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KITEKITE

KITEKITE innovating clean energy solu tions…. FEASIBILITY STUDY REPORT ON DOMESTIC BIOGAS IN GHANA – REVISED

innovating

clean energy solutions….

FEASIBILITY STUDY REPORT ON DOMESTIC BIOGAS IN GHANA REVISED DRAFT

Submitted by KITE to the Shell Foundation

March, 2008

Table of Content

Table of Content

i

List of Tables

iii

List of Figures

iv

List of Acronyms and Abbreviations

v

Executive Summary

vii

1 INTRODUCTION

 

1

1.1

BACKGROUND TO THE STUDY

1

1.2

OBJECTIVES

3

1.3

RESEARCH METHODOLOGY

4

1.4

THE SCOPE OF THE STUDY

4

1.5

BRIEF PROFILE OF HOUSEHOLDS

5

2 COUNTRY CONTEXT

 

7

2.1

GEOGRAPHIC AND DEMOGRAPHIC CHARACTERISTICS

7

2.2

AGRICULTURE SECTOR OVERVIEW

9

2.3

ENERGY SECTOR OVERVIEW

10

3 BIOGAS TECHNOLOGIES IN GHANA

15

3.1

HISTORICAL OVERVIEW

15

3.2

TYPES OF BIOGAS DIGESTERS IN GHANA

16

3.2.1 The Floating Drum Digester

16

3.2.2 The Fixed Dome Digester

17

3.2.3 The Puxin Biogas Digester

19

3.2.4 Conclusion

 

20

3.3

BIOGAS SERVICE PROVIDERS

20

3.4

THE COST OF BIOGAS DIGESTERS

21

3.5

LIKELY CHALLENGES TO BE FACED BY THE BIOGAS INDUSTRY

23

4 MARKET POTENTIAL OF BIOGAS IN GHANA

24

4.1

TECHNICAL POTENTIAL OF BIOGAS

24

4.1.1 Resource

Availability

24

4.1.2 Access to Water

27

4.2

WILLINGNESS AND ABILITY TO PAY

28

4.2.1

Willingness to Adopt and Pay for Biogas

28

4.3

ABILITY TO PAY FOR BIOGAS PLANT

30

4.4

FINANCIAL ANALYSIS

34

4.5

ECONOMIC ANALYSIS

37

5 STAKEHOLDERS ANALYSIS

38

5.1

PUBLIC SECTOR INSTITUTIONS

38

5.1.1 Ministries, Departments and Agencies

38

5.1.2 Research Institutions

40

5.2

CIVIL SOCIETY ORGANISATION (CSO)

40

5.2.1

Non-Governmental Organisations (NGOs)

40

5.3

THE PRIVATE SECTOR

42

5.3.1

Micro Finance Institutions

42

5.3.2

Bio-digester Construction Companies

42

5.3.3

End Users

43

6 ASSESSMENT OF THE SUPPLY CHAIN

44

6.1

RESEARCH AND DEVELOPMENT

44

6.2

DESIGN AND CONSTRUCTION

45

6.2.1

Technical Experts

45

 

6.2.2 Availability of construction materials

45

6.2.3 End-use Appliance

46

6.3 MONITORING AND MAINTENANCE

46

6.4 FINANCING DOMESTIC BIOGAS SYSTEMS

47

7 BUSINESS MODEL FOR PROMOTING DOMESTIC BIOGAS IN GHANA

49

7.1

INTRODUCTION

49

7.2

PROPOSED BUSINESS MODEL FOR GHANA

50

8 CONCLUSIONS AND RECOMMENDATIONS

54

8.1

CONCLUSIONS

54

8.2

RECOMMENDATIONS

56

REFERENCE

58

ANNEXURE

60

Annex 1: Study Methodology

60

Annex 2: Biogas Initiatives in Ghana

64

Annex 3a: Cost Breakdown of Fixed Dome Digesters

68

Annex 3b: Cost Breakdown of Fixed Dome Digester

69

Annex 3c: Cost Breakdown of 10m3 Fixed Dome Digester

70

List of Tables

Table 1-1: Regional Distribution of Respondents

5

Table 2-1: Contribution of Agriculture to GDP (2000-2006)

9

Table 2-2: Livestock Production in Ghana (Values in 1,000s)

9

Table 2-3: Percentage Contribution of Biomass to Total Energy Consumption by Selected Sector 10

Table 3-1: Profile of Selected Biogas Service Providers

21

Table 3-2: Cost Breakdown of 6m³ Fixed-dome Biogas Digester

22

Table 4-1: Distribution of Cattle Population in Survey Regions

24

Table 4-2: Household Use of Cow Dung

26

Table 4-3: Willingness to Release Dung for Biogas Production

27

Table 4-4: Household Access to Water in the Survey Regions

27

Table 4-5: Household Knowledge about Biogas Technology

28

Table 4-6: Household Willingness to Pay for Bio-digesters

29

Table 4-7: Reasons for Indecision

30

Table 4-8: Purchase of durable household product in the past year

33

Table 5-1: Potential NGOs and Possible Roles

42

Table 6-1: List of Micro-Finance Institutions in Surveyed Regions

47

List of Figures

Figure 2-1: Map of Ghana Showing Administrative Regions

7

Figure 2-3: Electrification Trends in Ghana

14

Figure 3-2: Schematic Drawing of Chinese Fixed Dome (Left) & Completed CFD Digester in Accra

18

Figure 3-3: CFD Digester under Construction (left) and CFD Being Repaired (Right) (Courtesy REES)

19

Figure 3-4: Set up of Puxin Digester (left) Schematic Description of Puxin Slurry-based Digester (right)

19

Figure 3-5: Construction of 10m3 Puxin Digester at Private Residence in Accra (Courtesy Beta Construction Ltd)

20

Figure 4-2: Sensitivity of FIRR to Price of Biomass

36

Figure 4-3: Sensitivity of FIRR to Subsidy

37

Figure 7-1: Business Model for Promoting Domestic Biogas in Ghana

50

List of Acronyms and Abbreviations

ADB

African Development Bank

AIF

Agriculture Investment Fund

AREED

African Rural Energy Enterprise Development

ARI

Animal Research Institutes

CSIR

Council for Scientific and Industrial Research

CWSA

Community Water and Sanitation Agency

CSO

Civil Sector Organisation

DANIDA

Danish International Development Agency

DfID

Department for International Development

FGD

Focus Group Discussion

EC

Energy Commission

EIRR

Economic Internal Rate of Returns

EPA

Environmental Protection Agency

FAO

Food and Agriculture Organisation

FIRR

Financial Internal Rate of Returns

GAMA

Greater Accra Metropolitan Authority

GCSS

Garden City Special School

CDM

Clean Development Mechanisms

GDP

Gross Domestic Product

GHG

Green House Gasses

GIMPA

Ghana Institute of Management & Public Administration

GNADO

Gia/Nabio Agro Forestry Development Organisation

GPOBA

Global Partnership on Output Based Aid

GPRS

Growth and Poverty Reduction Strategy

GLSS

Ghana Living Standard Survey

GNA

Ghana News Agency

GoG

Government of Ghana

GRATIS

Ghana Regional Appropriate Technology Industrial Service

GSS

Ghana Statistical Service

GTZ

German Technical Cooperation

HIPC

Highly Indebted Poor Countries

IAP

Indoor Air Pollution

ICT

Information & Communications Technology

IDA

International Development Agency

IIR

Institute of Industrial Research

ITTU

Intermediate Technology Transfer Units

KfW

German Bank for Reconstruction

KITE

Kumasi Institute of Technology, Energy and Environment

KNUST

Kwame Nkrumah University of Science and Technology

KVIP

Kumasi Ventilated Improved Project

LPG

Liquefied Petroleum Gas

MASLOC

Micro Finance and Small Loans Centre

MDG

Millenium Development Goals

MFI

Micro Finance Institutions

MLGRDE

Ministry of Local Government, Rural Development and Environment

MoE

Ministries of Energy

MOFA

Ministry of Food and Agriculture

MOFEP

Ministry of Finance and Economic Planning

NDPC

National Development Planning Commission

NGO

Non Governmental Organisation

NPO

Non Profit Organisation

RTIP

Roots and Tuber Improvement Program

RTTC

Regional Technology Transfer Centres

SARD

Sustainable Agriculture and Rural Development

SEND

Social Enterprise Development

SMIDO

Suame Magazine Industrial Development Organisation

SNV

Netherlands Development Organisation

SPSS

Statisitical Package for Social Scientist

UDS

University for Development Studies

UER

Upper East Region

UNDP

United Nations Development Programme

UN-ESCAP

United Nations Economic and Social Commission for Asia and the Pacific

US

United States

UWR

Upper West Region

VALCO

Volta Aluminium Company

WFP

World Food Programme

Executive Summary

Harmful environmental, health and social effects associated with the use of traditional biomass as cooking fuel within poor households have led to the search for alternative cleaner burning fuels. Domestic biogas is one such technology that has been successfully promoted as substitute for woodfuels in several developing countries in Asia. This report presents the finding of a study conducted by the Kumasi Institute of Technology and Environment (KITE) to assess the feasibility of pursuing a market- based, enterprise-centred approach to the large scale deployment of domestic biogas plants in rural Ghana with emphasis on the three northern regions, and the Ashanti Region. These four regions were selected after a pre-feasibility study conducted in April 2007 by KITE puts them on top as the regions with the highest potential for domestic biogas systems.

