World Resource Institute

Ghana Simulation: Power Sector Planning in a Changing Climate

According to climate models, rainfall predictions for Ghana in 2050 vary from 60% less than today, to 49% more. This enormous range of uncertainty has many implications for the West African country, including for the future development of a key sector, hydroelectricity generation. With these potential impacts in mind, this innovative WRR simulation took participants to imaginary Suna, a French-speaking country in West Africa. The country faces significant challenges, particularly endemic rural poverty and high levels of unemployment, but foreign direct investment-led industrialization has brought decent jobs to urban areas and a revenue stream for the government. The participants were asked to consider, in light of future uncertainties, whether to move forward with the construction of a major new dam, re-evaluate the project and decide at a later date, or to stop the project entirely.

The general instructions that the participants received, with detailed information about the decision they had to make, can be found here.


Participants played the roles of a wide variety of decision makers, represented on the placards in front of them.

Who
Three groups, composed of senior Ghanaian officials and government employees, took part in the Ghana simulation exercise. Each group conducted its discussions in a separate room. The participant who played the role as head of the National Planning Commission also served as moderator of the group. He was given special instructions to help encourage full participation and to help reach a decision about whether or not to build the new dam. The exercises lasted about four hours, and then all participants came together in a plenary session. Each group had a designated reporter who presented its decision.


In this simulation, participants had to decide whether or not to build a dam, given vast uncertainty over future rainfall patterns. Although the situation was fictionalized, the problem is quite real for decision makers in many parts of the world.

Exercise Outcomes
All the groups decided to go forward with the dam, each with some contingencies, made up of a mix of short, medium and long-term actions. Some wanted a very short re-evaluation of the climate study---4-8 weeks, not 6 months as presented as an option in guidance notes; others wanted provisions made to mitigate harm during construction, such as reforestation; and yet others wanted to begin looking at diversifying the energy mix in the country to lessen the dependency on hydro.There was discussion of alternatives to the dam, such as coal, as well as newer sources of electricity, like renewables. While none were rejected per se, all failed the key test for the participants---each was more costly for users compared to hydro. Coal was further discounted because of environmental impacts, though, within the context of the simulation, it would be the next option were the dam not be built.

All the participants acknowledged the potential of the worst case outlined in the instructions, in which the dam became more of a liability than a benefit. However, this outcome's low probability and the long time-frame before it might occur, coupled with the pressing need for more electricity, kept it from being a significant factor in the groups’ decisions.


All three groups chose to build the dam, despite acknowledging the climate-related concerns.

Conclusions
The issues presented by the Ghana simulation, while a hypothetical situation, are common to many developing countries. From the discussion of the three groups that took part, and from the free-flowing discussion about how the exercise helped participants think about issues facing Ghana, a number of key findings can be identified.

  • Meeting current development needs seems to trump most long term risks. It is important not to overstate this, but pressing human needs and the need to grow the economy dictate how potential risks are viewed. This is not to say that officials are reckless or that they disregard threats, it is simply that a low percentage, high impact risk that might occur 20-30 years in the future simply was viewed as having no legitimate claim to limited government resources.
  • Cost is a dominant factor in any major development decision. Ghanaian officials talk of pressing needs that must be met. If a project that might meet those needs and deliver, for example, some future environmental benefit but at a higher cost to the end user than another option, the low-cost option will prevail. An example would involve the need to expand electrical generation capacity, to provide power to those who do not now have it, to provide power to new industry and to ensure reliability of the electricity supply. Ghana has the ability to generate significant electricity from renewable sources, both wind and solar, and they are well aware of the environmental benefit. But hydro power is almost 50% less expensive to the end user, and coal about a third. Those choices will win out, all other factors being equal. Ghanaians are completely candid and unapologetic about that reality.
  • Among some officials, there is a certain skepticism about the validity of climate studies. To quote one official from the Energy Ministry: “These studies, there are so many. Most of the time we dismiss them.”
  • There is an underlying resentment among both government officials and civil society about the position the country finds itself in with regard to climate change adaptation. They see themselves forced to bear much of the burden of adapting to climate change impacts, even though Ghana’s CO2 emissions had been insignificant. Another official from the Energy Ministry put it this way: “Climate change issues are real and Ghana is at, unfortunately, the receiving end of the negative impacts.”
  • Climate change impacts that are specific to current needs or critical areas of the economy (i.e. providing reliable power; cocoa crop) have more “bite,” and are taken more seriously that non-specific, longer-term risks like sea level rise. Officials are aware of the real potential for sea level rise, but the threat does not elicit the same concern.
  • A planning time-frame of 50 years or longer, without interim updating opportunities, is simply not useful in decision making. Circumstances may change, new information becomes available, new technologies are developed. That forces decisions to be made with a shorter horizon.