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IHA Congress 2011 - Global Workshop - Jasper Oduor


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IHA Congress 2011 - First Global Workshop on Regional Cooperation for Hydropower Development - Jasper Oduor

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IHA Congress 2011 - Global Workshop - Jasper Oduor

  1. 1. EASTERN AFRICA POWER POOL The Business Case For International Power Trading Advancing Sustainable Hydropower 14 th – 17 th June 2011 IGUASSU, BRAZIL Jasper Oduor Executive Secretary [email_address]
  2. 2. CONTENTS <ul><li>EAPP Objectives </li></ul><ul><li>Implementing Objectives </li></ul><ul><li>On-going Projects </li></ul>
  3. 3. EAPP OBJECTVIES <ul><li>Secure power supply for the Region’s countries </li></ul><ul><li>Facilitate the development of electricity market in the region </li></ul><ul><li>Optimize energy resources usage through socially, economically and environmentally acceptable investment schemes in generation, transmission and distribution. </li></ul><ul><li>Increase power supply to raise regional access to electricity </li></ul><ul><li>Reduce regional electricity cost using interconnection and increased power exchanges among countries </li></ul>
  4. 4. Implementing the Objectives <ul><li>Set up the Frameworks (Policy, Legal, Institutional, Regulatory). Review and update as appropriate </li></ul><ul><li>Assess the Market potential, </li></ul><ul><li>Develop Strategic Roadmap and Implementation Plan </li></ul><ul><li>Develop a business Plan </li></ul><ul><li>Set up the Trading Rules </li></ul><ul><li>Set up the Inter-connection Codes (Regional Grid Codes) </li></ul>
  5. 5. Implementing …… <ul><li>Set up Agreement Templates </li></ul><ul><li>Capacity Building </li></ul><ul><li>Regional Master Plan (Generation and Inter-connectors </li></ul><ul><li>Revise the governance Structure </li></ul>
  6. 6. Structure 1. EAPP Organizational Structure Supervisory Committee Executive Secretary Permanent Secretariat CEO & RMOC Board Regional Market Operations Centre Strategy
  7. 7. Structure Cont.. 2. Permanent Secretariat Governance & Organiz. Structure Supervisory Committee Database & Information Centre Regional Planning , Projects & Environmental EAPP Steering Committee Technical Working Groups Permanent Secretariat Units Executive Secretary Finance & Admin
  8. 8. Structure 3. RMOC’s Governance & Organization Structure RMOC Units Market Operation Settlement Finance and Admin Conference of Ministers EAPP Steering Committee Regional Market Operations Board (CEO & Unit Heads) System Operation Coordination
  9. 9. ONGOING PROJECTS <ul><li>EU : Technical assistance and </li></ul><ul><li>Capacity Building Project </li></ul><ul><li>USAID : Powering Progress </li></ul><ul><li>MFA Norway : Regional Coordination </li></ul><ul><li>Centre and Regional Regulator Project </li></ul><ul><li>UNDESA : Power Pool Study tours and trainings </li></ul><ul><li>AfDB Power Master Plan and Grid Code </li></ul>
  10. 10. EASTERN AFRICA MASTER PLAN <ul><li>Project Background </li></ul><ul><ul><li>NEPAD-IPPF/AfDB Financing (1.7 Mil US$); Project managed by AfDB) </li></ul></ul><ul><ul><li>Consultant is SNC LAVALIN in partnership with PB (PARSONS BRINCKERHOFF) </li></ul></ul><ul><ul><li>Project started with the kick-off meeting on Oct 5, 2009, completed March 2011 </li></ul></ul><ul><ul><li>Additional Work on the Eastern Interconnector 1, completed May 2011 </li></ul></ul>