A combination of quantitative (household surveys and new analysis of nationally representative data) and qualitative survey techniques (focus groups discussions and key informant interviews) were employed to gather and analyse the information used in preparing this report.

The main conclusions of the study are as follows:

It is technically possible for about 80,000 households in the four regions to install at least one 6m 3 fixed dome digesters in their homes to take care of their daily cooking energy needs. The market potential (estimated based on the ability and willingness to pay) is however lower representing about 10% (8,000) of the theoretical potential. However, this market potential does not currently exist and will have to be developed and grown.

The price of the 6m 3 fixed dome digester in Ghana ranges between US$1,200 and US$2,600 according to quotations given by 4 biogas service providers. The investment cost is several times higher than in several Asian and Eastern African countries where the technology has been commercialised.

A customer investing US$2,600 in a 6m 3 domestic digester and making an annual savings of US$245 will earn a FIRR of -2% over the 15 years lifespan of the digester assuming an interest of 10% compared to a FIRR of 21% to be earned by his counterpart investing US$1,200 in a digester of the same capacity. This means that there is an inverse relationship between the investment cost of biogas digesters and the profitability (defined by the FIRR)

of the investment. The FIRR is more sensitive to variations in the cost of the plant than it is to the variations in the expected benefits of the investment.

There is very little or limited in-country experience with regards to domestic biogas plants as majority of existing biogas plants are bio-sanitation projects located in urban centres.

The current supply chain for biogas digester is weak and characterised by few entrepreneurs located in two major cities. The manpower base (the number of trained technicians/artisans) is also weak and appears inadequate to handle huge volumes of demand for the digesters.

On the basis of current lack of existing demand for biogas digesters, the high digester costs and weak supply chain, it can be concluded that commercialisation of domestic biogas systems in the survey area in particular and Ghana in general is not feasible at the moment. However, the decision to invest in the biogas technology should not only be based on the profitability or otherwise of the investment since the non-direct financial benefit to the household and the overall benefits to the society at large provide the economic justification for public intervention that will create the necessary enabling environment to kick-start the development of the domestic biogas market.

A social business model focusing on technical training, business development, financing and market facilitation as its main components and based on the concept of private-public partnership (PPP) is recommended as the way forward for Ghana towards harnessing and commercialising its biogas potential.

In addition to the above recommendation regarding the adoption of PPP, the following recommendations are also worthy of consideration:

There is the need for comparative research study to be conducted as a matter of urgency to assess the relative costs and benefits associated with the promotion of LPG as a cooking fuel in the rural areas vis a vis those of biogas systems. The findings of this evidenced-based study should be used as a policy advocacy tool to lobby government to assign the promotion of domestic biogas in rural areas as a substitute for woodfuels a central role in the country‟s rural household energy programme.

We recommend that research should be carried out by the Institute of Industrial Research (IIR) and other research institutions to come up with a

standardised digester type suitable for adoption in a national domestic biogas programme. If it is established that the fixed dome digester is the cost effective model as the study has shown, then further research and development work would have to be carried out to help reduce the investment cost without compromising on output, reliability and durability.

( I can see why this is important for a programme based approach, however in a consumer led, market based economy the consumer often wants choice and variety and therefore one biogas digester wouldn‟t meet everyone‟s needs)

There is also the need for the design and institutionalisation of a comprehensive tailor-made training programme for technicians, artisans and owner operators who are going to be involved in the design, construction, operation and maintenance of the biogas digesters once constructed. This is intended to produce a critical mass of manpower resources that will be required to support large scale roll out of domestic biogas digesters in Ghana. In the medium to long term, a short course on biogas technology should be included in the curriculum of engineering and technical students in the Polytechnics and Technical institutes to help train middle level technicians to become supervisors.

The national biogas programme should be packaged as a CDM project to help attract carbon funding, which could be used, inter alia, as seed capital for micro-financing and/or other loans and credit schemes to be instituted under a biogas promotion programme.

Finally it is highly recommended that a „champion‟ should be identified and designated to play the role a of a market facilitation organisation tasked with the responsibility of initiating and coordinating the implementation of the recommendation s from this feasibility report.

1

INTRODUCTION

1.1 Background to the Study

An estimated 2.4 billion people, representing more than a third of the world‟s population, rely on biomass (wood, charcoal, crop residue and dung) for cooking and heating. Current trend suggests that another 200 million people will be dependent on biomass to meet their thermal energy needs by 2030 (Warwick and Doig, 2004). The heavy dependence of a large segment of the population on biomass fuels has been recognized as a major obstacle to their socio-economic development. One major problem associated with the excessive reliance of woodfuels is indoor air pollution (IAP) caused by smoke generated as a result of incomplete combustion of woodfuels. The thick acrid smoke from stoves and fires inside homes is one of the four leading causes of death and disease in the world‟s poorest countries. The main victims of death from exposure to IAP are women and children. Smoke from cooking is estimated to cause 10 million premature deaths among women and children in African by 2030 (Science, 2005).

Apart from the health hazards the traditional use of woodfuels inflict on women and children, rural women and their families are known to pay a high economic price for keeping the “fire burning” in their homes. It is estimated that a minimum of two to three mornings a week is spent by many rural women collecting wood fuel. The situation is getting worse with stock of woodfuel resources, including agricultural waste and residue rapidly declining. Although the time spent collecting wood fuel may not cost them money in real terms, it has been established that this perpetual toil casts a long shadow over their lives. It denies poor rural women the chance to be more productive through paid work that would raise their family‟s income, improve the standard of living and enhance their nutritional and health status.

The over-dependence and utilization of woodfuels is also known to have contributed partly to deforestation and emission of some greenhouse gases. According to a study by the University of California, Berkeley and the Harvard School of Public Health 1 , smoke from cooking fires will release about 7 billion tons of carbon in the form of greenhouse gases to the environment by 2050 in Africa alone. That is about 6% of the total expected greenhouse gases from the continent.

1 See April 1 issue of the Journal “Science”

There are a number of options for ameliorating the myriad of harmful effects associated with traditional uses of wood fuels, including behavioural change, improved kitchen ventilation, sustainable production of biomass, efficient wood/charcoal stoves and the use of cleaner fuels. However, the most effective way of dealing with the problems, especially that of IAP, is to switch to cleaner burning fuels, such as Liquefied Petroleum Gas (LPG) and kerosene that produces significantly lower emissions. And although switching to cleaner fuels offer the first-best solution, current economic conditions and energy infrastructure in developing countries, such as Ghana, make petroleum-based fossil fuels an unlikely option; commercial fuels, such as LPG, are in most cases deemed more expensive and not always available. Consequently, affordable alternatives that are cleaner and more sustainable, and also reduce women's workload are needed.

Biogas digesters, which convert animal dung, human excrement and other organic materials into combustible biogas, offer one such technically feasible alternative, since the gas generated can be used in simple gas cooking appliances. Substituting conventional cooking material such as woodfuel, briquettes or dung cake, with biogas not only saves money, but also reduces the workload of mostly women and girls involved in collection or preparation of these traditional energy sources. Equally important is the virtual elimination of the IAP associated with the use of traditional cooking fuels and appliances. Furthermore, the bio-slurry discharged from the biogas installation retains all nutrients as originally present in the feeding material, and is an excellent organic fertilizer. The bio-slurry can either be used directly or composted with other organic farm residue. Thus a biogas plant can improve the health and living conditions of women and children, reduce the use of firewood, enhance soil fertility and agricultural production, reduce the emission of greenhouse gases and creates new jobs and a new business sector.

It is the fascinating prospects of these multiple benefits accruing to households and communities (mainly in rural areas) that inspired the development and launching of the “Biogas for Better Life: the African Initiative” in October 2006. The vision of the initiative is to succeed in African countries, as a market oriented partnership with governments, private sectors, civil society agents and international development partners. It aims to provide 2 million households by 2020 with biogas digesters, business opportunities, improved household livelihood (good health, sanitation, food security, environment and new jobs). It offers households opportunity to own, control and operate sustainable energy for their own kitchens at affordable costs. The very essence of the initiative consists of companies selling biogas plants to households who are willing to buy. The initiative will support the supply chain as well as stimulation of demand.

