Electricity Trade and Capacity Expansion Options in West Africa “Electricity Trade and Capacity Expansion Options in West Africa” A USAID funded collaborative project with the Economic Community of West African States, ECOWAS The West African Power Pool & Optimal Long-Term Planning Of International Transmission With A Free-Trade Electricity Policy Interim Report, 2001 F. T. Sparrow Brian H. Bowen PURDUE UNIVERSITY ECOWAS Power Pool Conference Dakar, Senegal March 20-22, 2001 Electricity Trade and Capacity Expansion Options in West Africa 1 Electricity Trade and Capacity Expansion Options in West Africa SUMMARY Interim Report, 2001 There are major gains to be made, in West Africa, from a regionally integrated free trade electricity policy (base case scenario) compared with limited or no energy trade among the ECOWAS states (scenario 2). In the free trade scenario the total cost of new lines and expansions on existing transmission lines amounts to only 4.7% of the total capital expenditure (or 1.6% of total regional cost). This $275 million ($100 million to existing lines expansion and $175 million to new lines expansions) for lines capital expenditure provides a very attractive investment basis for making substantial regional savings to the order of $4.5 billion ($21 billion – $16.5 billion) across the region for the 20-year long-term horizon. In the ECOWAS Zone A over 2000MW of new load carrying capability is added to the two lines, Benin to Togo, and Togo to Ghana. The largest expansion in ECOWAS Zone B is from Cote D’Ivoire to Guinea with a total long-term expansion of 442MW. The second largest expansion in Zone B is between Guinea and Senegal, with 365MW. The total regional lines expansion, with free trade, is 474% (3840MW total compared with 810MW) greater than with national autonomy across the region for the 20 year planning horizon. For the 20-year horizon Nigeria is a net exporter of 152TWh in order to achieve minimum regional costs for the 20-year horizon. Benin and Togo become major wheelers of electricity to Ghana and the rest of the region. Guinea becomes an important center of regional electricity trade for the ECOWAS Zone B. With an effective free trade scenario there are nearly 9000MW of load carrying capability added to the region’s transmission grid. This is nearly a 900% increase over the 2001existing international transmission capability of 1003MW. If full autonomy is applied across the region for each country, then there is a 27% increase in total regional cost rising to $21 billion (from $16.5 billion), for the 2001 to 2020 period. Theoperationalcosts,inthebasecasescenario,are64%ofthetotalcostsandinthe no energy trade scenario consist of 74% of total costs. In both the base case and scenario 2 there is over 28,000MW of new generating capacity added to the ECOWAS region for the period 2001 to 2020. Electricity Trade and Capacity Expansion Options in West Africa 2 1. Background to the February 2001 ECOWAS Electricity Policy Model The main purpose of this report is to highlight the trends, indicated by the ECOWAS regional electricity policy analysis, in optimal (minimum cost) regional international transmission line load carrying expansions. The West Africa electricity power pool model incorporates five existing lines in 2001 (numbered 1 to 5 in Table 1) and twelve proposed new interconnections (numbered 6 to 17). Free trade line expansions, optimized for 2020, are also listed in Table 1. Table 1. WAPP International Transmission Lines Line Load Line Route Fixed Variable Line Line Name Type* Carrying Voltage Length Capital Expansion capacity Capability (kV) (km) Cost Cost in 2020 (MW) ($106) ($106/MW) (MW)** (1) Ben-Tog OT 150 161 183 0.100 150+2391 (2) BFa-ICo OT 200 225 150 0.101 200+0 (3) Gha-Tog OT 256 161 129 0.102 256+2055 (4) Gha-ICO OT 327 225 220 0.101 327+616 (5) Ngr-Nga OT 70 132 264 0.103 70+72 (6) Ben-Nga NT 560 330 16 20.0 0.100 2767 (7) Gam-Sen NT 20 225 110 27.83 0.273 31 (8) Gui-Sen NT 150 19.27 0.112 365 (9) Gui-ICo NT 150 225 450 65.22 0.102 442 (10) Gui-SLe NT 80 110 93 13.48 0.103 53 (11) Gui-GBi NT 150 225 123 17.82 0.104 15 (12) Gui-Mal NT 90 225 368 53.33 0.105 35 (13) Lib-Gui NT 80 13.48 0.106 20 (14) Lib-SLe NT 80 13.48 0.107 3 (15) Mal-Sen NT 150 225 821 111.34 0.108 3 (16) Mal-ICo NT 100 225 616 88.18 0.109 106 (17) BFa-Gha NT 30 225 1160 7.5 0.400 0 Note: * OT = Old/existing international transmission line * NT = New/proposed international transmission line ** Line capacity in 2020 assuming there has been optimal expansion with free trade policies The organization of some of the line parameters model coding