Hydropower is energy that is harnessed from the force of moving water. It is the world’s largest source of affordable renewable energy and accounts for about 20 percent of world electricity supply. Hydropower projects provide multiple economic and environmental benefits to countries as they offer a hedge against rising energy prices and can play an important role in energy trade and regional power pools.
Hydropower is the cheapest way to generate electricity. Cost savings arise from the fact that once a dam has been built and the equipment installed, the energy source—flowing water—is free. However rising concern about changing world climatic trends is increasingly putting a squeeze on funding for the development of large hydropower sources.
Ghana has almost exhausted its hydropower capacity as the total remaining potential from the major rivers, Tano, Ankobra, and Pra cannot exceed 400 MW. Project risks inherent in the complexity and uncertainties of these projects include limited hydrological data and analysis, climate change variability, uncertain geology, continuous deforestation and siltation from human activities, multi-disciplinary and cross-sectoral project management.
Key constraints in Ghana include dwindling water resources, high capital costs, lack of financing, absence of comprehensive planning schemes, high environmental considerations, unsettled conditions for private sector participation, and weak regulatory and policy frameworks
Internationally accepted good practice in hydropower development requires value to be defined by a "triple bottom line," i.e. the combination of environmental, social and economic benefits generated by each project. The delineation of environmental benefits poses a particular challenge for hydropower.
Successful projects require careful attention to preparation and supervision as well as improving the enabling environment. This in turn requires adequate resources, knowledge, and skills across multiple stakeholders.