West Africa’s road to an interconnected electricity market
Sub-Saharan Africa is known for its poor developmental indicators. In terms of electricity, the region reportedly has the lowest electricity generation capacity. Indeed, the quality of electricity supply is also the world’s worst, as it is rated as the most acute forms of energy poverty in the world, considering that as much as about 630 million people live without reliable access to electricity. Similarly, over 790 million people rely on biomass to cook.
The prevailing development informed ECOWAS adopting the WAPP approach of integrating national power systems across the countries into a unified regional electricity market with the ultimate goal of providing in the medium and long term, regular and reliable energy at a competitive cost to the citizenry of the region.
From a Membership of 13 at its inception, WAPP today has 35 members comprising public and private electricity companies operating in all segments of the electricity supply value chain and it is at the verge of interconnecting all mainland ECOWAS member states as well as the completion of the WAPP Information and Coordination Center that intends to manage the ‘regional electricity market.
Already, an ECOWAS Master Plan for the Development of Regional Generation and Transmission Infrastructure has been developed with identified priority projects from 2019 to 2033 at the cost of $36.4 billion. The master plan was adopted by the ECOWAS Ministers in charge of energy on December 4, 2018, and later assented to by the ECOWAS Heads of State and Government on December 22, 2018.
Considering that the region is also slow in terms of economic, industrial and employment indices, it is expected that WAPP’s efforts could yield socioeconomic benefits and uplift the well-being of the ECOWAS citizenry as the move is expected to spur confidence and attract the private sector to take up investments without anxiety and improve cross border trades among the ECOWAS Member States.
As laudable as the plans are, stakeholders, including the WAPP Chairman, who doubles as the Managing Director of Transmission Company of Nigeria (TCN), Usman Muhammed believes that inherent challenges across the electricity value chain in the ECOWAS countries could undermine WAPP’s objectives.
For instance, most experts noted that it could be difficult for the region to have a seamless and efficient regional power grid, considering grid collapse has remained a critical challenge for most electricity customers in countries like Nigeria, which houses over 50 per cent of the population of the entire sub-region.
While Nigeria’s power grid has collapsed about 100 times in the last six years, the situation has occurred eleven times this year, as the system collapsed two times last weekend, indicating that the challenge was far from over.
WAPP chairman had equally noted that the attainment of market functionality and the existence of the right knowhow to manage both technical as well as market-related issues remain barriers to the goals of WAPP.
Indeed, WAPP efforts can only become meaningful if important infrastructural gaps are bridged and market development issues affecting the power utilities companies are addressed. From frequent power outages, estimated billing and financial liquidity arising from Aggregate Technical and Commercial losses, consumers in the region are reportedly paying the highest for electricity in the world despite poor service delivery.
Similarly, some stakeholders have raised concerns about the governance of the regional electricity sub-sector, adding that healthy and performing utilities and cable of meeting obligations on time are critical success factors for the sustainable advancement of the market.
The Executive Secretary, Association of Power Generation Companies (APGC), Dr Joy Ogaji has noted that traditional challenges affecting the electricity sectors across the region, if not addressed would truncate the regional plan.
Ogaji, who acknowledged that the region is remarkable in making good programmes, decried that poor implementation of programmes, especially in terms of projects remained a critical barrier that may affect the initiative.
Unless WAPP and donors like the World Bank adopt proactive measures in implementing and monitoring how projects are awarded and fully completed, the goals of the initiative may remain a mirage, ogaji noted.
President Muhammadu Buhari, who was invited to the 14th WAPP General Assembly and represented by the Secretary to the Federation, Boss Mustapha had equally raised concern on the impact of corruption on the region’s plan. Like the situation is in Nigeria, it is critical to note that there are a number of power sector projects that have been awarded and either abandoned or poorly implemented.
While the lack of power undermines investment, employment creation and economic growth, costing Africa about 4 per cent of its Gross Domestic Product (GDP), the concern for some stakeholders is the need for a sustainable approach that would prioritise renewable energy and finding ways to mitigate climate change challenges while exploring energy options.
To bridge the energy gap, some operators in the renewable energy sector, have also urged stakeholders to embrace renewables.
Marketing Manager, Jubaili Bros Engineering, George Kai, explained that the initial cost of adopting the renewable solution as well as access to funding are critical issues that are limiting the growth of renewables.
Considering the cost of the project at the initial stage, Kai urged off-takers to explore financing options as people are skeptical about their capital expenditure.
On how to bridge the energy gap, Pradipta K. Mitra, Market Research Specialist Greenville Liquefied Natural Gas (LNG), observed that the claim that electricity can’t be supplied nationwide would be erased when the government promotes more investment to harness LNG in Nigeria, adding that if such projects can be replicated, the power problem would gradually be solved.
Mitra explained that LNG offers huge cost savings as against other fossil fuel products, adding that the firm is already supplying LNG to many industrial customers and noted that 200 tankers have been deployed with 100 more tankers underway.
President Women in Renewable Energy Association/Former President of the Council on Renewable Energy, Mrs. Anita Okuribido, said the biggest consumers of electricity (ministries, departments, and agencies) in the country are not willing to pay, adding that there is a need for smart energy delivery system in the energy value chain.
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