  11. 11. EASTERN AFRICAN MASTER PLAN Cont.. <ul><li>Project Objectives </li></ul><ul><ul><li>Identify power generation and interconnection projects at master plan level to connect EAC and EAPP countries. </li></ul></ul><ul><ul><li>Develop a common grid code for the EAPP and EAC countries to foster integrated development and operation of power systems in the region </li></ul></ul><ul><ul><li>Regional capacity building </li></ul></ul>
  12. 12. EASTERN AFRICAN MASTER PLAN Cont.. <ul><li>Project Scope </li></ul><ul><ul><li>Geographic coverage: </li></ul></ul><ul><ul><li>The project covers ten Eastern Africa countries: </li></ul></ul><ul><ul><li>Time Horizon: </li></ul></ul><ul><ul><ul><li>Envisages a 25 year horizon ( 2013 to 2038); </li></ul></ul></ul><ul><ul><ul><li>Detailed plan for the first five years. </li></ul></ul></ul>Burundi Djibouti DRC Ethiopia Kenya Rwanda Sudan Tanzania Uganda Egypt
  13. 13. EASTERN AFRICAN MASTER PLAN Cont.. <ul><li>Deliverables </li></ul><ul><ul><ul><li>Power System Analysis, and Demand Forecast </li></ul></ul></ul><ul><ul><ul><li>Economic and Financial Analysis </li></ul></ul></ul><ul><ul><ul><li>A Regional Generation Master Plan </li></ul></ul></ul><ul><ul><ul><li>A Regional Transmission Master Plan </li></ul></ul></ul><ul><ul><ul><li>Investment Plan and Funding Sources </li></ul></ul></ul><ul><ul><ul><li>A Regional Grid Code </li></ul></ul></ul><ul><ul><ul><li>Institutional Capacity Assessment </li></ul></ul></ul><ul><ul><ul><li>Training and Workshops </li></ul></ul></ul><ul><ul><ul><li>All the above have been completed and final report prepared </li></ul></ul></ul>
  14. 14. EASTERN AFRICAN MASTER PLAN Cont.. <ul><ul><li>Project Organization </li></ul></ul><ul><ul><ul><li>The EAPP was the implementing agency for the Master Plan Project. </li></ul></ul></ul><ul><ul><ul><li>The project had the following governance structure. </li></ul></ul></ul>
  15. 15. EASTERN AFRICAN MASTER PLAN Cont.. <ul><li>Harmonization </li></ul><ul><ul><li>A tripartite agreement reached between EAC, SADC, and COMESA during the 2008 summit to harmonize Master Plans. EAPP is a specialized institution of Comesa for Power isuues. </li></ul></ul><ul><ul><ul><li>EAPP encourages coordination and harmonization of national Master Plans with the EAPP Master Plan. E.g. Rwanda is already doing so. </li></ul></ul></ul>
  16. 16. <ul><li>The maximum benefit when coordination in the generation and interconnection expansion plans of the systems (RGP_RIP). </li></ul><ul><li>The net benefit for this case amount to 32,451 MUS$ (equivalent to 1,248 MUS$/year) </li></ul><ul><li>The lowest benefit is for the case where there is no coordination in the generation expansion plan. </li></ul>EASTERN AFRICAN MASTER PLAN Cont.. Benefit-Cost Analysis (Business Case?)
  17. 17. <ul><li>The second higher net benefit is for the case RGP_RIP_S2, in which the capital costs of all interconnection projects double in relation with the base case; for this case the net benefit amount 28,024 MUS$ (equivalent to 1,078 MUS$/year). </li></ul><ul><li>It is worth noting that the first level of regional coordination of interconnection projects potentially gives a sizable regional benefit (969 MUS$/year). </li></ul>EASTERN AFRICAN MASTER PLAN Benefit-Cost Analysis Cont..
