Ramping up distributed renewables could help solve persistent load shedding problems in southern Africa

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The Southern African Power Pool (SAPP) is the most active power pool in Africa. It consists of 12 countries and is home to 360 million people. The total installed generation capacity in the region is 80 GW. Peak demand in the region is 57 GW, but available capacity is only 48 GW according to SAPP figures, leaving a huge electricity generation shortage. The most affected member states are South Africa, Zambia and Zimbabwe, where citizens face regular electricity rationing cycles known as load-shedding. `

The electricity generation mix in the South African Power Pool is dominated by coal. Coal's share is 59% (mainly from South Africa and places like Zimbabwe), followed by hydropower at 24%, solar power at 4%, distillate at 3.8%, then wind power, nuclear power (South Africa ) with 3% and open cycle gas. turbines at 2%.

The SAPP operates four competitive electricity markets between twelve member states. It has been facilitating trade between utilities in southern Africa since 1995. Active Member States include Namibia, South Africa, Lesotho, Eswatini, Zimbabwe, Botswana, Mozambique, Zambia, Malawi and the DRC, which are mainly represented by each country's national utility company.

A recent presentation by Eng. Alison Chikova, Chief Engineer at the Southern African Power Pool, shows that 9 countries are currently connected at the transmission level, while 3 countries are not yet connected to the SAPP grid. Malawi is connected via the Mozambique – Malawi Interconnector and Tanzania is connected via the Zambia – Tanzania Interconnector, which will lead to interconnection of SAPP and the East African Power Pool as Tanzania is also connected to Kenya. Angola will be connected to Namibia, DRC and Zambia.

SAPP's trading arrangements are intended to achieve SAPP's vision, which is to:

• Facilitating the development of a competitive electricity market in the Southern African region.
• Give the end user a choice in the electricity supply.
• Ensure that the Southern African region is the region of choice for investments by energy-intensive users.
• Ensure sustainable energy developments through sound economic, environmental and social practices.
• STEM was initially used in SAPP and currently the DAM system is used. The pool changed from a cooperative to a competitive pool

SAPP markets

Bilateral market The objectives of bilateral trade are mainly aimed at meeting the long-term supply and demand balance

• Trade agreements mutually agreed upon between bilateral parties
• Volumes and prices are the most important parameters
• Transmission path must be secured in advance
• Can be firm or non-firm
  • Permanent contracts
    • Provide penalties for non-delivery and
    • Generally uninterruptible – reliability premium
  • Non-permanent contracts
    • Are interruptible with notice
    • No penalties for cancellation
    • Generally less than 75% reliable.

Future physical markets — Competitive trading of monthly or weekly contracts (or other defined periods longer than one day in advance) for future delivery according to the contract specifications.

The following energy contracts can be traded:

• FPM-Monthly trades hourly baseload energy contracts for each of the 24 hours of all days in the following month.
• Hourly base load contracts for energy for the following time of use contracts with different hourly patterns, valid for all days of the following month
• Off peak
• Non-off peak hours
• The hourly energy contracts from FPM-Weekly Trade for the following time of use contracts with different hourly patterns, valid for all days of the following week:
  • Off peak
  • Peak hours
  • Standard

Day Ahead Market –– The regional market set up within the SAPP for the purpose of trading electricity one day before the delivery of such transactions.

• Hourly energy contracts for each of the 24 hours of the next day or a future day.

Intra-day market — The IDM is a continuous market and trading takes place daily, 24 hours a day, until one hour before delivery. Prices are determined on a first come, first served basis.

• Hourly energy contracts for one or more hours for periods as specified by the SAPP market operator.

The persistent burden-shedding problems faced by South Africa, Zambia and Zimbabwe can be solved by unlocking the full potential of the South African power pool and the East African power pool once fully activated. It is therefore important to prioritize the planned connections between Tanzania and Zambia and those of Angola with Namibia, the Democratic Republic of Congo and Zambia. Looking at the table below from SAPP, Angola had an excess capacity of approximately 2.4 GW. Some of this could be adopted by other members of the SAPP if necessary to alleviate some of the shortcomings.

Tanzania recently announced this the company curtailed generation at some of its hydropower plants due to excess generation capacity due to heavy rainfall so far this season. This excess capacity could have been very valuable if it had been injected into the SAPP. Since Tanzania will also be connected to Kenya, and Kenya will be connected to Ethiopia, Ethiopia's hydropower resources could also be quite valuable to the SAPP and the East African Power Pool once they are fully operational.

In the medium to long term, the wind potential of Kenya and Ethiopia, as well as Kenya's large geothermal potential, could also be unlocked to add valuable renewable energy sources to the mix for the East African Power Pool and feed them into the Southern African Power Pool. All SAPP member states will of course also have to ramp up all their own electricity generation projects, which cumulatively will help bridge the current generation gap of at least 11 GW.

While the larger generation projects can participate in the Southern African Power Pool, there is also an incredible opportunity for thousands of small distributed renewable energy projects, such as small hydro and rooftop solar in the C&I and residential sectors, to contribute to the local energy mix of each of these countries. We've seen the impact that rooftop solar can have in places like Australia, where there are more than 3 million homes with rooftop solar. Rooftop solar now accounts for 11.2% of Australia's electricity supply, with households and businesses playing a leading role in Australia's sustainable energy transition. according to the Clean Energy Council's new Rooftop Solar and Storage Report. In Australia, 2.9 GW of rooftop solar from 314,507 units was installed in 2023, and rooftop PV exceeded Australia's total installed capacity of 20 GW.

Closer to home, we have also seen how quickly distributed solar power plants can add good capacity. In South Africa, From March 2022 to June 2023, 3 GW of solar energy was added in just over a year in the C&I and Residential solar sectors.

Another crucial area that SAPP member states need to focus on is increasing access to electricity for their citizens, as none of the member states have yet managed to achieve universal access to electricity for their citizens. Access to electricity is still quite low and many Member States are still below 50%. There is still a lot of work to be done in this regard and therefore accelerating and expanding planned interconnection projects, as well as accelerating planned generation projects, including distributed renewables, will go a long way in increasing access to electricity.