen as capable of giving a “big push” to the economies of newly independent countries to take off. Today, most economists will consider such thought as “conventional foolishness.”

Both in strategic and economic sense, there is no basis to move the construction of this project forward. The decision becomes even more difficult to comprehend when one adds environmental issues, geological uncertainties associated with dam construction and the unpredictable rainfall at the sources of the Volta River to the equation.

Strategically, Ghana’s electricity supply, in its current form, has a mix that is heavily tilted to hydro sources and is therefore vulnerable to unnecessary force majeure. This vulnerability is further heightened by the fact that that all of the country’s current hydro power supply comes from a single river system – the Volta River.

Currently, the Volta River is the source of 60 per cent of Ghana's electricity. The construction of Bui will further increase the country’s dependency on the Volta River system for its electricity. As well, it will raise the share of hydro power in the country’s supply mix. This, to me, is visionless! Developing Bui may be motivated by good intentions but, as the saying goes, “the road to hell is littered with good intentions.”

Unlike Akosombo and Kpong generating facilities, the proposed Bui facility is located far away from a large number of electricity consumers, therefore, it will require long distances of transmission for its power to reach consumers. This will result in high transmission and distribution losses. Against this background and the recurring low water levels of the Akosombo Dam, one cannot understand why substantial resources will be committed to the project.

I am not surprised the Ghana Government is accessing a Chinese loan to finance the project. Energy investors these days shy away from financing big hydro electricity projects. In general, such projects are expensive and take about 7 – 10 years to construct and are notoriously prone to cost overruns because of the time frame it takes to build them. Additionally, they are also vulnerable to geological uncertainties. This makes accessing financing from traditional sources to finance these types of projects difficult.

Recent developments in power generation and transmission technologies make investments in large power plants like Bui unnecessary. For example, technologies now exist for net metering. Net metering allows consumers of power to take power from the grid and also add power to the grid. With such technology, the country can adopt a national energy plan that encourages the development of small power projects that require low levels of investments. These projects can be located across the country and closer to transmission corridors. Because of their low capital requirement, individuals, communities, cooperatives and firms can invest in them to serve their power needs and make available surplus power to the national grid.

Electrical power can be generated by burning anything that burns including the sawdust produced at our sawmills and carpenter shops, agricultural residues such as coconut shell and husk, groundnut shells, rice straw and husk etc which are readily available in the country. Power can also be generated by burning crops which are grown specifically for that purpose. These sources and many others are available to small power projects in the country.

Hydro power plants can still play a vital role in the country’s energy plan, however, the focus should be on developing small hydropower installations instead of mega power projects like Bui. The VRA has done a good job of identifying hydro resources for small and mini-hydropower installations at 40 prospective hydropower sites in the country that can be developed.

What Ghana needs is an energy plan that challenges in a fundamental way the country’s current electricity investment decision making and supply choices. This can be reasonably done in a well laid out integrated and sustainable energy plan that focuses on a diversified supply mix with many small manageable generating facilities rather than expensive and unreliable large power facilities.

Bui Dam is a misplaced national priority and must be abandoned. It is a classic case of an energy investment decision not backed by an energy plan. The resources committed to the project can be better used to provide affordable and reliable supply of electricity to consumers.