  18. 20. <ul><li>It may be observed that in the second case ‘Efficient Market’, generation from expensive diesel is almost completely replaced by cheaper Hydro generated electricity. The savings over the plan period (25 years) on operational costs may be as much as up to $80bn. Again, this does not include investment cost savings. </li></ul>From the EC financed study by Mercados
  20. 22. Interconnection Projects 2013 – 2017 (NGP_RIP) EASTERN AFRICAN MASTER PLAN Cont.. Connecting Voltage (kV) Capacity (MW) Date Tanzania-Kenya 400 1520 2015 Ethiopia-Kenya DC 500 2000 2016 Ethiopia-Sudan 500 2 x 1600 2016 Egypt-Sudan DC 600 2000 2016 Rusumo HPP Transmission system 2015
  21. 23. List of Identified Regional Generation Projects – NGP_RIP Country Plant Name Type Inst. Cap (MW) Eastern DRC Ruzizi III Hydro 145 Ruzizi IV Hydro 287 Ethiopia Mandaya Hydro 2000 Gibe III Hydro 1870 Border Hydro 1200 Gibe IV Hydro 1468 Karadobi Hydro 1600 Rwanda KivuI Methane 100 Kivu II Methane 200 Tanzania Stieglers Gorge (I, II, III) Hydro 1200 Uganda Karuma Hydro 700 Ayago Hydro 550 Murchison Falls Hydro 750
  22. 24. EASTERN AFRICAN MASTER PLAN Cont.. <ul><li>Project Status </li></ul><ul><ul><li>Final Grid Code Report had been submitted and was discussed by the Steering Committee on 23 rd February, 2011 and was recommended to be submitted to the Conference of Ministers meeting in July, 2011 </li></ul></ul><ul><ul><li>Overseas training has been held in Canada and Britain </li></ul></ul><ul><ul><li>Draft Final Report Master Plan submitted in Feb 2011 and discussed by the Steering Committee on 22 nd Feb 2011 </li></ul></ul><ul><ul><li>Local training was held in Dar-es-Salaam March, 2011 </li></ul></ul><ul><ul><li>Final Report on Master Plan to be submitted at the end of March, 2011 </li></ul></ul><ul><ul><li>Additional work on the EAPP Inter-connector 1 to be completed May, 2011 </li></ul></ul>
  23. 25. EC Project 2.7m EUROS <ul><li>Objective is to strengthen the capability of the EAPP Permanent Secretariat </li></ul><ul><li>Project constitute the following components </li></ul><ul><ul><li>Preparation of the Eastern Africa Power Market Development </li></ul></ul><ul><ul><li>Preparation of a strategic plan and a 3 year business plan </li></ul></ul><ul><ul><li>Preparation of power market rules and agreements for cross-border trade </li></ul></ul><ul><ul><li>Horizontal Activities </li></ul></ul>
  24. 26. EC PROJECT: SUMMARY OF GENERATION SAVINGS <ul><li>Total savings in 25 years are in the order of 80 Billion USD. GDP/year for the countries without Egypt is in the order of 130000 MMUS$, Egypt GDP is in the order of 190000 MMUS$) </li></ul><ul><li>All the countries save operational costs by integration. </li></ul><ul><li>Integration provides market opportunity for all members. </li></ul><ul><li>Opportunity cost of the exchanged energy is around 40 billion USD over the study period . </li></ul>
  25. 27. COMPLETED COMPONENTS <ul><li>Deliverable 1: Review of Existing Studies , </li></ul><ul><li>Deliverable 2 : Power System Current Status, </li></ul><ul><li>Deliverable 3: Power System Regulatory and Financial Assessment, </li></ul><ul><li>Deliverable4: Electricity Demand Forecast- Deliverable 5: Infrastructure Investment Appraisals , </li></ul><ul><li>Deliverable 6: Regional Trade Forecast, </li></ul><ul><li>Deliverable 7: Strategic Road Map to 2025 and Action Plan, </li></ul><ul><li>Deliverable 11 : Design of Regional Power Trading Market, </li></ul>
  26. 28. . <ul><li>Deliverable 12 : Drafting of Commercial Agreements, </li></ul><ul><li>Deliverable 15: Draft MOU and Treaty- Draft Treaty to support Cross Border Trading in EAPP region, </li></ul><ul><li>Deliverable 16: Institutional Support to The Regional Regulatory Institution </li></ul><ul><li>Deliverable 17: Institutional Support to The Regional Market Operation Center(RMOC), </li></ul><ul><li>Deliverable 20: Assessment of the Training requirements of EAPP, sub-committees and other parties, </li></ul><ul><li>Deliverable 21: Training Programme for EAPP–PS, Sub Committees and other Parties </li></ul>
