Power Trade Project

Capacity Building for Shadow Market

Shadow Market Operations

Operationalization of power market trade and network integration under the EAPP will revolutionize cross-border power exchanges thereby greatly improving access to affordable and reliable electricity in the Region. It will enable countries to gradually move away from PPAs, which do not facilitate efficient power trade, since such arrangements are based on rigid long-term contracts. Such rigid arrangements have stifled regional power trade within existing interconnectors and do not provide the inspiration for more countries to engage in cross-border power trade. Power trade through the EAPP will enable short term exchanges based on day-ahead planning of operations, where covering of the load takes generation from adjacent countries into account in systematic way. The main difference between short- and long-term trade is the determination of power price used for settlement of power exchanged between the countries.

Operationalization of the EAPP, coupled with the adoption of appropriate regulations such as wheeling arrangements will enable the integration of the EAPP and the Southern Africa Power Pool (SAPP), thereby creating the largest power market anywhere in the world, spanning from Cape Town in South Africa to as far north as Cairo in Egypt.

The Power Trade Project Capacity Building Project

The rationale of this project is to address the capacity weaknesses of the EAPP and its member utilities and regulators to operationalize the regional power market trade. The Project is supported by the Africa Development Bank as part of its strategy for complementing its investments in regional power generating plants and electricity transmission lines by focusing on capacity-building activities identified training needs and delivery methods for system operations staff. Financing the proposed Project will ensure the Bank’s continued involvement and support for regional integration in the power sector in Eastern Africa. Capacity Building Areas for the Power Trade project include Content development for key power Market principles and applications which include Power markets and Power Pool Development, Markets Design, Market Rules, this also includes all market enabling methodologies i.e., wheeling charges, transmission access, inadvertent energy management (imbalances) congestion management, control area services, regulating reserves, losses management, etc.

The project is expected to be completed by end of 2023