- The National Renewable Energy Laboratory (NREL), has published a new research paper, ”Evolving Competitive Markets in SAPP: Leveraging Competitive Wholesale Electricity Markets to Drive Renewable Generation Capacity in the Southern African Power Pool (SAPP)”.
The SADC region has significant natural resource potential to increase renewable energy generation, improve electricity reliability, and support economic development. The paper offers practical solutions and strategic options aimed at fostering a more competitive and interconnected energy market across Southern Africa.
This research finds an apparent lack of confidence from electricity infrastructure investors in SAPP wholesale electricity markets, which increases risk perception and lowers the likelihood of capital deployment. With respect to free market fundamentals, competitive market obstacles and renewable energy development obstacles are characterised.
Stakeholders identified the top obstacles to well-functioning competitive markets as insufficient transmission infrastructure for interconnection and regional movement of electricity, dominance of national single-buyer markets, and lack of or weak nation-state regulatory frameworks. Stakeholders prioritised the top three obstacles for renewable energy development as a lack of viable commercial arrangements for variable renewable energy (VRE) balancing, lack of functional and consistent nation-level regulations, and higher project costs related to reliance on imported equipment.
Link to the full paper HERE: EVOLVING COMPETITIVE MARKETS IN SAPP NREL
Author: Bryan Groenendaal