is illustrated in Appendix I. All of the regions existing and proposed new power stations are listed in Appendix II. The full set of lines and generation data is documented in the ECOWAS Data Set #4 (February 2001). Electricity Trade and Capacity Expansion Options in West Africa 3 Figure 1. ECOWAS – Country Populations and GNP per Capita Electricity Trade and Capacity Expansion Options in West Africa 4 Figure 2. ECOWAS – Country MW Capacities & Power Pool ZonesA&B Electricity Trade and Capacity Expansion Options in West Africa 5 This data set can be downloaded from the Purdue Power Pool Development Group (PPDG) webpage at: http://IIES.www.ecn.purdue.edu/IIES/PPDG/ Full details of the regional model formulation can be obtained from the Long-Term Model User Manual, Edition 7 (February 2001), and this also can be downloaded from the PPDG webpage. A summary of the regional population’s distribution and incomes is illustrated in Figure 1. In 2000 the ECOWAS Project Implementation Committee (PIC) recommended the regional establishment of two sub- pools to facilitate the creation of a West African Power Pool (WAPP). These two sub-pools are named Zone A and Zone B. The countries in each of these two pools, and the balance between the existing thermal and hydropower generation capacities, are shown in Figure 2. The February 2001 ECOWAS regional electricity model is based on the ECOWAS Data Set #4 (February 2001). The results from this model must be considered as demonstration results only. The February 2001 model results should be very guardedly considered because:- • Important data questions and omissions need to be addressed with the data for Nigeria and Cote d’Ivoire. • Capital and operational cost data, and outage rates need attention. • High electricity demand growth rates are “hoped for” rates rather than expected rates. • A data set has yet to be supplied for Liberia. Data Set #4 is however a big improvement upon the Data Set #3 (August 2000) as a result of the training in data collection in 2000. 2. Optimal ECOWAS Transmission Expansions The transmission expansions are considered for two West Africa scenarios: • Scenario #1, Base Case Scenario – Free Trade is permitted with 50% autonomy factors for electricity energy and for trading in power reserves. • Scenario #2, No Electricity Energy Trade is permitted. The autonomy factors are set at 100%. Electricity Trade and Capacity Expansion Options in West Africa 6 The November 2000 ECOWAS Technical Working Group (WAPP), at the Ghana data training workshop, specified that three trade scenarios should be considered. The third scenario, with autonomies set at 0%, is only slightly different in its results to the base scenario and so this third scenario in not reported here. The total cost (capital and operational costs) in the base scenario is $16.5 billion. If full autonomy is applied across the region for each country, then there is a 27% increase in total regional cost rising to $21 billion (from $16.5 billion), for the 2001 to 2020 period. With an effective free trade scenario there are nearly 9000MW of load carrying capability added to the region’s transmission grid (Table 2). This is nearly a 900% increase over the 2001 existing international transmission capability of 1003MW. Table 2. Total International Transmission Expansions Total Cost Total Existing Total New Total ($ billion) Transmission Transmission Transmission Expansion Expansion Expansion (MW) (MW) (MW) (a) AFs = 50% 16.522 5,134 3,840 8,974 (b) AFs = 100% 21.027 770 810 1,580 (a)/(b) 78% 666% 474% 567% If trade is kept to a minimum, as in scenario #2, then only 1580MW of total line capacity is added. Scenario #1 has a 666% increase in existing line capacity expansions compared with Scenario #2. Totally new line expansions increase by 474% with the free trade scenario. Limited expansions exist with the no energy trade scenario in order to meet the necessary expansions to provide trade in power reserves to give system reliability. Tables 3 and 4 illustrate the rate of expansion to the existing transmission lines in Zone A of the proposed West Africa Power Pool (WAPP). In Zone A over 2000MW of new load carrying capability is added to the two lines, Benin to Togo (Ben-Tog), and Togo to Ghana (Gha-Tog). While three to four hundred MW are added to each line in the short-term (years 2003/4), most of this new expansion takes place between 2013 to 2020. With no electricity energy trade the line between Nigeria and Niger is not expanded at all in Scenario #2. Tables 5 and 6 show the rate of expansions on the proposed new lines of the ECOWAS region.