The Biogas for Better Life initiative will focus on programmes in countries / provinces in Africa that provide the best market opportunities, in “pockets of opportunity” with

an ultimate aim of developing a sustainable, commercial biogas sector so as to enable

households to have a better life. One important criterion for selecting countries to benefit from the initiative is the existence of a short-term technical potential for the establishment of between 10,000 and 20,000 biogas plants over a period of 5 years. Preliminary analysis by the Netherlands Development Organisation (SNV) has shown that 24 countries in Africa, including Ghana, have the technical potential for building a minimum of 100,000 biogas plants; total technical potential for all 24 countries is estimated at 17.5 million biogas digesters. Based on availability of domestic cattle,

presence of water, scarcity of woodfuel, population density and temperature, the SNV study estimates that Ghana has a technical potential for establishing 278,000 biogas digesters (Biogas for Better Life: an African Initiative, Business Plan 2006-2020, May

2007).

A pre-feasibility study conducted by KITE in April 2007 revealed that the three

Savannah regions Northern, Upper East and Upper West by virtue of the fact that they are the leading producers of cattle in Ghana, have the greatest potential for promoting domestic biogas systems. The pre-feasibility consequently recommended that full feasibility study should be conducted in these areas to ascertain the full market potential in these regions as well as in the Ashanti Region. Although the Ashanti region did not have a lot of cattle, it was included mainly because of its large commercial poultry production and the relatively high income levels of households.

1.2

Objectives

The purpose of the study is to evaluate the feasibility of pursuing a market-based, enterprise-centred approach to the promotion of biogas plants in Ghana with emphasis on the three northern regions, and the Ashanti Region. The study will also help to assess the macro environment factors that would impact the biogas business.

The study has the following specific objectives:

i. To understand who the target market are, what their profiles gender, current fuel usage, geographic location, income, product usage, demographics, buying behaviours and needs of this customer segments are in order to develop an appropriate market segmentation strategy;

ii. To assess competing sources/supply chains of other energy sources for the target market;

iii. To calculate both the Financial and Economic Internal Rate of Return (FIRR/EIRR) on the biogas plant;

iv.

To analyse current supply chain capacity and propose a number of potential business model options that would best meet the target consumer demands and needs that have been identified;

v. To appraise the support mechanisms and systems required to foster the biogas market. These mechanisms/systems could include appropriate financing options (such as credit and subsidy schemes, where necessary), business development assistance for supply chain partners, fiscal incentives such as tax breaks/concessions, and an enabling policy and regulatory environment that ensure a level playing field.

vi. To design a marketing and financial strategy for pursuing an enterprise- centred approach to the promotion of biogas in the four regions, with a view to expanding the market throughout Ghana wherever market opportunities exist if the outcomes of the feasibility study is a win-win situation.

1.3 Research Methodology

The study combined both quantitative and qualitative methods of research and analysis. Due to resource and time constraints, limited household surveys were conducted in the regions. The results of the household surveys were augmented with findings from key informant interviews and focus group discussions with specific stakeholder groups. New analysis of existing nationally representative data was also conducted to validate the information collected through the limited household surveys. Detailed description of the methodological approach used to conduct the feasibility study can be found in Annex 1 in the Annexure.

1.4 The Scope of the Study

The feasibility study covered 206 households drawn from 26 predominantly rural communities in 18 districts in the four study regions. Table 1-1 gives the regional breakdown of the survey communities. In addition to the household surveys, a total of 6 focus group discussions (2 discussion groups per community) involving a total of 45 livestock holding households were held in three additional communities selected at random in the three northern regions. These communities, which were not covered in the household surveys, are Sang in the Yendi District in the Northern Region, Wiaga in the Builsa District in the Upper East Region, Sabuli in the Jirapa District in the Upper West Region. Key informant interviews involving over 25 individual experts and representatives of NGO‟s such SNV, NewEnergy, etc and technical institutions such as GRATIS Foundation, IIR, Endurance Works, etc were

also conducted as part of the study. The list of institutions and individuals interviewed is presented in Table A-1 in the Annexure.

Table 1-1: Regional Distribution of Respondents

Region

District

Communities

No. of Respondents

Upper West

Wa East

Bulenga

14

 

Nadowli

Bussie

11

 

Fian

4

 

Sissala West

Jeffisi

11

 

Sissala East

Kong

6

 

Wallembele

15

Upper East

Garu-Tempane

Kugzua

11

 

Builsa

Batuisa

2

 

Buadam

5

 

Fumbisi

9

 

Kassena-Nankana

Doba

6

 

Chiana

12

 

Chuchuliliga

8

 

Bawku West

Tilli

13

Northern

West Gonja

Kapilbe

4

 

Bussunu

8

 

Monpani

5

 

Zabzugu

Kandin

5

 

West Mamprusi

Nasia

10

 

Central Gonja

Fufulso

9

 

Tolon-Kungbugu

Lungbunga

7

Ashanti

Atwima Nwabiagya

Akropong

4

 

Kumasi

Metropolitan

Nsenie

6

Assembly

 

Ejisu-Juaben

Onwe

13

 

Ahafo Ano North

Mabang

5

 

Bosomtwe- Kwanwoma

Twindurase

3

Total

18

26

206

Source: KITE Survey 2007

1.5 Brief Profile of Households

Majority (90%) of the household heads were male with the rest being females. Fifty percent (50%) of the household heads were stark illiterates, 44% were educated up to the secondary level, with 4% having acquired tertiary education. About 96% of the household heads were engaged in one form of agriculture related activity or the other as the main occupation; only 4% indicated that there were civil servants or private

entrepreneurs. Agriculture is the main source of income for about 86% of the household heads. The remaining 14% are engaged in other income earning activities such as petty trading, artisans (masonry, hairdressing, etc) and bar operators in addition to farming or animal husbandry. Majority (83%) of the household heads lived in their own houses majority (64%) of which had mud/earth as the main flooring material with 30% having concrete floors. Sixty-two percent of the houses are roofed with corrugated iron sheets while 29% had thatch roofing.

In keeping with nationally representative statistics, groundwater (exploited through boreholes and hand-dug wells), followed by water from natural sources (rainwater, rivers and streams) and pipe-borne water are the three main sources of water supply among the households. Similarly the energy consumption pattern of the households was consistent with national data with 98% of households relying on woodfuels firewood (79%) and charcoal (19%) as their main cooking fuel. In the case of lighting, 60% of the households rely on kerosene for lighting with 38% relying on grid electricity.

2 COUNTRY CONTEXT

2.1 Geographic and Demographic Characteristics

Ghana (formerly known as the Gold Coast) is located near the equator and on the Greenwich meridian between latitude 4 0 and 12 0 N and longitude 30 0 W and 1 0 E. It is bounded by the Atlantic Ocean to the south, Cote d‟Ivoire to the west, Burkina Faso to the north and Togo to the east. Ghana has a total land area of 238,540km which is demarcated into ten administrative regions with Accra as the capital as shown in Figure 2-1.

regions with Accra as the capital as shown in Figure 2-1. Figure 2-1: Map of Ghana

Figure 2-1: Map of Ghana Showing Administrative Regions

The country is divided into six agro-ecological zones on the basis of their climate, reflected by the natural vegetation and influenced by the soils. These agro-ecological zones from north to south are: Sudan Savannah Zone, Guinea Savannah Zone, Transition Zone, Semi-deciduous Forest zone, Rain Forest Zone and the Coastal

Savannah Zone. The four regions covered in the feasibility study are located in savannah (Northern Region Guinea Savannah; Upper East and West Sudan Savannah) and semi-deciduous (Ashanti) zones.

– Sudan Savannah) and semi-deciduous (Ashanti) zones. Figure 2-2: Agro-Ecological Zones in Ghana Climatic

Figure 2-2: Agro-Ecological Zones in Ghana

Climatic conditions differ for each of the different agro-ecological zones. The Tropical Eastern Coastal Belt is warm and comparatively dry, the southwest is hot and humid and the north is relatively hot and dry, compared with the other parts of the country. Mean annual temperature in Ghana rarely falls below 25°C, which is very ideal for the production of biogas.

Rainfall in Ghana generally decreases from South to North with mean annual rainfall ranging from 800 mm in the Coastal Savannah to 2,200 mm in the Rain Forest. The rainfall pattern is uni- modal in the Sudan and Guinea Savannah Zones and bi-modal in all the other zones.

The 2000 Population and Housing Census, puts Ghana‟s population at 18.9m, an increase of 53.8% over the 1984 population of 12.3m, which translates into an intercensal growth rate 2.7% (GSS, 2002). Ghana has a population density of 79.3 persons per sq/km. While the figure suggests no great pressure of population on land, it obscures regional and district differences in concentration of the population and a different picture emerges when regional figures are considered. For example, the population densities of the three most densely populated regions are as follows:

Greater Accra Region (895.5), Central Region (162.2) and Ashanti (148.1) persons per square kilometre respectively. The population densities for the three other study regions are Upper East 104.1, Upper West 31.2 and Northern 25.9. Majority of the population of Ghana (56%) live in rural areas with the remaining 44% living in urban areas. Apart from Greater Accra (87.7%) and Ashanti (51.3%), the rest of the country remains predominantly rural, in spite of the substantial increase in the level of urbanization since 1984 (43.8% compared to 32% in 1984) 2 (GSS, 2000).

