International Journal of Statistics and Probability; Vol. 11, No. 3; May 2022 ISSN 1927-7032 E-ISSN 1927-7040 Published by Canadian Center of Science and Education 22 Interactions Between Water Level, Crude Oil, and Hydroelectric Power Generation in Ghana; A Structured Vector Auto Regression Approach Smart Asomaning Sarpong 1 , Akwasi Agyei 2 1’2 Institute of Research, Innovation and Development – IRID, Kumasi Technical University, Ghana Correspondence: Smart Asomaning Sarpong, Institute of Research, Innovation and Development – IRID, Kumasi Technical University, Ghana. E-mail: smart.asarpong@kstu.edu.gh / smartsarpong2015@gmail.com Received: February 13, 2022 Accepted: April 12, 2022 Online Published: April 20, 2022 doi:10.5539/ijsp.v11n3p22 URL: https://doi.org/10.5539/ijsp.v11n3p22 Abstract Countries that suffer disturbances in their power generation are less likely to meet many of the sustainable development goals and general economic growth. This study used a three-variable SVAR model to examine the interactions of water level, crude oil and power generated from the Akosombo hydroelectric generation Dam in Ghana. Data used for this span from January 2010 to December 2019. From the results, none of the three important variables studied was found to be completely independent; dam level and crude oil are adjusted to absorb power generation shocks. All three variables drift away from their normal levels to contain shock before returning to their desired levels at varying time points. It has also been established that Dam water level shocks leads to a negative response in both power generation and crude oil in the short run. Overall, shocks to crude oil explains much of the variability in power generation than shocks to dam water level. These findings convey that there is exist very useful interactions among the three-variables studied in this paper. Policy makers should institute effective measures for early detection and intervention of the short-term power disturbance that characterizes the hydroelectric power generation to ensure a sustainable power and growth of the Ghanaian economy. Keywords: SVAR, Hydroelectric, Ghana, long run shocks, impulse response 1. Introduction If the world can achieve a high percentage of the targets set under the sustainable development goals, stable electricity supply will play a crucial role (Owusu & Asumadu-Sakodie, 2016; Owusu et al., 2016). About 10% of the population of the world still do are yet to be hooked onto electricity making it a matter of global concern (IEA, 2015). Among all the energy production mix, hydropower remains the largest renewable energy resource due to its cost-effectiveness and reliability (IEA, 2015). According to Benefoh and Ackom (2016), electricity supply that is both reliable and inexpensive is crucial to any country's development. The Akosombo dam is a hydroelectric power generating station on the Volta River in the south-eastern of Ghana and it is managed by the Volta River Authority. It serves as the major source of electricity in Ghana. It has a powerplant which contains six turbine generator units, and it operates between 276ft maximum and 248ft minimum headwater level. Currently, the Akosombo dam produces 1000MW electricity at its maximum operating capacity (Miescher, 2021). According to Smokorowski (2021), the peak of the hydro is the only reliable flexible method of producing electricity besides fossil fuels. The Akosombo hydroelectric project was meant among others to open Ghana to industrialization and hence modern development. Fishing, farming, transportation, and tourism are some of the other good effects (Gyau-Boakye, 2001). The availability of water resources usually determines when and how much energy the hydroelectric plant will generate on a seasonal and annual time frame (Carpentier et al., 2017). Long-run shocks in power generation are the unanticipated changes in power generations over long time. The shocks trigger the operation of the powerplants in production of electricity. Because the dam's primary source of water is rain, which is unpredictable and dependent on weather conditions (Mensah, 2013), there are a lot of factors that causes a disturbance either to increase or decrease the water level. During the dry season, the level of water in the reservoir and the surrounding area reduces, while during the rainy season, it swells. As a result, power generation becomes unstable which affect the growth and sustainability of a country. Ghana's industrial and economic growth has resulted in a rising demand for power that exceeds the capacity of the Akosombo dam power plant. Part of the reason for the limited producing capacity is a lack of fuel supply to existing thermal power plants (Kemausuor & Ackom, 2017). Russ (2020) studied the effects of runoff shocks on general growth of the economy. His suggested that rainfall should