  27. 29. USAID 2.4mUSD : POWERING PROGRESS PROJECT <ul><li>Market development workshop held on 1-5 February 2009 </li></ul><ul><li>Renewable and Energy Efficiency Workshop held in March 2010 </li></ul><ul><li>Additional support to EAPP and EAC to prepare for Power Market and Power Trade. </li></ul><ul><li>To ensure at least 3 PPA are concluded </li></ul><ul><li>Draft Transmission Interconnection Standards being considered by the Technical Committees; </li></ul><ul><li>Gap Analysis to be done </li></ul>
  28. 30. USAID 2.4mUSD : POWERING PROGRESS PROJECT Cont.. <ul><li>Approval and implementation of Harmonized Transmission Standards as identified by the Grid Code </li></ul><ul><li>Study tours to PJM and WAPP being planned </li></ul><ul><li>Implementation of Regulatory Regime in line with MFA, AfDB and EC Projects. </li></ul><ul><li>Consultant is Nexant of USA. </li></ul>
  29. 31. UNDESA <ul><li>Workshop on “Agreements” done </li></ul><ul><li>Twinning with other power pools being planned </li></ul><ul><li>Study tours to Southern Africa Power Pool done. </li></ul><ul><li>Training (capacity building) on Financing Models for Power Projects being planned </li></ul><ul><li>Study tour to SIEPAC of Central America being planned </li></ul>
  30. 32. MFA NORWAY PROJECT: USD 2.2M <ul><li>Recruitment of staff for the CC and IRB completed </li></ul><ul><li>Installation and operationalization of the data base in progress </li></ul><ul><li>Installation and operationalization of the Communications Infrastructure delayed </li></ul><ul><li>Facilitation of Institutional set up of the CC and the IRB </li></ul><ul><li>Recruitment of Data Base Consultant in progress </li></ul><ul><li>Recruitment of Training Consultant completed </li></ul><ul><li>Recruitment of Management Consultant in progress </li></ul>
  31. 33. MFA Project Cont… <ul><li>Training of Secretariat Staff and utility representatives currently on-going in Denmark </li></ul><ul><li>Project to be completed by Dec 2011 </li></ul>
  32. 34. COORDINATING ACTIVITIES <ul><li>To ensure efficiency of the outputs and use of funds for the above projects </li></ul><ul><li>Benefits of Synergy </li></ul><ul><li>Harmonizing the project timeliness </li></ul><ul><li>Ensuring building on each other </li></ul><ul><li>Helping to identify gaps and overlaps </li></ul><ul><li>Helping identify risks </li></ul><ul><li>Helping identify future needs </li></ul><ul><li>Timely execution of the Roadmap (Strategic Plan) </li></ul>
  33. 35. WHATS NEXT FOR EAPP? <ul><li>The delay in the physical infrastructure development needs to be overcome. </li></ul><ul><li>(Two years slippage!) </li></ul><ul><li>Countries that have not joined are needed for their inputs and cooperation to have agreed position and approach </li></ul>
  34. 36. WHATS NEXT FOR EAPP? Cont.. <ul><li>Harmonization of transmission standards is required to expand trade </li></ul><ul><li>Cooperation from development partners, and participation of private and public utilities required to realize master plan. </li></ul><ul><li>P rogressing capacity Building until commencement of power market </li></ul><ul><li>Support for implementation of the master plan </li></ul><ul><li>Supporting EAPP until its self sustaining </li></ul>
  35. 37. WHATS REQUIRED? <ul><li>Filling the Gaps on ability to trade in Each Countries </li></ul><ul><ul><li>Interconnections </li></ul></ul><ul><li>Full Establishment of the Regional Market Operations Centre as </li></ul><ul><ul><li>Coordination Systems & Infrastructure setup </li></ul></ul><ul><li>Full Establishment of an Independent Regulatory board (IRB) </li></ul><ul><li>Staff Retention (after the current training by EC & MFA) </li></ul><ul><li>Full commitment by Regional Players </li></ul>
  36. 38.