2 Indeed, none of the remaining 8 regions has a level of urbanization that is above the national average.

2.2

Agriculture Sector Overview

Agriculture is the mainstay of the Ghanaian economy, accounting for an average of 36% of GDP and 35% of export earnings since 2000. The sector is also a major source of livelihood for up to 60% of the country's labour force who are predominantly engaged in subsistence agriculture. Crops and livestock, followed by the cocoa sub- sector have consistently accounted for the bulk of the share of agriculture to GDP as shown in Table 2-1.

Table 2-1: Contribution of Agriculture to GDP (2000-2006)

 

2000

2001

2002

2003

2004

2005

2006

Crops And

22.01

22.25

22.43

22.35

22.12

23.8

23.8

Livestock

Cocoa Sub-sector

4.81

4.58

4.36

5.77

7.60

4.6

4.7

Forestry &

3.89

3.92

3.94

3.95

3.98

3.6

3.4

Logging

Fishing

4.57

4.49

4.42

4.30

4.24

4.1

4.0

Total

35.27

35.24

35.15

36.38

37.94

36.0

35.8

Source: GSS/MoFEP, 2007

Ghana is the second leading producer of cocoa globally and until recently when cocoa was displaced by gold, the commodity had been the major foreign exchange earner for the country. The livestock industry is a major sub-sector in the agricultural sector contributing an estimated 7% (in direct product) to the agricultural GDP (FAO, 2006). Cattle, sheep, goat, pigs and poultry are the main livestock produced in Ghana, with the poultry industry being the largest and most successful. Although both large and small-scale livestock production exists in Ghana, the latter dominates animal husbandry in Ghana. Large farms are more prevalent in the country‟s middle and coastal belts as well as near large urban centers. Table 2-2 shows the total livestock population in Ghana from 1980 to 2006.

Table 2-2: Livestock Production in Ghana (Values in 1,000s) Year

Species

Cattle Sheep & Goat Pigs Poultry Total

1980

1990

2000

2002

2006

804

1,145

1,302

1,330

2,750

3,875

4,242

5,820

6,150

13,297

379

474

324

310

1,463

11,500

9,686

20,474

24,251

22,984

16,558

15,547

27,920

32.041

40,494

Source: FAO, 2005a and GSS, 2008

The table shows that total livestock in Ghana as at 2006 is a little over 40 million and that poultry, sheep and goat, and cattle are the three most dominant species. The table is also a pointer to the availability of feedstock for the generation of biogas through anaerobic digestion.

2.3 Energy Sector Overview

Ghana‟s energy sector is characterized by huge dominance of traditional biomass resources. In terms of endowment and utilization, biomass (mainly woodfuels firewood and charcoal and to a lesser extent crop residues) is the most important primary energy resource in Ghana accounting for an average of 69% of total primary energy and 63% of final energy consumed in Ghana between 2000 and 2003 (Energy Commission, 2005). 3 The dominance of biomass in Ghana‟s energy balance is also evident in all key sectors of the economy as shown in Table 2-3.

Table 2-3: Percentage Contribution of Biomass to Total Energy Consumption by Selected Sector

   

Year

 

Sector

2000

2001

2002

2003

Residential

90.4

90.5

90.3

90.0

Commercial & Service

77.4

78.5

79.2

78.9

Industrial

66

62

61

61

Agriculture and Fisheries

3.6

3.9

4.0

4.2

Source: Energy Commission, 2005

Biomass is used almost exclusively for food processing in all the sectors with unprocessed firewood being the most dominant fuel followed by charcoal and to a limited extent crop residue. The bulk of woodfuels (90%) used in Ghana is obtained from the natural forest with the remaining 10% coming from wood waste (logging/sawmill residue and planted forest).

The woodfuel industry is also a major source of employment for most rural and the urban poor people. It has been estimated that about 0.45 million people are directly involved in the production, transportation and marketing of fuels in the country as a primary occupation, while over 2 million people engage in the trade as secondary occupation. Although usually unrecognised in the national income accounts, the

3 It is important to note that the percentage contribution of biomass to Ghana‟s energy balance has averaged approximately 71% between 1974 and 2001.

woodfuels help conserve an estimated US$560 million in foreign exchange annually, which would have been used to import other forms of energy (MoEN, 2002)

However, Ghana‟s woodfuel resources are depleting at an alarming rate (3% per annum) owing to the unsustainable exploitation and management of the resources. Annual woodfuel supply is estimated to be 18 million tonnes and growing, with demand expected to outstrip supply by the end of 2008 when annual demand is estimated to top 21 million tonnes. A total supply shortfall of 13 million tonnes is projected to occur by 2020 in a business-as-usual scenario. The projected shortfall in supply will create significant access constraints for households using woodfuels for cooking. Switching over to cleaner burning fuels such as biogas can, inter alia, help stem the depletion of the biomass energy resource.

Petroleum is the second most widely used form of energy in Ghana accounting for 27% of total final energy consumed in 2003 (Energy Commission, 2005). Ghana imports all its crude oil needs and finished petroleum products. The crude oil imported is refined at the Tema Oil Refinery (TOR), which is wholly owned by the Government of Ghana, with capacity of 45,000 Barrels per Stream Day (BPSD). 4 Currently, there are 26 licensed Oil Marketing Companies (OMCs) who until recently were primarily responsible for retailing of petroleum products. However following the ongoing deregulation of the petroleum sub-sector, these OMCs are allowed to import refined and unrefined petroleum products into the country. The prices of petroleum products, which are supposed to be uniform throughout the country, are fixed by the National Petroleum Authority (NPA). The final retail price for the various products is a build-up of the ex-refinery prices, margins for the various portions of the supply chain primary distributors, dealers and marketers and several other taxes/levies. 5

Electricity is the third most important energy source in Ghana accounting for 7% of the estimated 6.1 million tonnes of oil equivalent (MTOE) of total final energy consumed in Ghana in 2004. The electricity sector in Ghana is a public monopoly, with generation and transmission vertically integrated in the Volta River Authority (VRA) while the Electricity Corporation of Ghana (ECG), a fully state-owned enterprise, and Northern Electricity Department (NED), a subsidiary of VRA, handle distribution. Electricity is produced from two main sources: hydro and thermal. Two hydro power plants, located at Akosombo and Kpong, with a total installed capacity

4 The GoG has however dropped the hint in June 2006 of its intention of privatising the TOR through the public flotation of shares on the Ghana Stock Exchange

5 i. e. excise duty specific, debt recovery fund levy, social impact mitigation levy, road fund levy, energy fund levy, exploration levy and strategic stock levy

of 1,180 MW provide the bulk of electricity produced in the country. Thermal power generation sources comprise two plants of 330MW and 220 MW. To meet total system demand, these power plants are supplemented with imports (up to 250 MW when available) from neighbouring La Cote D‟Ivoire. Total generation capacity in Ghana was 1,895 MW in 2005, of which 1,140 MW was from hydropower, and 570 MW from thermal plants. In addition, 185 MW was contracted from Côte d‟Ivoire through imports.

Although, Ghana is endowed with a lot of renewable energy resources, especially solar, virtually all these resources remain untapped. The development of the renewable energy resources, including biogas, is therefore a key policy objective of the government of Ghana. The development of Ghana‟s bioenergy resources comes under three main energy policy objectives of the government, which are as follows:

Secure and increase future energy security by diversifying sources of energy supply;

Accelerate the development and utilisation of renewable energy and energy efficiency technologies; and,

Minimise the environmental impacts of energy production, supply and usage.

The government long-term policy objective for renewable energy is to achieve 10% penetration of renewables in the national energy mix by 2020. Biogas, mainly from municipal solid waste, has been mentioned as one of the technologies being considered to achieve this ambition target. The Ministry of Energy has oversight responsibility over the energy sector. The Energy Commission, the Public Utilities Regulatory Commission and the National Petroleum Authority are the other public sector bodies regulating the energy sector operations.

As mentioned earlier, biomass is the predominant cooking fuel among Ghanaian households. The use of modern cooking fuels such as LPG and kerosene combined is less than 10% and this is after nearly two decades of promoting LPG as substitute for woodfuel. Table 2-4 shows the main sources of cooking fuels for households in Ghana. The table confirms the heavy dependence of households on traditional cooking fuels, revealing that an average of 87% of households in Ghana use firewood (56.6%) and charcoal (32%) as their main cooking fuels. It is important to flag that more than 90% of households in each of the four study regions rely on traditional cooking fuels with as high as 98% of households in Northern and Upper West regions using woodfuels as the main cooking fuel. Although only 65% of households in the Upper East region are reported to depend on woodfuels, 32% of the remaining households use agricultural residue as their main cooking fuel bringing the regional

dependence on biomass to 98%. Obviously, the successful deployment of biogas systems in the survey regions will go a long way to change the cooking energy mix of households in the regions.

