Simulating Zonal Pricing in East African Electricity Markets

Geoffrey Aori Mabea

doi:doi:10.11648/j.ijeee.20220701.12

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Simulating Zonal Pricing in East African Electricity Markets

Geoffrey Aori Mabea

Published in International Journal of Economy, Energy and Environment (Volume 7, Issue 1)

Received: 23 December 2021 Accepted: 12 January 2022 Published: 20 January 2022

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Abstract

The East African electricity markets are due to fully couple and embrace short term trading. Traditionally, excess generation in any country has to be bilaterally traded or delayed signing Power Purchase Agreements to avoid capacity charges. However, in recent years, with increased pressure to increase energy access in the region, the Eastern Africa Power Pool (EAPP) has been established to introduce robust bilateral and short-term markets. Price signals are critical to determining investment levels in a competitive electricity market. Therefore, this research aims to investigate the feasibility of bidding zones using clustering methodology in selected East African Countries. This paper simulates a zonal wholesale market with optimal power flow and k-means clustering theory to identify optimal bidding zones strategies and determine Nash-equilibrium prices. The results indicate that when the markets engage in the wholesale markets with planned transmission investment, the configuration of three optimal zones induces the highest welfare level. Therefore, this research informs the Eastern Africa and the African Union energy policy debate on the African Single Electricity Market and the Eastern Africa Power Pool electricity market dilemma.

Published in	International Journal of Economy, Energy and Environment (Volume 7, Issue 1)
DOI	10.11648/j.ijeee.20220701.12
Page(s)	13-23
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2022. Published by Science Publishing Group

Keywords

Electricity Markets Integration, Clustering Theory, Zonal Pricing, Congestion, Optimal Power Flow, Simulation

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APA Style

Geoffrey Aori Mabea. (2022). Simulating Zonal Pricing in East African Electricity Markets. International Journal of Economy, Energy and Environment, 7(1), 13-23. https://doi.org/10.11648/j.ijeee.20220701.12

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ACS Style

Geoffrey Aori Mabea. Simulating Zonal Pricing in East African Electricity Markets. Int. J. Econ. Energy Environ. 2022, 7(1), 13-23. doi: 10.11648/j.ijeee.20220701.12

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AMA Style

Geoffrey Aori Mabea. Simulating Zonal Pricing in East African Electricity Markets. Int J Econ Energy Environ. 2022;7(1):13-23. doi: 10.11648/j.ijeee.20220701.12

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@article{10.11648/j.ijeee.20220701.12,
  author = {Geoffrey Aori Mabea},
  title = {Simulating Zonal Pricing in East African Electricity Markets},
  journal = {International Journal of Economy, Energy and Environment},
  volume = {7},
  number = {1},
  pages = {13-23},
  doi = {10.11648/j.ijeee.20220701.12},
  url = {https://doi.org/10.11648/j.ijeee.20220701.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijeee.20220701.12},
  abstract = {The East African electricity markets are due to fully couple and embrace short term trading. Traditionally, excess generation in any country has to be bilaterally traded or delayed signing Power Purchase Agreements to avoid capacity charges. However, in recent years, with increased pressure to increase energy access in the region, the Eastern Africa Power Pool (EAPP) has been established to introduce robust bilateral and short-term markets. Price signals are critical to determining investment levels in a competitive electricity market. Therefore, this research aims to investigate the feasibility of bidding zones using clustering methodology in selected East African Countries. This paper simulates a zonal wholesale market with optimal power flow and k-means clustering theory to identify optimal bidding zones strategies and determine Nash-equilibrium prices. The results indicate that when the markets engage in the wholesale markets with planned transmission investment, the configuration of three optimal zones induces the highest welfare level. Therefore, this research informs the Eastern Africa and the African Union energy policy debate on the African Single Electricity Market and the Eastern Africa Power Pool electricity market dilemma.},
 year = {2022}
}

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TY  - JOUR
T1  - Simulating Zonal Pricing in East African Electricity Markets
AU  - Geoffrey Aori Mabea
Y1  - 2022/01/20
PY  - 2022
N1  - https://doi.org/10.11648/j.ijeee.20220701.12
DO  - 10.11648/j.ijeee.20220701.12
T2  - International Journal of Economy, Energy and Environment
JF  - International Journal of Economy, Energy and Environment
JO  - International Journal of Economy, Energy and Environment
SP  - 13
EP  - 23
PB  - Science Publishing Group
SN  - 2575-5021
UR  - https://doi.org/10.11648/j.ijeee.20220701.12
AB  - The East African electricity markets are due to fully couple and embrace short term trading. Traditionally, excess generation in any country has to be bilaterally traded or delayed signing Power Purchase Agreements to avoid capacity charges. However, in recent years, with increased pressure to increase energy access in the region, the Eastern Africa Power Pool (EAPP) has been established to introduce robust bilateral and short-term markets. Price signals are critical to determining investment levels in a competitive electricity market. Therefore, this research aims to investigate the feasibility of bidding zones using clustering methodology in selected East African Countries. This paper simulates a zonal wholesale market with optimal power flow and k-means clustering theory to identify optimal bidding zones strategies and determine Nash-equilibrium prices. The results indicate that when the markets engage in the wholesale markets with planned transmission investment, the configuration of three optimal zones induces the highest welfare level. Therefore, this research informs the Eastern Africa and the African Union energy policy debate on the African Single Electricity Market and the Eastern Africa Power Pool electricity market dilemma.
VL  - 7
IS  - 1
ER  -

