Innocent S.K. Agbelie is a PhD candidate at the Institute of Statistical, Social, and Economic Research, University of Ghana pursuing PhD in Development Studies. His research interest covers sustainable development, climate change, sustainable energy, green economy, productive energy, firm behavior, and gender analysis on which he has co-published some articles, technical reports, and blogs. His most recent research activities include co-producing an ‘eCookBook For Urban Ghana’ and a ‘Consumer Needs, Behavior, and Expectation Survey on MECS in Urban and Peri-Urban Ghana’ reports under the World Bank funded Modern Energy Cooking Services (MECS) Project at ISSER led by Prof. Bawakyillenuo. For his PhD thesis, he has investigated ‘Firms’ decisions on energy systems utilization and their implications on performance from 2015 to 2021: The case of businesses in the Greater Accra Region of Ghana’.
According to the Intergovernmental Panel on Climate Change, keeping global warming below 1.5°C is necessary for human continuous survival because each of the last four decades has been successively warmer than any decade that preceded them since 1850 due to anthropogenic factors. Central to achieving this target is Goal 12.6 of the SDGs which encourages intentional transformation of world economies from fossil-fuel dependent economies to green economies, where the utilisation of renewable energy and energy efficiency technologies drive growth and development. This green agenda is, however, threatened by scholars who argue that Africa will need its newly discovered oil and gas resources to expand its economies, significantly lift millions of its citizens from poverty trap, and close the gap between itself and the developed world. Businesses, like governments all over the world, are therefore faced with the important decision of investing in the right energy systems that are either friendly to the environment, facilitate growth or both. In the local context, Ghanaian enterprises are very reliant on the national grid system for their electric power needs, supported by own power generations. However, there is very little evidence on the utilisation of RETs by Ghanaian firms despite the abundance of RET resources and the fact that RETs are fast becoming the lowest-cost sources of power generation in recent times. After sampling 404 businesses and 15 key informants in the Greater Accra Region, the study explored the fundamental reasons behind Ghanaian firms’ energy decisions, and how their financial and environmental performances are consequently affected from 2015 to 2021.
Blackouts and voltage fluctuations are undesirable energy services of the grid system that limit the productivity of capital and labour factors. The firms in the Greater Accra Region experienced these unwanted services for about 621 and 1,070 hours per month during the power crisis era. The fixed-effects regression results reveal that blackout hours decreased both financial and environmental performances of firms in the power crisis (2015-2017) and post-crisis (2019-2021) eras, whereas the environmental performance of firms was negatively
affected by firms that use generators. On the other hand, energy efficient machinery, lighting, and air-conditioning systems are useful energy services that are as important as capital, labour, information technology (IT) and research and development (R&D). These factors were positively associated with the financial and environmental performances of the firms from 2015 to 2021.
The grid system was overwhelmingly subscribed because it was regarded as a relatively cheaper and guaranteed system with sheer monopoly presence that makes it every firm’s first choice. About 22% of the firms used generators because they can afford to do so, and because of the unreliability of the grid system. Alternative systems like renewables were less utilised because of their high upfront and maintenance costs. Beyond costs, the lack of trust in RETs due to very few well-functioning systems in existence and poor-quality installations, unsupportive policies, and shallow knowledge of the technologies among businesses have greatly limited the popularity, and use of RETs among firms in the region. Renewable energy policies should be tailor-made to enforce international standards in RET materials importations and installations while targeting the grassroot stakeholders for RETs educational campaigns. There should also be an industrial energy efficiency strategy targeting the firms’ machinery systems for sustainable productivity.
Keywords: energy systems, RETs, energy efficiency technologies, enterprises, performance.