Table 22-4: Household Source of Cooking Fuel in the Region

   

Fuel Type (%)

 
 

Non-Woodfuels

 

Woodfuels

Region

Electricity

LPG

Kerosene

Agric

Others

Firewood

Charcoal

residue

Ashanti

0.6

7.5

0.7

0.1

0.7

50.6

39.9

Northern

0.1

1.3

0.2

0.2

0.1

81.8

16.4

Upper East

0.4

1.2

0.0

32.8

0.2

55.0

10.4

Upper West

0.0

1.1

0.2

-

0.3

80.2

18.2

Western

0.2

6.3

0.3

0.0

0.6

65.2

27.3

Central

0.1

4.6

0.9

0.1

0.2

63.1

31.1

Gt. Accra

0.3

29.4

2.1

-

-

7.2

59.8

Volta

0.1

2.3

0.4

0.2

0.1

73.2

23.7

Eastern

0.3

4.6

0.5

0.4

-

71.2

22.9

Brong-Ahafo

0.1

2.7

0.3

0.2

0.6

77.6

18.5

Ghana

0.3

8.5

0.7

1.3

0.5

56.6

32.0

Source: Ghana Statistical Service, 2005

Table 2-5 on the other hand shows the main source of fuel for lighting in Ghana.

Table 22-5: Main Source of Fuel for Lighting

   

Fuel Type (%)

 

Region

Grid

Kerosene

Gas

Genset

Battery

Candles

Others

Electricity

Ashanti

58.5

40.9

0.1

0.1

0.0

0.3

0.0

Northern

28.0

71.1

0.0

0.0

0.0

0.1

0.7

Upper East

14.0

84.7

-

0.0

0.6

-

0.7

Upper West

17.0

78.2

-

0.1

0.1

0.2

4.3

Western

49.3

50.2

-

0.2

0.0

0.2

0.0

Central

46.1

53.3

0.1

0.1

0.0

0.3

0.0

Gt. Accra

78.9

18.7

1.3

0.1

0.1

0.7

0.3

Volta

35.4

64.2

0.1

0.1

0.1

0.0

0.1

Eastern

41.0

58.7

0.1

0.0

0.0

0.1

0.1

Brong-Ahafo

41.9

57.6

0.1

0.0

0.0

0.1

0.3

Ghana

48.9

50.1

0.3

0.1

0.1

0.2

0.3

Source: Ghana Statistical Service, 2005

The table reveals that although access to grid electricity in Ghana (49%) is relatively high (compared to access rates in the African region), fuel-based lighting using kerosene is still the main source of night illumination among Ghanaian households. It is also evident from that table that access to modern lighting services is lowest in the three northern regions with the Upper East region having the least number of households (14%) with access to grid electricity. Access to electricity is even much lower among rural households (27%) compared to 79% level of access within urban households.

Fuel-based lighting systems are known to be inefficient solutions to meeting the lighting energy needs of households and hinder development. Ghana has since the early 1990 been embarking on an ambitious National Electrification Programme, which seeks to extend the national grid to all households in Ghana by 2020. Although significant strides have been made since 1990 as shown in Figure 2-1, further extension of grid network to remote rural locations has increasingly become expensive and impossible to be carried out. Off-grid, decentralised power systems therefore remain the only hope for rural households to gain first-time access to modern lighting services. Biogas systems can help improve access of rural households to improved lighting services.

100 79 78 69 80 60 49 41 30 40 27 20 20 9 0
100
79
78
69
80
60
49
41
30
40
27
20
20
9
0
1991/92
1998/99
2005/06
Level of Access (

Rural100 79 78 69 80 60 49 41 30 40 27 20 20 9 0 1991/92

Year

Urban100 79 78 69 80 60 49 41 30 40 27 20 20 9 0 1991/92

Total100 79 78 69 80 60 49 41 30 40 27 20 20 9 0 1991/92

Figure 2-2: Electrification Trends in Ghana

3

BIOGAS TECHNOLOGIES IN GHANA

3.1 Historical Overview

The conventional use of cow dung as source of fuel for cooking has been a common practice for many years in Ghana, especially in the northern savannah regions where there are usually scarcity of firewood and charcoal for household cooking. However, the development of anaerobic digestion systems for conversion of waste to biogas for cooking and lighting became popular in Ghana only in the 1980s when the government and its environmental agencies became alarmed about the rapid devastation of large tracts of forest land for charcoal and firewood production. Ghana‟s forest cover has dwindled from 8.13 million hectares at the beginning of the last century to 1.6 million hectares today at a net annual rate of 3%. The rapid depletion of the woodfuel resource base coupled with projected increase in the demand for woodfuels in future with its attendant social and environmental effects brought into sharp focus the need for alternative cooking fuels sources to be developed and exploited. The biogas technology was consequently selected as one such option.

The first biogas demonstration plant a 10m 3 Chinese fixed dome digester - was constructed in 1986 by the Ministry of Energy at the Shai Hills cattle ranch in the Greater Accra Region, with the support from the Chinese government. A year later in

1987 the United Nations Children Fund (UNICEF) supported the construction of a

couple of domestic biogas demonstration plants at Jisonayilli and Kurugu in Northern region. The Ministry of Energy in the same year also established one of the first major comprehensive biogas demonstration projects in Ghana - the “Integrated Rural Energy and Environmental Project” at Apollonia, a village located some 46 kilometres from Accra. The Apollonia Biogas Plant used animal dung and human excreta to generate 12.5 kilowatts of electric power for street and home lighting as well as cooking, while the bio-slurry was used for agriculture. The Catholic Mission in Ghana also constructed 3 biogas plants (2 in the Eastern Region and 1 in the Volta Region) at as many hospitals between 1994 and 1995.

Apart from these isolated, largely donor-driven initiatives, there has not been any systematic attempt at promoting the biogas technology on a large scale in Ghana. In

1996 the Ministry of Energy commissioned a study the National Biogas Resource

Assessment (NBRA) Project 6 to be conducted. The objective of the study was to assess

6 Ampofo, Kwame (RESDEM Ltd.): National Biogas Resources Assessment, (MoEN, 1996)

the biogas energy potential of various geographical areas of the country, with the aim of promoting the dissemination of biogas technology nationwide to suitable rural communities, as a means to supplement their energy resource base and through that, help improve their socio-economic well being. This study was intended to be the first step in the planning and the development of a nationwide biogas programme. However, after over more than a decade since the study was completed and the report submitted to the Ministry, there is no sign that a national biogas programme to promote domestic biogas systems is in the offing. In 2007, the government announced in the budget statement a plan to increase the production and utilization of biofuels in the national energy mix. However, this was only targeting the production of jatropha oil as a substitute to crude oil.

Notwithstanding the absence of a clear-cut strategy for the promotion of the biogas technologies in Ghana, a number of systems have been built since 1996. Interviews conducted with the entrepreneurs involved in the construction of biogas plants during the study indicate that a little over 100 biogas plants have been installed in Ghana till date. Table A-3 in the annexure contains a profile of selected biogas installations. The table shows that majority of these plants are bio-sanitation interventions such as waste/effluent treatment plants and biolatrines, which are largely, located in educational and health institutions in predominantly urban areas. It is also evident from the table that there are very limited number of domestic biogas plants in Ghana and that apart from the few donor-funded systems in Jasonayilli and Okushibli, none of the domestic biogas plants built so far can be found in rural areas.

3.2 Types of Biogas Digesters in Ghana

Three main types of digesters the Indian Floating Drum, the Chinese Fixed Dome and the Puxin Biogas Digesters have been designed, tested and deployed in Ghana.

3.2.1 The Floating Drum Digester

The floating drum digester (popularly called the Gobar Gas Plant) is believed to be have been developed by an Indian, Jashu Bhai J Patel, in 1956. In this design, the digester chamber is usually made of brick masonry in cement mortar. A cylindrical shaped mild steel drum is placed on top of the digester to collect the biogas (gas holder) produced from the digester. Thus, there are two separate structures for gas production and collection. As the biogas is produced in the digester, it rises vertically and gets accumulated and stored in the gas holder at a constant pressure of 8-10 cm of

water column. Figures 3-1 shows cross-sectional schematic diagram of the floating drum digester and 10m 3 digester at Appolonia respectively.

digester and 10m 3 digester at Appolonia respectively. Figure 3 -1:Cross-Sectional Schematic of FDD (left) and

Figure 3-1:Cross-Sectional Schematic of FDD (left) and 10m3 Digester at Apollonia (right)

Although the floating drum technology has some advantages such as ease of construction, ease of determining the level of gas in the tank and guaranteed gas pressure, the technology is less preferred because it is relatively more expensive (because of the steel drum), has a shorter lifespan due to problems with corrosion and associated with high maintenance cost. The technology has become largely obsolete with the advent of the Chinese fixed dome with the Appolonia plant being the only known biogas installation in Ghana where the floating drum technology has been used so far.