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Author Information

Geoffrey Aori Mabea

Energy Regulators Association of East Africa, Energy Regulation Centre of Excellence, Arusha, Tanzania

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APA Style

Geoffrey Aori Mabea. (2022). Simulating Zonal Pricing in East African Electricity Markets. International Journal of Economy, Energy and Environment, 7(1), 13-23. https://doi.org/10.11648/j.ijeee.20220701.12

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ACS Style

Geoffrey Aori Mabea. Simulating Zonal Pricing in East African Electricity Markets. Int. J. Econ. Energy Environ. 2022, 7(1), 13-23. doi: 10.11648/j.ijeee.20220701.12

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AMA Style

Geoffrey Aori Mabea. Simulating Zonal Pricing in East African Electricity Markets. Int J Econ Energy Environ. 2022;7(1):13-23. doi: 10.11648/j.ijeee.20220701.12

Copy | Download

@article{10.11648/j.ijeee.20220701.12,
  author = {Geoffrey Aori Mabea},
  title = {Simulating Zonal Pricing in East African Electricity Markets},
  journal = {International Journal of Economy, Energy and Environment},
  volume = {7},
  number = {1},
  pages = {13-23},
  doi = {10.11648/j.ijeee.20220701.12},
  url = {https://doi.org/10.11648/j.ijeee.20220701.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijeee.20220701.12},
  abstract = {The East African electricity markets are due to fully couple and embrace short term trading. Traditionally, excess generation in any country has to be bilaterally traded or delayed signing Power Purchase Agreements to avoid capacity charges. However, in recent years, with increased pressure to increase energy access in the region, the Eastern Africa Power Pool (EAPP) has been established to introduce robust bilateral and short-term markets. Price signals are critical to determining investment levels in a competitive electricity market. Therefore, this research aims to investigate the feasibility of bidding zones using clustering methodology in selected East African Countries. This paper simulates a zonal wholesale market with optimal power flow and k-means clustering theory to identify optimal bidding zones strategies and determine Nash-equilibrium prices. The results indicate that when the markets engage in the wholesale markets with planned transmission investment, the configuration of three optimal zones induces the highest welfare level. Therefore, this research informs the Eastern Africa and the African Union energy policy debate on the African Single Electricity Market and the Eastern Africa Power Pool electricity market dilemma.},
 year = {2022}
}

Copy | Download

TY  - JOUR
T1  - Simulating Zonal Pricing in East African Electricity Markets
AU  - Geoffrey Aori Mabea
Y1  - 2022/01/20
PY  - 2022
N1  - https://doi.org/10.11648/j.ijeee.20220701.12
DO  - 10.11648/j.ijeee.20220701.12
T2  - International Journal of Economy, Energy and Environment
JF  - International Journal of Economy, Energy and Environment
JO  - International Journal of Economy, Energy and Environment
SP  - 13
EP  - 23
PB  - Science Publishing Group
SN  - 2575-5021
UR  - https://doi.org/10.11648/j.ijeee.20220701.12
AB  - The East African electricity markets are due to fully couple and embrace short term trading. Traditionally, excess generation in any country has to be bilaterally traded or delayed signing Power Purchase Agreements to avoid capacity charges. However, in recent years, with increased pressure to increase energy access in the region, the Eastern Africa Power Pool (EAPP) has been established to introduce robust bilateral and short-term markets. Price signals are critical to determining investment levels in a competitive electricity market. Therefore, this research aims to investigate the feasibility of bidding zones using clustering methodology in selected East African Countries. This paper simulates a zonal wholesale market with optimal power flow and k-means clustering theory to identify optimal bidding zones strategies and determine Nash-equilibrium prices. The results indicate that when the markets engage in the wholesale markets with planned transmission investment, the configuration of three optimal zones induces the highest welfare level. Therefore, this research informs the Eastern Africa and the African Union energy policy debate on the African Single Electricity Market and the Eastern Africa Power Pool electricity market dilemma.
VL  - 7
IS  - 1
ER  -

Copy | Download