- Kariba hydroelectric project, in Kariba Gorge of the Zambezi River, on the Zambia-Zimbabwe border, South Central Africa was built in 1955–59. It is one of the world's largest dams, and is 420 ft (128 m) high and 1, 900 ft (579 m) long. The Kariba project's generators supply electricity to the Copperbelt in Zambia and to parts of Zimbabwe. Kariba Lake, the vast reservoir created by the dam, extends approximately 175 miles (280 km) and has a maximum width of 20 miles (32 km).
- See generally, Tore Horvei, ‘Powering the Region: South Africa in the Southern African Power Pool’, in South Africa in Southern Africa. Reconfiguring the Region (David Simon, ed, 1998), pp 146–147. It should also be noted that the electricity industry had hitherto been considered a national security concern that had to be under an overarching national policy umbrella. Moreover, it had been constrained by national borders with regard to where power is generated and to whom it is supplied. This situation has now changed, and increased emphasis is being laid on international exchange in the electricity industry. See, generally Francis N Botchway, The Role of the State in the Context of Good Governance and Electricity Management: Comparative Antecedents and Current Trends (2000) 21 U Pa J Int'l Econ L 826.
- The SADCC was created in 1 April 1980 during a meeting in Lusaka, following the adoption of the Lusaka Declaration with the objectives of achieving development and economic growth, alleviating poverty, enhancing the standard and quality of life of the peoples of Southern Africa and supporting the socially disadvantaged through regional integration. See also Introductory Note by Rosalind H Thomas, in (1993) 32 ILM 116.
- See SADC-SAPP Annual Review Report, 28 August 1995-March 1997.
- See Preamble IGMOU.
- The SADC replaced the SADCC following a meeting of the Council of Ministers of the SADCC (in January 1992) held in Maputo, which endorsed a plan to transform the Conference into an economic community with common policies in areas such as trade and exchange rates, and with a majority-ruled South Africa as a full member. The member states are Angola, Botswana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe. For the text of the Treaty, see (1993) 32 ILM 116 (hereinafter SADC Treaty); for a brief discussion, see James D Sidaway and Richard Gibbs, ‘SADC, COMESA, SACU: Contradictory Formats for Regional ‘Integration’ in Southern Africa?’ in South Africa in Southern Africa. Reconfiguring the Region (David Simon, ed, 1998), pp 164–170.
- SADC Treaty, Art 5 (g).
- Since a variety of legal instruments govern the pool, the legal framework also had to deal with the validity, precedence and hierarchy of documents. Thus the IUMOU specifies that in case of inconsistency, the first document shall have precedence over the second document; the second document over the third document and the third document over the fourth document. The documents are: (1) the IGMOU; (2) the IUMOU; (3) the Agreement Between Operating Members; and (4) the Operating Guidelines. Due to its predominantly technical nature, this article will not discuss the Operating Guidelines.
- The SADC Intergovernmental Memorandum of Understanding in Respect of the Formation of the Southern African Power Pool (April 1995). The original of this Memorandum of Understanding was deposited with the Technical and Administrative Unit of the SADC, which acts as depository. The depository transmits certified copies to all parties and notifies all parties of further signatories of this Memorandum of Understanding. Any notification or communication in terms of, or in regard to, the Memorandum of Understanding is to be made through the depository. This Memorandum of Understanding was thus open to signature by all Member States as well as Zaire, being a non-Member State. It was to enter into force on signature by at least six Member States. The inclusion of other non-Member States in the SAPP was subject to the approval of the parties and the terms for such inclusion were to be set out in separate agreements. The IGMOU was signed by the governments of Republic of Angola, Republic of Botswana, Kingdom of Lesotho, Republic of Malawi, Republic of Mozambique, Republic of Namibia, Republic of South Africa, Kingdom of Swaziland, United Republic of Tanzania, Republic of Zambia, Republic of Zimbabwe, and Republic of Zaire.
- See IGMOU, Art 1.
- See IGMOU, Preamble and Art 1.
- See also, generally, Joseph P Tomain, Energy Law (West Publishing, 1981), p 221.
- IGMOU, Art 4.
