Sadc power trading volumes hit US$50m
> Sifelani Tsiko
Electricity trade between Sadc member states is increasing as more countries move towards short-term power trading to avert black –outs, a senior Southern Africa Power Pool (SAPP) official says.
SAPP chief market analyst, Engineer Musara Beta told the Southern Times on the sidelines of a European Union – SAPP technical support report back meeting in Harare last week that traded volumes on the SAPP competitive electricity market had increased significantly to nearly 900 000 MWh between April and December.
“The value of money exchanged on the market is US$50 million,” he said. “The increase in trade volumes reflects the strong interaction within the Southern Africa power pool. It shows that there is confidence on the market by our members who are resorting to this short-term instrument to address power shortages.”
Power trading has increased from 84 000 MWh in 2013, 508 000 MWh in 2014 to more than 900 000 MWh in 2015.
The SAPP financial year runs from April 2015 to March 2016.
Physicists define a unit of energy, especially electrical energy, as equal to the work done by one watt acting for one hour and equivalent to 3 600 joules.
They say a megawatt is a unit for measuring power that is equivalent to one million watts. One megawatt is equivalent to the energy produced by 10 automobile engines while a megawatt hour (Mwh) is equal to 1 000 Kilowatt hours (Kwh).
It is equal to 1 000 kilowatts of electricity used continuously for one hour, electrical engineers say.
SAPP market has seen a significant growth over the past few years owing largely to a positive momentum to the market that arose from concerted efforts placed on building a regional electricity power grid.
The share from renewable energy sources is still insignificant, but power engineers say Sadc countries need to move with speed to set up a common regional grid code that will outline guidelines for renewable energy, quality of supply and support power generation and transmission planning.
“The harmonization of the grid codes with dedicated chapters for renewable energy and quality of supply is critical for the region,” said Dr Phillipe Russe, a senior project manager for the EU Technical Assistance to SAPP project.
“The idea is to avoid duplication and make codes accessible to all.”
Power shortages have become one of the biggest drawbacks to the development of the Sadc region.
Most countries in the region are facing challenges in meeting energy requirements due to growth in demand, forcing most countries to implement Demand Side Management (DSM) programmes such as load shedding.
Observers say while load shedding has succeeded in restraining the overall electricity demand in the region to some extent, the measure has also affected socio-economic growth since the availability of energy is one of the key enablers of sustainable development, and is essential to the industrialization agenda.
SAPP was established in August 1995 to facilitate commercial trade in power across the regional grid.
The SAPP network has been a major contributor to the increase in the Sadc electricity reserves and exchange of energy during emergencies across all states.
The 12-member Southern African Power Pool has a total operating capacity of 46 910 MW and a total demand plus reserve of 55 157 MW.
The region has energy equivalent to 350 Terawatt hour (TWh) and a regional capacity shortfall of 8 247 MW.
Three national electrical systems which are not yet connected to the SAPP network include Angola, Malawi and Tanzania.
“The SAPP competitive market provides quick access to power for all member states,” said Eng Beta.
“It helps to optimize our energy resources and brings efficiency to regional power utilities. Apart from this, it also helps our member states to reduce load shedding as they can access excess power on the market.
“Trading varies from time to time and we tend to trade a lot during off-peak periods.”
Out of SAPP’s nearly 47 000 MW available operating generation capacity, 21 percent of this is from hydro generation.
Zambia and Zimbabwe are experiencing serious power shortages following low levels of water on all infrastructure that is used to generate electricity. Kariba generation output is currently constrained to around 50 percent of the total capacity due to water restrictions. South Africa provides more than 80 percent of the total generation capacity of the SADC region.
It is predominantly coal generation with a hydro component of around 21 percent, coal 70 percent, nuclear 3 percent and others 6 percent -renewable, distillate and Combined Cycle Gas Turbine (CCGT).
“When there is drought, the limitation is basically on the energy output (MWh) from the generation stations which eventually also limits the MW output from the affected hydro stations,” says Dr Lawrence Musaba, head of the Southern African Power Pool.
“As an example Kariba currently is operating at around 50 percent of its installed capacity (around 475MW on the Zimbabwean side from installed capacity of 750MW). The output may vary from time to time but the water allocation would determine the energy output over time.”
Sadc countries are pressing ahead with massive investment in the power sector to help the region attain its long- term energy targets.
SAPP aims to achieve a renewable energy mix in the regional grid of at least 32 percent by 2020 and 35 percent by 2030. Sources in the energy sector say SAPP must move with speed to enlist Angola which is developing hydro power projects with a capacity to generate more than 4 500 MW.
This year, Angola announced plans to spend US $23,3 billion on water and electricity projects over the next two years as Africa’s second-largest crude producer deals with plunging oil prices.
The southwest African country is targeting the development of 65 energy and water projects by 2017, according to media reports.
