Bringing power and progress to Africa in a financially and environmentally sustainable manner

EXECUTIVE SUMMARY: The future of electricity supply and delivery on the continent of Africa represents one of the thorniest challenges facing professionals in the global energy, economics, finance, environmental, and philanthropic communities. Roughly 600 million people in Africa lack any access to electricity. If this deficiency is not solved, extreme poverty for many Africans is virtually assured for the foreseeable future, as it is widely recognized that economic advancement cannot be achieved in the 21st Century without good electricity supply. Yet, if Africa were to electrify in the same manner pursued in developed economies around the world during the 20th Century, the planet’s global carbon budget would be vastly exceeded, greatly exacerbating the worldwide damages from climate change. Moreover, due to low purchasing power in most African economies and fiscal insolvency of most African utilities, it is unclear exactly how the necessary infrastructure investments can be deployed to bring ample quantities of power – especially zero-carbon power – to all Africans, both those who currently are unconnected to any grid as well as those who are now served by expensive, high-emitting, limited and unreliable electricity supply. With the current population of 1.3 billion people expected to double by 2050, the above-noted challenges associated with the African electricity sector may well get substantially worse than they already are – unless new approaches to infrastructure planning, development, finance and operation can be mobilized and propagated across the continent. This paper presents a summary of the present state and possible futures for the African electricity sector. A synthesis of an ever-growing body of research on electricity in Africa, this paper aims to provide the reader a thorough and balanced context as well as general conclusions and recommendations to better inform and guide decision-making and action. [TRUNCATED]This paper was developed as part of a broader initiative undertaken by the Institute for Sustainable Energy (ISE) at Boston University to explore the future of the global electricity industry. This ISE initiative – a collaboration with the Global Energy Interconnection and Development Cooperation Organization (GEIDCO) of China and the Center for Global Energy Policy within the School of International and Public Affairs at Columbia University – was generously enabled by a grant from Bloomberg Philanthropies. The authors gratefully acknowledge the support and contributions of the above funders and partners in this research

Current and forthcoming issues in the South African electricity sector

One of the contentious issues in electricity reform is whether there are significant gains from restructuring systems that are moderately well run. South Africa's electricity system is a case in point. The sector's state-owned utility, Eskom, has been generating some of the lowest-priced electricity in the world, has largely achieved revenue adequacy, and has financed the bulk of the government's ambitious electrification program. Moreover, the key technical performance indicators of Eskom's generation plants have reached world-class levels. Yet the sector is confronted today with serious challenges. South Africa's electricity system is currently facing a tight demand/supply balance, and the distribution segment of the industry is in serious financial trouble. This paper provides a careful diagnostic assessment of the industry and identifies a range of policy and restructuring options to improve its performance. It suggests removing distribution from municipal control and privatizing it, calls for vertical and horizontal unbundling, and argues that the cost-benefit analysis of different structural options should focus on investment incentives and not just current operating efficiency.Energy Production and Transportation,Electric Power,Environment and Energy Efficiency,Energy and Environment,Infrastructure Economics

Power Sharing: Developing Inter-Provincial Electricity Trade

Canada needs a “Made-in-Canada” approach to electricity transmission that better exploits the benefits of east-west power trading. In this study, the author explains how to overcome the impediments to electricity trading that currently exist at provincial borders. To ensure continued access to US markets, most Canadian provinces have complied with US electricity trading rules. But when transplanted in Canada these rules limit provinces with competitive electricity markets, where electricity customers may choose among suppliers (Alberta and Ontario), in sharing the benefits of trade with their neighbouring monopoly utilities (such as in British Columbia, Manitoba, or Quebec). Some provinces rely mostly on hydroelectric generation, while others rely more on fossil or nuclear-fuelled generation. Carr says Canada would benefit from more electricity trading on an east-west axis because the sharing of different forms of electricity generation – and time-zone diversity – would allow better use of each province’s generation capacity. Carr makes several specific recommendations for provincial action. He also recommends the federal government support provincial initiatives in the event of NAFTA challenges.Economic Growth and Innovation, Canada, electricity, inter-provincial trade, NAFTA

Agglomerative Magnets and Informal Regulatory Networks: Electricity Market Design Convergence in the USA and Continental Europe