3.2.2 The Fixed Dome Digester

The fixed dome model biogas plant (also called drumless digester) was built in China as early as 1936. The Chinese fixed dome plant is the archetype of all fixed dome plants. A fixed-dome plant comprises of a closed, dome-shaped digester with an immovable, rigid gas-holder and a displacement pit, also named 'compensation tank'. It basically consists of an underground brick masonry compartment (fermentation chamber) with a dome on the top for gas storage. In this design, the fermentation chamber and gas holder are combined as one unit as shown in Figures 3-2. This design eliminates the use of costlier mild steel gas holder which is susceptible to corrosion. The life of fixed dome type plant is longer (from 20 to 50 years) compared to floating drum plant.

Figure 3-1: Schematic Drawing of Chinese Fixed Dome (Left) & Completed CFD Digester in Accra

Figure 3-1: Schematic Drawing of Chinese Fixed Dome (Left) & Completed CFD Digester in Accra

The CAMARTEC 7 fixed dome digester is by far the most popular biogas digester deployed in Ghana as can be seen from Table A-3 ( or is it 2?). The model, which has a simplified structure of a hemispherical dome shell based on rigid foundation ring and a calculated joint of fraction, was developed in the late 1980s in Tanzania. Quite a number of the CAMARTEC fixed dome digesters are fitted with external balloon gas holders for storage of gas produced.

The fixed dome plants have a number of advantages, which include low initial costs and long useful life-span; no moving or rusting parts involved; compact basic design; saves space and well insulated; and creates local employment during construction. However, it has its own demerits notable among which is the requirement of high technical skills to ensure air-tight construction as poor masonry work results in gas leakages. Similarly, the fluctuating gas pressure tends to complicate gas utilisation and makes fixed dome unsuitable for many other applications.

7 CAMARTEC is the acronym for Centre for Agricultural Mechanisation and Rural Technology based in Arusha, Tanzania.

Figure 3 - 2 : CFD Digester under Construction (left) and CFD Being Repaired (Right)

Figure 3-2: CFD Digester under Construction (left) and CFD Being Repaired (Right) (Courtesy REES)

3.2.3 The Puxin Biogas Digester

The Puxin Biogas Digester (PBD) is an innovation of the Shenzhen Puxin Science and Technology Co. Ltd. of China, and an emerging bio-digester technology in Ghana. The technology, which is based on the floating dome principle and application of slurry based feedstock, is reputed to have inherited all the advantages of the fixed dome and the floating drum digesters while at same time overcoming their main disadvantages. The PBD is a hydraulic pressure biogas digester, composed of a fermentation tank built with concrete, a gas holder made with glass fibre reinforced plastic and a digester outlet cover made with glass fibre reinforced plastic or concrete. The gasholder is installed within the digester neck, fixed by a component; the gasholder and digester are sealed up with water.

the gasholder and digester are sealed up with water. Figure 3 - 3 : Set up

Figure 3-3: Set up of Puxin Digester (left) Schematic Description of Puxin Slurry-based Digester (right)

More than 10 Puxin plants have been built since 2007 when it was first introduced in Ghana. Figure 3-5 shows a 10m 3 Puxin plant under construction in Accra, Ghana.

a 10m 3 Puxin plant under construction in Accra, Ghana. Figure 3-4: Construction of 10m3 Puxin

Figure 3-4: Construction of 10m3 Puxin Digester at Private Residence in Accra (Courtesy Beta Construction Ltd)

3.2.4 Conclusion

Several stakeholders were asked during the study to indicate which of the various types of biogas digesters should be recommended for a national domestic biogas promotion programme. The Chinese fixed dome was picked by the overwhelming majority of respondents on the basis of its durability and relative cost advantages. It was also established during the study that a 6m 3 fixed dome digester with estimated daily gas production 1.4 m 3 will be able to supply the daily cooking energy needs of a household of 5-8 individuals.

3.3 Biogas Service Providers

The feasibility study has revealed that there are at least 10 private registered companies who are actively involved in the design and installation of biogas systems in Ghana. Some of these companies, in addition, offer consultancy services to other service providers. Table 3-1 contains a brief profile of a selected number of biogas service providers who were interviewed during study. As can be seen from the table some of the service providers have over 10 years experience in the construction of biogas systems. Although Beta Civil Construction Ltd appears to be the oldest among

the lot, it should be noted that the company only ventured into biogas construction in

2006.

Table 3-1: Profile of Selected Biogas Service Providers

Company

 

Date

Workforce

Type

of

Biodigester

Number

of

 

Established

(Full

Installed

Digesters

Time)

Installed

Biogas Engineering Ltd

 

2002

6

CAMARTEC fixed dome

10

 

type,

and effluent

treatment plants

 

Biogas Technologies West Africa Limited (BTWAL)

1994

148

Fixed dome and effluent treatment plants

35

RESDEM

 

1996

 

Mostly

bio-latrine

25

 

digesters

UNIRECO

 

2001

5

Mostly

bio-latrine

 
 

digesters

Global Renewable Energy Services

1996

4

Traditional Fixed Dome with external gas holders

20

Beta

Civil

Construction

1975

25

Puxin Biogas Digesters

12

Ltd.

Renewable

Energy

and

2002

     

Environmental Systems (REES)

Source: KITE Survey, 2007

BTWAL appears to be largest of the companies with current staff strength of about 148 full time employees and 102 casual labourers. The company also has the highest number of installations to its credit. Almost all the service providers are based in Accra.

3.4 The Cost of Biogas Digesters

Majority of the service providers interviewed were generally hesitant to provide typical cost of biogas digesters when the question was posed to them for the simple reason that cost is location and site specific. In their opinion, standardisation of cost could be misleading. However, when pushed further to gain a rough idea of the typical cost of digesters, a figure of between US$200 and US600 per m 3 capacity was given as the rule of thumb cost estimate of digesters in Ghana. Quotations for the construction of 6m 3 , 8m 3 and 10m 3 capacity Chinese fixed dome digesters and 6m 3 Puxin digester were collected from four major service providers UNIRECO, REES, the IIR and Beta Construction.

Table 3-2 shows the current cost of constructing the listed digesters while Annex 3 shows the cost breakdown of some of the biogas plants. The table indicates that the

cost of 6m 3 Chinese fixed dome digester ranges between US$1,200 and US$2,600 while that Puxin digester of the same capacity is estimated at approximately US$2,700. The lower estimate of US$1,200 was quoted by the IIR, which is a division of the Council for Scientific and Industrial Research (CSIR), a public sector institution charging lower rates for labour and project supervision than the two private sector service providers. Table 3-3 also shows significantly different estimates being quoted by REES and UNIRECO, both private sector concerns. As can be seen from Annex 3, the cost differential is attributable to the fact that UNIRECO proposes to use fewer blocks and less costly labour in the construction of the digester.

Table 3-2: Cost Breakdown of 6m³ Fixed-dome Biogas Digester

Name of Company

Cost Breakdown (US$)

 

Digester Size

6m 3

8m 3

10m 3

 

Materials

990

1,064

1,190

Labour

496

596

794

UNIRECO

Supervision

199

298

298

Other cost

60

99

99

Total cost

1,745

2,056

2,382

 

Materials

1,232

 

1,683

Renewable Energy and Environmental Systems (REES)

Labour

798

 

1,137

Supervision

300

 

500

Others

270

 

240

 

Total cost

2,600

 

3,660

 

Materials

840

1120

1,736

Labour

180

240

300

Institute of Industrial Research (IIR)

Supervision

60

80

100

Others

120

160

200

Total cost

1,200

1,600

2,336

 

Materials

1,938

 

Labour

400

BETA Construction Ltd (Puxin Digesters)

Supervision

300

Others

48

 

Total cost

2,684

Source: Authors‟ Construct based on Key Informant Interviews

Table 3-2 further reveals that the investment cost of biogas systems in Ghana is higher than in Asia and other parts of Africa. For example, while the investment costs of an 8m 3 fixed dome digester in Ghana range between $1,600 and US$2,000, similar plants can be procured for US$574 in Kenya (about three times less), US$960 in Uganda, US$417 in Nepal and US$245 in Vietnam (Source: ETC Group, 2007).

3.5

Likely Challenges to be faced by the Biogas Industry

Limited availability of feedstock, poor design quality, lack of technical know-how, high operating and maintenance cost, and lack of access to financing have been found to be some of the challenges that have confronted some of the past biogas initiatives presented above.

a) Raw Material Availability: Lack of adequate quantities of cow dung is reported

to be one of the key problems that led to the collapse of the Apollonia and Jasonayilli domestic biogas plants. In some cases additional dung had to be found, collected and transported to the two plants to augment the dung collected overnight from the kraals. This led to high O&M cost. To address this challenge, future promotional programmes on biogas should ensure that all targeted households have enough cattle to produce the daily dung requirements of the digesters to be built.

b) Lack of Technical Expertise: It has been found that the owner-operators of

past biogas systems lacked the basic skills required for everyday operation of the plants. No training on how to operate and maintain a biogas system was provided for their domestic and institutional beneficiaries neither were there any operating manuals for the plants. Technicians who were supposed to provide post-installation support service lived several kilometres from the location of the plants hence were not readily available when needed. Training of endusers and/or the preparation of easy-to-read and user-friendly operating manuals would therefore have to be made a major component of future biogas programmes.