Despite numerous challenges facing the region’s energy sector, SAPP says Southern Africa plans to commission new projects that will add 2 763 megawatts to the regional grid this year as the region targets to meet its energy needs by 2018.
According to a Sardc report, of the planned capacity from the 13 projects being undertaken in six SADC countries, the majority will come from South Africa where at least five projects are targeted for commissioning this year, producing an additional 1 828MW for the regional grid.
SAPP further expects another significant contribution to the regional power grid to come from the Democratic Republic of Congo, which is due to add 430MW this year.
Coal will contribute the largest share of the new generation capacity in South Africa, with the coal-fired Medupi Power Station expected to have additional capacity of 738MW by the end of this year.
Even though calls for the region to increase its uptake of clean energy were growing, engineers from SAPP region warned that member states needed to tread with caution as this came with hidden cost and risks.
Dr Russe said the region needs to undertake studies to see how best it could add renewables on its grid as countries such as Spain and Norway which had adopted cleaner energy had to grapple with power black outs due challenges related to power back-up and other problems.
“Before we dive head-long into renewables we need guidelines, we need a clearing house at SAPP level to address some of the problems that may arise,” said Engineer Ikhupuleng Dube of ZESA (Zimbabwe’s power utility), adding that:
“We need to adopt certain best practices into the implementation of such systems.”
Said Dr Russe: “You have to do what is best for you and take care of what is not good for you. You need to have a strong regulatory authority regime to implement some of the energy issues facing the region.
“Spain and the Cape Verde experienced load problems when they connected renewables to the grid. It’s very important to have rules to manage changes that may occur to power supply from renewable supply stations.”
Sardc.net also reported that gas is becoming a major contributor of energy in the region as five of the projects to be commissioned are gas-fired, with South Africa expected to contribute 435MW from cogeneration capacity between the national power utility ESKOM and an Independent Power Producer (IPP).
New power projects were also commissioned in Zimbabwe and Mozambique.
“Zimbabwe has four notable IPP hydropower stations, one of which – the Pungwe – is expected to be commissioned this year and contribute 15MW to the power grid,” the Sadc information and dissemination centre reported.
“The Ressano Garcia and Kuvanianga power stations in Mozambique are also run by IPPs and are expected to add 175MW and 30MW respectively to the regional grid.”
Prospects look bright for the region’s energy sector and SAPP is confident that the region will commission 24 062 MW of power between 2015 and 2019 if all proposed projects come on stream.
Observers say this development will see the region finally meeting its power needs after several years of shortages.
Since 2007, most Sadc countries have been facing serious power deficits forcing them to implement demand-side management policies such as load shedding to avert power black-outs.
Power trade among Sadc countries has diminished incidents of blackouts and engineers hope with the coming on stream of several energy projects, massive power cuts will ease and bring the much needed economic growth in the region.
Incidents of blackouts usually happen due to loss of generation units or heavy loads in peak times on interconnected networks.
Explaining the crucial role of electricity in the socio-economic development and the correlation between economic growth and electricity consumption and investment, Eng Beta said the interconnected SAPP electricity network saves fuel expenses used to generate energy and also helps reduce production and operation expenses of electricity generation in the SAPP networks.
He also said this also leads to savings in the operational costs as energy import and exchange become cost effective.
The SADC region is endowed with large rivers including the Congo and Zambezi, with the Inga Dam situated on the Congo River having the potential to produce about 40 000MW of electricity, according to SAPP.
Observers say the level of renewable energy penetration and use across the region still remain low, and to support market expansion in renewable energy, SADC has developed a comprehensive plan on how the region could fully harness its renewable energy potential.
The EU – SAPP project meeting sought to highlight the tasks that are required to bring more liquidity into the markets and promote efficient cross-border trading in the medium and short term while at the same time highlighting some of the required changes to the structure of the market focusing especially on the regulatory role.
The meeting also called for targeted investments, enabling policies and capacity building to support the region’s transition to a low-carbon, resource-efficient green economy.
Callixte Kambanda, an energy expert, writes that power trading in Africa started in the 1950s, in the form of bilateral agreements between Democratic Republic of Congo and Zambia.
This trade involved a 500 kV high voltage DC power supply that was 1,700 km in length. Other bilateral agreements followed in different parts of the continent until the development of the first power pool – The Southern Africa Power Pool (SAPP) in 1995.
Others that were later created to promote energy trade between member countries on the continent included the Western Africa Power Pool (WAPP) in 2001, Central Africa Power Pool (CAPP) and the Eastern Africa Power Pool (EAPP), in 2003 and 2005 respectively.
The latter two power pools are still in the developmental stage while the EAPP moved forward very quickly.
The North African countries have an Association of Power Utilities, the “Comité Maghrébin de l’Electricité (COMELEC)” established in 1989.
All four power pools in South, West, Central and East Africa and COMELEC are recognized, specialized institutions in their respective regional economic trading blocs.