The absence of one broadly accepted design template for liberalised electricity markets induces regulatory competition and institutional diversity. Focussing on continental Europe and the USA, this analysis explores how agents and structures accelerate or impede the move to one standard market design in the electricity sector. It reveals that market design convergence in Europe is driven by the 'Florence Consensus,' a tripartite coalition between the European Commission fostering European integration and the internal market, informal regulatory networks between grid operators, standardisation authorities and regulators, who have been coordinating their actions in the 'Florence Forum,' and epistemic communities exemplified in the Florence School of Regulation. In contrast, the United States' Federal Energy Regulatory Commission lacks support among politicians, many states' public utility commissions, the neo-liberal intelligentsia and even industrial lobbying groups to effectively push for a standardised market design. However, design convergence in the USA may be induced by the gradual expansion of multi-state markets operated by regional transmission organisations.Electricity, Deregulation, Regulatory Competition, Policy Diffusion

MORE THAN SMART: A Framework to Make the Distribution Grid More Open, Efficient and Resilient

This paper is the result of a series of workshops with industry, government and nonprofit leaders focused on helping guide future utility investments and planning for a new distributed generation system. The distributed grid is the final stage in the delivery of electric power linking electricity sub-stations to customers. To date, no state has initiated a comprehensive effort that includes the planning, design-build and operational requirements for large scale integration of DER into state-wide distributed generation systems. This paper provides a framework and guiding principles for how to initiate such a system and can be used to implement California law AB 327 passed in 2013 requiring investor owned utilities to submit a DER plan to the CPUC by July 2015 that identifies their optimal deployment locations

Implementing Electricity Restructuring: Policies, Potholes, and Prospects

Electricity is one of the last U.S. industries in which competition is replacing regulation. We briefly review the technology for producing and delivering power, the history of electricity policy, and recent state and international experience. We then outline the major questions facing policymakers as they decide whether, when, and how to implement restructuring. We conclude with some thoughts on the California electricity crisis and other political controversies. Although the California experience has come to define what it means for electricity markets to fail, most of the problems it raised are among those we know how to solve or prevent. The still unresolved make-or-break issue remains whether the cooperation necessary to maintain reliability is compatible with the degree of competition necessary to bring about greater efficiency and lower prices. This paper draws upon our forthcoming book, Alternating Curents: Electricity Markets and Public Policy.electricity restructuring, regulation, deregulation

Combined Operational Planning of Natural Gas and Electric Power Systems: State of the Art

The growing installation and utilization of natural gas fired power plants (NGFPPs) over the last two decades has lead to increasing interactions between electricity and natural gas (NG) sectors. From 1990 to 2005, the worldwide share of NGFPPs in the power generation mix has almost doubled, from around 10% to nearly 19%; reaching in 2007, for instance, the 54% in Argentina, the 42% in Italy, the 40% in USA, and the 32% in UK (IEA, 2007; IEA, 2009a). The installation of NGFPPs has been driven by technical, economic and environmental reasons. The high thermal efficiency of combined-cycle gas turbine (CCGT) power plants and combined heat and power (CHP) units, their relatively low investment costs, short construction lead time and the prevailing low natural gas prices until 2004 have made NGFPPs more attractive than traditional coal, oil and nuclear power plants, particularly in liberalized electricity markets. Additionally, burning NG has a smaller environmental footprint and a lower carbon emission than any other fossil fuel. Under the light of all conditions previously described, there is a strong and rising interdependency between NG and electricity sectors. In this context, it is essential to include NG system models in electric power systems operation and planning. On the other hand, NG system operation and planning require, as input data, the NG demands of each NGFPPs, which accurately values can only be obtained from the electric power systems dispatch. Therefore, several approaches that address the integrated modeling of electric power and NG systems have been presented. These new approaches contrast with the current models in which both systems are considered in a decoupled manner.Fil: Rubio Barros, Ricardo German. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - San Juan; Argentina. Universidad Nacional de San Juan. Facultad de Ingeniería. Instituto de Energía Eléctrica; ArgentinaFil: Ojeda Esteybar, Diego Mauricio. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - San Juan; Argentina. Universidad Nacional de San Juan. Facultad de Ingeniería. Instituto de Energía Eléctrica; ArgentinaFil: Año, Osvaldo. Universidad Nacional de San Juan. Facultad de Ingeniería. Instituto de Energía Eléctrica; ArgentinaFil: Vargas, Alberto. Universidad Nacional de San Juan. Facultad de Ingeniería. Instituto de Energía Eléctrica; Argentin