.

c)

High Investment Cost: The initial cost estimate for the acquisition of a 6m 3

fixed dome biogas digester (US$1,200-US$2,600) could be a key inhibiting factor for majority of potential households willing to switch over to biogas. According to the GEF Small Grant Programme, „brick-lined underground fixed dome is too expensive for the rural poor and that a cheaper design needs to be developed‟ (GEF, 2006). Unfortunately, the fixed dome is the preferred digester type as indicated in section 3.2.4. Further investigation should be carried out to understand why the cost of the technology with the same specifications is cheaper in other countries but so expensive in Ghana. Service providers think that the cost would be significantly reduced once there is demand for commercially challenging volumes of domestic biogas digesters due to economies of scale. There were some other challenges in the last draft financing and alternative energy. Also had key lessons learnt in the last draft

4

MARKET POTENTIAL OF BIOGAS IN GHANA

4.1 Technical Potential of Biogas

The technical potential for domestic biogas plants in the surveyed regions has been estimated based on the number of households that satisfy two basic (but critical) requirements sufficient availability of cow dung and water to run a biogas installation. The assessment of the biogas potential is underpinned by the following key assumptions:

Cow dung is the main feedstock 8 ;

Rural households with cattle and practicing zero grazing or at least night- stabling are the initial target market;

Only energy for cooking is being considered

4.1.1 Resource Availability

Provisional results from the fifth round of Ghana Living Standard Survey (GLSS 5) put the total cattle population in the 4 survey regions at approximately 2.3 million heads representing 82% of the total cattle reared in Ghana in 2005/06. The cattle are owned by a total of over 180,000 households, 84% of which (153,000) are agricultural households yielding an average cattle holding per agricultural household of 14.8% as shown in Table 4-1.

Table 4-1: Distribution of Cattle Population in Survey Regions

Region

Cattle Pop.

No.

of

Cattle

No.

of

Cattle

Av.

Cattle

per

owning

Owning

Agric.

household

Households

 

Households

 

Northern

982,847

 

98,090

 

85,142

 

11.5

Upper West

787,681

 

28,250

 

23,645

 

33.3

Upper East

454,112

 

47,577

 

39,441

 

11.5

Ashanti

36,355

 

6,455

 

4,874

 

7.5

TOTAL

2,260,995

 

180,372

 

153,102

 

14.8

Source: Ghana Statistical Service, GLSS 5 Provisional Results, 2008

8 Although there are other species of livestock in Ghana, the estimation of the technical potential has been based only on cow dung because according to Ampofo (1996), cow dung appears to be the only feedstock in all the regions that has practical utility for the economic production and application of biogas based on available technology and technical know-how.

The table indicates that majority of the cattle holding in the surveyed regions can be found in the three savannah, with the Northern region alone accounting for at least 44% of them.

For a domestic biogas plant to work properly, the household should typically have a minimum of 20-30 kg of fresh dung available on a daily basis. This minimum daily dung production can typically be produced by 2-3 domestic cattle (at least stabled at night). However, given that the cattle breeds reared in Ghana (just as in many other West-African countries) are small and undernourished, more cattle heads or days of night stabling will be needed to produce sufficient dung required for the daily production of gas to meet cooking energy needs of each household. In an interview conducted during the surveys with research scientists at the Animal Research Department at Navrongo Campus of the University for Development Studies (UDS), it was revealed that 7-10 heads of the Ghana short-horn cattle (the predominant cattle breed in Ghana) will be needed to produce the required 20kg of dung overnight while the same number of the Crosses and the Zebus will produce 25kg in an overnight kraaled situation.

On the basis of this finding and with specific reference to the average number of

cattle per agricultural household given in Table 4-1, it can be concluded that each of the agricultural households in the regions covered in the study, will have the requisite number of cattle needed to produce sufficient dung on a daily basis to run a typical domestic biogas since average cattle holding per household is equal or more than 7 in

all the regions

could be put at 153,000 biogas digesters.

Thus, the theoretical potential of biogas in the surveyed regions

The actual technical potential of biogas digesters in the four regions is estimated by multiplying the number of cattle owning agricultural households by a cattle holding factor (chf), which is determined by the average cattle holding of the country. According SNV (2006?), a chf of 0.75 is applicable for countries with average domestic cattle holding of more than three heads per agricultural household; Ghana‟s is 12.7. The technical potential of domestic biogas in the surveyed region is therefore estimated at 114,827 (153,000 X 0.75) installations. Given that the target market is rural households coupled with the fact that 71% of all cattle owned by households are concentrated in predominantly rural areas (GSS, 2000), the technical potential of biogas can be downgraded further to 81,527 9 installations.

9 This represent 71% of the theoretical potential

The estimation of the technical potential for biogas has been based on the assumption that all the dung to be produced by the cattle will be available and accessible for the generation of biogas. However, according to Ampofo (1996), „cow dung has a high opportunity cost and occupies a very important place in some village economies, particularly those of the Upper East and Upper West regions”. In these areas cow dung is used, inter alia, as manure, building material (for plastering and binding), cooking and as bait for termites used to feed poultry. Such is the importance of dung to some rural households that some women in the Upper East region were reported to literally follow cattle, to pick up their droppings for use either at home or on the farm (Ampofo, 1996). This means that there are (and likely to be) competing uses for the dung, which could further reduce the technical potential for biogas.

The household survey confirms that there are indeed alternative and multiple uses for dung at the moment as shown in Table 4-2. The table indicates that the predominant use of cow dung in the households visited is its application as manure on the farms and that only 8% of the respondents said they did not have any use for the dung, hence disposing of it.

Table 4-2: Household Use of Cow Dung

Uses of animal waste

% respondents

Farm manure

50.5

Manure and binding material

28.4

Dispose off

8.3

Manure and plastering

7.8

Manure, binding and plastering

2.0

Binding material

1.5

Manure, energy, binding and plastering

1.5

Total

100

Source: KITE Survey, 2007

However, an overwhelming majority (98%) of the household respondents indicated their willingness to release the dung for the production of biogas as shown in Table 4- 3. Although these are only verbal and non-binding assurances from the sampled households, the fact that majority of them are mainly using the dung as manure effectively reduces any potential non-supply risk since the slurry to be produced from the biogas plants will give the household manure of a better quality.

Table 4-3: Willingness to Release Dung for Biogas Production

 

No. of respondents

% respondents

Yes

200

98.0

No

4

2.0

Total

204

100

Source: KITE Survey, 2007

4.1.2 Access to Water

Apart from having adequate collectable feedstock to feed the biogas plants on a daily basis, access to reliable water supply is also a major prerequisite that has to be met due to the fact that the dung has to be mixed with roughly equal amounts of water and/or urine to enable both the installation‟s microbiological process as well as the hydraulic functioning. Although the process water does not have to be potable, the significant amount needed daily means that water should be available in the vicinity of the household; within typical a distance of say 20-30 minutes of the installation(s). Access to water (defined as the proximity to nearest water source measured in terms of time taken to reach the nearest water source) in all the regions covered in the survey is relatively high as shown in Table 4-4.

Table 4-4: Household Access to Water in the Survey Regions

Region

 

Level of Access (%)

Rural

Urban

Total

Ashanti

97.4

99.3

98.4

Northern

74.4

92.9

80.2

Upper East

89.6

92.2

90

Upper West

88.1

97.0

87.7

Ghana

83.1

94.9

94

Source: Ghana Statistical Service, 2003

The table indicates that averagely, 94% of households in Ghana take less than 30 minutes to reach their nearest water source. An important aspect of the statistics presented in Table 4-4 is the high level of access to water (averaging 86%) among rural households (the targeted market) in all the surveyed regions. This suggests that access to process water required for the biogas plant might not be a major constraint. constraint. ThisThis fact notwithstanding, it should be borne in mind that the introduction of biogas plants on the scale that is being envisaged could put further strain on the water resources of the regions, especially in the three northern regions, where the water resources appear to be overstretched already. Evidence of this fact is

the falling groundwater levels being observed in the Upper Regions for example (FAO, 2007).

4.2 Willingness and Ability to Pay

4.2.1 Willingness to Adopt and Pay for Biogas

Although majority of the household respondents (94%) knew practically nothing about the biogas technology prior to the household surveys (see Table 4-5), a large proportion of them became fascinated and excited about the technology after the research team had taken time to introduce it to them. Consequently, majority of the respondents (90%) expressed their willingness to switch over from woodfuels to biogas, with 67% indicating their preparedness to adopt the technology immediately as shown in Figure 4-1.

