Regional Power Market Development
Development of the EAPP Regional Power Market
The objective of the EAPPs region power sector transition towards a market-based structure is to foster competition and lower costs of supply. However, EAPP is of the view that countries should be able to undertake this transition at their own pace with power exchanges at the pool level while respecting individual country’s rules and regulations. Currently, there is significant investment in transmission lines between countries and the region is soon set to transition from four (4) synchronous areas into two (2) synchronous areas – after the energization of the Egypt – Sudan
interconnector (when Egypt and Sudan are synchronized following the installation of static var compensation on the Sudanese side of the network by the end of 2022, when the capacity will increase to 300 MW.) and the Rwanda – Uganda interconnector by the end of 2021. Tanzania, on the completion of the Kenya – Tanzania interconnector (expected in 2023), will join the synchronized area with Kenya.
Although there will be two synchronous areas, these will be interconnected via the HVDC link (Ethiopia-Kenya) so that, from a market perspective, they can operate as one. In addition, the Tanzania – Zambia interconnection (under implementation and expected by 2025) will enable trade with SAPP. The grid will be the backbone used to transport power from countries in surplus (or lower cost) to those in deficit (or higher costs), reducing costs for importing countries by mitigating against the need to import costly liquid fuels whilst providing export revenue to exporting countries and at the same time providing greater system stability through the sharing of reserves. In order to facilitate energy exchange, as well as efficiently operate the interconnected system, the EAPP requires a well thought out market that will facilitate the trade of energy and provide a framework for use of transmission capacity between countries with binding and enforceable rules and procedures to ensure that national systems can interoperate
efficiently.
Completed preparatory activities
- In 2011 EAPP prepared and launched a Roadmap covering 15 years from 2010 – 2025. The Roadmap pointed direction, and concrete steps for the development of the regional power market.
- In 2014 he EAPP also undertook a “Shadow market” operation in 2014. This was a pilot project done to simulate short-term trade based on day ahead market principles, along two interconnectors in the region i.e. Kenya-Uganda and Ethiopia-Sudan
- Preparation of the market rules for Day Ahead Market, market procedures for daily operations and market guidelines which were done 2014 under the Market Study Report.
- Establishment of a Market Working Group (MWG) for the purpose of working on issues related to the EAPP Power Market. The MWG has since been transformed into a Market Committee (MC) and operationalized.
- Preparation of a ten year Strategic Plan and associated three years Action Plan. The documents, among other things, established activities and actions required to operationalize a regional power trade. The Strategic Plan and Action plans for the next 10 yers has been approved by the Steering commitee and Council of Ministers
On going Actvities
- Design of the EAPP power market (Phase 1). The objective of this phase is to provide a conceptual design of the power market for the EAPP region, including aspects such as a Day Ahead Market compatible with the SAPP, an Intra-Day Market, a forward market, balancing market, cash out (imbalance settlement), and market(s) for ancillary services. The Final Market Design has been completed and the report is available below
- Drafting of Rules for the EAPP centrally organized power market consistent with the design identified in Phase 1. Phase 2 has the objective of drafting the detailed legal text for EAPP’s centrally organized power market, comprising the market rules which will need to be agreed and preparing required agreements including those to accede to the market, and supporting the EAPP in managing organized power market.
- Implementation of the EAPP centrally organized power market. Phase 3 has the objective of developing and implementing the power market, including developing and delivering the trading platform, software, hardware, other systems and operating procedures in line with the market rules, testing and implementing the systems and taking the market live
- EAPP is also set to restart operation of the “Shadow market” in 2022 mainly as a capacity building exercise for the Market Commitee but with a renewed focus on all thenterconnected areas – day ahead market as well as the resultant balancing market. full Details of the Shadow Market Capacity Building is availble here
- Facilitating trade with SAPP. The construction transmission line will interconnect Tanzania and Zambia is currently underway. The interconnection will open up the opportunity for trade between countries in the EAPP and SAPP
Market Development Documents
This Market Design Report has been prepared by a consortium of Nord Pool Consulting AS and Ricardo Energy and Environment as the final delivery of the project with reference number ET-EAPP-186205-CS-CQS, covered by the Tanzania-Zambia Transmission Interconnector (P163752) and the technical assistance to the EAPP under grant number D350. The project was agreed on February 4th, 2021. The objective of this project was to develop a design for the EAPP power market that provides the framework for drafting the legal text of the market rules, codes, procedures and agreements in future. This final report from this project covers a recommended design of a market for all 11 member countries of EAPP as well as potential market integration with countries within the Southern Africa Power Pool (SAPP).
| MARKET DOCUMENTS | DOWNLOAD LINK |
|---|---|
| A Road Map for Increasing Regional Power Trade in Eastern Africa (2022) – Booklet | |
| Final EAPP Market Design Final Report (2022) |
