Regional power trade in Africa: the different institutional and regulatory models of African power pools

Abstract

In Africa, regional electricity markets are being developed through the establishment of five power pools to promote power trading between countries in different regions. Experience from regional electricity markets around the world has shown that ineffective regional governance and flawed rules for regional trading and network cost allocation are the main obstacles to realising the benefits of well-designed regional markets. In addition to focusing on regional institutions and governance, this chapter provides new information on the historical development of power trading and its current organisation across the African continent. It also presents a comparative case study of the five African power pools. The chapter makes use of a general model of regional power trade organisation to facilitate the analysis of the institutional and regulatory models of SAPP, WAPP, CAPP, EAPP, and COMELEC. It also examines the political economy of regional cooperation to show how national interests and trade agendas have shaped the development. Finally, the chapter concludes by highlighting the institutional gaps in each region and emphasising the role of regulation in advancing power trade on the continent.In Africa, regional electricity markets are being developed through the establishment of five power pools to promote power trading between countries in different regions. Experience from regional electricity markets around the world has shown that ineffective regional governance and flawed rules for regional trading and network cost allocation are the main obstacles to realising the benefits of well-designed regional markets. In addition to focusing on regional institutions and governance, this chapter provides new information on the historical development of power trading and its current organisation across the African continent. It also presents a comparative case study of the five African power pools. The chapter makes use of a general model of regional power trade organisation to facilitate the analysis of the institutional and regulatory models of SAPP, WAPP, CAPP, EAPP, and COMELEC. It also examines the political economy of regional cooperation to show how national interests and trade agendas have shaped the development. Finally, the chapter concludes by highlighting the institutional gaps in each region and emphasising the role of regulation in advancing power trade on the continent.