Table 4-5: Household Knowledge about Biogas Technology

Knowledge level

No. of respondents

% respondents

Has some knowledge

12

5.8

Has no knowledge

194

94.2

Total

206

100

Source: KITE Survey, 2007

not sure 3% in a year 4% in six months 3% in three months 23%
not sure
3%
in a year
4%
in six
months
3%
in three
months
23%
immediately
67%

Figure 4-1: Willingness to Switch to Biogas

Not only did the households say they were willing to go in for

an

overwhelming majority (99%) were also willing to pay for the

technology as indicated in Table 4-6. The table also reveals that about 10% of the households were willing to pay between one and a half and three times their current cooking energy bill 10 to acquire the biogas digesters under one of the scenarios they were presented with; a

the switch, but

10 This works up to between US$432 and 1440 for firewood users and $342 and 1140 for charcoal users.

greater majority (89%) however did or could not indicate how much they are willing to pay for their revealed preference for biogas. It should be noted however that the findings of this qualitative analysis can at best be described as indicative since the sample size does not allow for generalisaton of the regional household populations.

Majority (87%) of respondents who were unable to indicate their preferences for either of the scenarios attributed their “indecision” to the fact that they are not currently spending on cooking fuels (hence had no basis of comparison) as shown in Table 4-7. It came out strongly during a number of interviews with such households that they will be more willing to pay for the biogas plant if it were to provide lighting as well since their expenditure on lighting was significant. Although a 10m 3 digester will be able to provide lighting, its investment costs is higher than that of the 6m 3 digester (see Table 3-3) which will most likely be unaffordable by the household. It is also evident from Table 4-7 that another 12% of the respondents did not pick any of the scenarios because in their view the technology was too expensive.

Table 4-6: Household Willingness to Pay for Bio-digesters

 

No.

of

 

Willingness to pay

respondents

%

Yes

204

99

No

 

2

1

Total

206

100

Scenario 1

   

twice current energy bill for maximum of 5 years

 

8

4.1

thrice current energy bill for 5 years

 

9

4.6

1.5 times more

 

3

1.5

none of the above

175

89.7

Total

195

100

Scenario 2

   

same price as septic tank (equivalent of US$

   

2550)

 

3

33.3

half the price of septic tank

 

1

11.1

one-third the price of septic tank

 

4

44.4

none of the above

 

1

11.1

Total

 

9

100

Scenarios 1 and 2

   

One of the available options

 

28

13.7

None of the above

176

86.3

Total

204

100

Source: KITE Survey, 2007

Table 4-7: Reasons for Indecision

Reasons

%

Expensive

11.9

may move away

0.6

more than 3times

0.6

no cooking fuel expense

87.0

Total

100.0

Source: KITE Survey, 2007

Meanwhile, the fact that 87% of the households interviewed indicated that they do not pay for the use of firewood raises questions about their declared willingness to switch to biogas since they will have very little economic incentive to doso. However, available national statistics show that the stock of woodfuel resources in Ghana has dwindled considerable thereby restricting household access to high quality woodfuel. This situation has been projected to worsen. Information from the household survey and the FGDs points to an acute situation in the three northern regions resulting in the illegal felling of economic trees such as shea butter for firewood. “The forest is gone”, they remarked. With no or very little non-woodfuel based alternative available within reasonable distances (see Table 4-8), these households are compelled to travel an average distance of over 5 kilometres to collect firewood as shown in Table 4-9.

Table 4-8: Alternative Sources of Cooking Fuels

Energy source

No. of respondents

% respondents

Electricity

1

1.5

Wood

26

40.0

Charcoal

27

41.5

crop residue

11

16.9

Total

65

100

Source: KITE Survey, 2007

Table 4-9: Average Distance to Fuel Source (km)

Energy source

Gas

Wood

Charcoal

Dung

Average distance

34.7

5.2

0.5

0.009

Source: KITE Survey 2007

The evidencefrom the above suggest that traditional cooking fuels are becoming scarcer and scarcer in the Northern Regions and this is going to continue unless alternative and more sustainable cooking fuels are found or made available.

4.3 Ability to Pay for Biogas Plant

Mere expression of willingness to pay does not in anyway guarantee an effective demand for the technology; willingness to pay must be backed by ability to pay in order for the biogas marketplace to exist. The study thus assessed the financial ability of households in the survey region to afford the investment cost of a biogas plant, estimated be in the region of US$ 1200 and US$2,600 for a typical 6m 3 fixed dome biogas digester.

To gain a rough idea of income and expenditure levels and patterns in the surveyed regions as proxies for households‟ ability to pay, households were asked during the structured questionnaire interviews to indicate their average annual incomes and expenditures. Table 4-10 shows, inter alia, the mean annual income and expenditure of the respondents. As evident from the table mean annual expenditure and income of households interviewed are US$2,145 and US$3,695 respectively, implying excess income over expenditure of US$1,500 plus. Mean household income is surprisingly highest in the Upper East Region (the poorest region in Ghana) and lowest in the Ashanti region; this is mainly because the Upper East Region accounted for the largest number of household interviewees coupled with the fact that majority of household members in that region earned incomes in addition to the household heads. The income and expenditure figures suggest that the survey households should in principle be able to afford the upfront cost of any biogas digester selling for US$1,500 or less based on the assumption (albeit unrealistic) that they (households) will be willing to spend all of their excess income on the technology.

Table 4-10: Annual Income and Expenditure Levels of Surveyed Households

Region

 

Household Expenditure (US$)

 

Min

Max

Mean

Std. Deviation

Ashanti

544

7,789

2,485

1,565

Upper West

590

7,252

1,807

1,010

Upper East

487

10,293

2,337

1,524

Northern

487

6,727

2,089

1,425

Total

487

10,293

2,145

1,386

   

Household Income (US$)

 

Ashanti

725

8,219

3,072

1,622

Upper West

1,088

8,461

3,158

1,888

Upper East

1,450

12,087

4,580

2,227

Northern

967

9670

3,565

2,370

Total

725

12,087

3,695

2,275

Source: KITE Survey, 2007

However, these income and expenditure figures cannot be considered as representative of the population at the district, regional or national level because of

the smallness of the sample size. In fact much lower mean annual household income levels are recorded among livestock owning households in the four regions in nationally representative statistics as shown in Table 4-11 below.

Table 4-11: Average Annual Income of Livestock Owning Households (2005-26)

Region

Mean Annual Household Income (US$)

Total

Male

Female

Ashanti

1,148

1,110

1,135

Northern

1,853

1,254

1,692

Upper East

634

583

620

Upper West

736

421

626

Ghana

1,410

1,140

1,320

Source: GSS 2008, Provisional GLSS 5 Results

The statistics in Table 4-11 shows that perhaps with the exception of the Northern region, no households in the other regions will be able to afford a down-payment (outright purchase) for the minimum upfront cost of US$1,200 for a 6m 3 fixed dome digester even in the event that the household decides to spend all of their annual income to acquire the technology. However, it is implausible and unrealistic to expect households to make full payment for biogas plant since the investment costs appears to exceed the means at the disposal of the targeted investors and cannot be covered from their regular incomes or savings. Clearly, a financing mechanism has to be devised to facilitate the uptake of the technology considering the fact that service providers usually demand down-payment before construction works will commence. As a general rule of thumb, access to financial incentives has been singled-out as a prerequisite for the success of any large scale biogas initiative (See ISAT-GTZ, Biogas Digest, Volume III)

Results from the KITE survey confirm the need for outside (perhaps borrowed) capital to help households cover the investment cost associated with the acquisition of the biogas digesters. Using an investment cost of US$ 860 11 and assuming that 50% of the cost would be absorbed through subsidy and/or unpaid labour, the households were asked to indicate how much they will be able to pay on a monthly basis to defray the remaining investment cost given several scenarios. Table 4-12 captures the responses of the households. About 45% of households indicated that they have the ability to pay the equivalent of between US$10 and US$17/per month (US$120-US$170 per year) for 3-5 years to acquire a 6m 3 fixed dome digester.

Table 4-12: Household Preferred Repayment Schedule

11 Based on estimates provided by SNV during the survey

Options

No.

%

GH¢ 17 for 3 years

8

4.3

GH¢ 12.5 for 4 years

8

4.3

GH¢ 10 for 5 years

65

36.0

Others

105

55.4

Total

186

100

Source: KITE Survey, 2007

Among the 55% of households indicating repayment modes other than the 3 scenarios presented them, 71% indicated the ability to pay less than GH¢10 each month to defray moneys borrowed to finance the investment cost, 8% were willing to pay between GH¢10 and GH¢20 per month, with 20% willing to pay between GH¢20 and GH¢50 as depicted in Table 4-13.

Table 4-13: Other Preferred Repayment Mode

Monthly Payment

No.

%

1-9 GH¢

75

71

10-20 GH¢

8

8

20-50 GH¢

21

20

Above 50 GH¢

1

1

Total

105

100

Source: KITE Survey, 2007

To further establish whether or not the households have the wherewithal to acquire the biogas digester, they were asked whether they had bought any household durable product over the past 12 months. Table 4-14 shows their responses. As can be seen from the table, 36% of households indicated that they had bought things such as television sets, motorbikes, bicycles, refrigerators and mobile phones spending the equivalent of US$290 on average per household as indicated in Table 4-15.

Table 4-8: Purchase of durable household product in the past year

 

No. of

%

Response

respondents

respondents

Yes

75

36.4

No

131

63.6

Total

206

100

Source: KITE Survey 2007