- SADC members and their respective utilities are the Empresa Nacional de Electricidade in Angola, the Botswana Power Corporation in Botswana, the Lesotho Electricity Commission in Lesotho, the Electricity Supply Commission in Malawi, the Central Electricity Board in Mauritius, the Electricidade de Moçambique in Mozambique, the Namibia Power in Namibia, the Electricity Supply Commission in South Africa, the Swaziland Electricity Board in Swaziland, the Tanzania Electricity Supply Company in Tanzania, the Zambia Electricity Supply Corporation in Zambia, and the Zimbabwe Electricity Supply Authority in Zimbabwe. The Democratic Republic of Congo and its utility, Société Nationale d'Electricité, though not part of the SADC, have joined the SAPP. The Agreement Between Operating Members has been signed by the Botswana Power Corporation, Electricidade de Moçambique, Electricity Supply Company of South Africa, Société Nationale d'Electricité du Zaire, and Zimbabwe Electricity Supply Company.
- See Donald T O'Leary, Jean-Pierre Charpentier, and Diane Minogue, Promoting Regional Power Trade—The South African Power Pool, Private Sector Note No 145, World Bank, June 1998.
- Along the lines of Norpool (Scandinavia), UCPTE (Western Europe), and certain North American pools such as the Mid-Continent Area Power Pool; see also O'Leary et al, above n 15.
- These pools do not employ central dispatch and tend to be characterised by long-term bilateral contracts for the supply of electricity between particular generators and customers, supplemented by offsetting short-term contracts and other deals under the overall agreement framework. Loose pools provide central services such as data gathering and provision, including continuous real-time data to match generation and demand, producing indicative expansion plans, and implementing emergency procedures. They also establish detailed common design and operational standards to ensure system security, reliability, and to facilitate trades. Loose pools are adaptable to more competitive arrangements as the domestic electricity industry structure and cooperative pool operations evolve in the region.
- The Southern African Power Pool Inter-Utility Memorandum of Understanding SADC Power Utilities and Non-SADC Utilities (16 May 1995).
- Art 1.
- Recitals (a) and (b) of IGMOU.
- Art 4.
- See discussions in the next sections.
- For details, see IUMOU, Art 10; see also generally, Tore Horvei, above n 2, at 157.
- Service schedules govern various types of transactions among operating members to reduce costs or improve reliability of supply.
- See for detail, Art 11; see also, generally, Tore Horvei, above n 2, at 157.
- Within the Management Committee, the Planning Subcommittee is responsible for establishing and updating common planning and reliability standards which have an impact on the SAPP. This is based on individual members’ plans. In addition, the Planning Subcommittee develops every two years, an overall Pool Plan to highlight the benefits and opportunities for cost savings that can be derived by the members from the coordination of activities. The Pool Plans take into account the forecasted demand and energy consumption in each member's system, including demand side management, indicate the anticipated sales and purchases by each member, including those with electricity supply enterprises or independent power producers who are non-members of the SAPP, contain the characteristics, location and commissioning dates of the new generating units and new transmission facilities of 10k V and above which are planned in each member's system, contain the characteristics, location and commissioning dates of the new telecommunication, telecontrol and supervisory facilities which are planned in each member's system, identify and record new generation, transmission, telecommunication or telecontrol facilities to be installed in the systems of members and non-members, and evaluate software and other tools which will enhance the value of planning activities such as load forecasting, the determination of planning or reliability standards, cost benefit analysis or system studies.
- The Management Committee is also assisted by the Operating Subcommittee and the Environmental Subcommittee. The Operating Subcommittee is responsible for the overall operational aspects of the SAPP, and the Environmental Subcommittee is vested with the responsibility to keep abreast of world and regional matters relating to air quality, water quality, land use and other environmental issues, and where governments have established related environmental organisations, to liaise with them to assist one another on specific issues.
- ABOM, Art 3.
- See, generally, art 10 for detail.
- Force majeure is defined as any overwhelming occurrence of nature which could not reasonably have been foreseen or guarded against; any of the following occurrences initiated by human agency: war, blockade, foreign hostile acts, civil war, rebellion, revolution, insurrection or sabotage; strikes or other similar stoppages of work by employees which are not caused by unreasonable actions on the part of a member, any other cause beyond the control of a member.
- Emergency energy is the energy supplied from an operating member to another operating member who experiences a loss of generation or transmission facilities as the result of an unscheduled outage or any cause not reasonably foreseeable.
- The accredited capacity of an operating member means its nett generating capacity plus participation power purchases minus participation power sales.
- Wheeling means transmitting a contractual amount of power over specified time periods through the system of an operating member who is neither the seller nor the buyer of the power.
- The emergency energy is charged at a rate which is the greater of 150 per cent of the total costs of owning and operating a new coal-fired station or 115 per cent of the seller's short-run marginal cost of generation. In January 1994 money value, the rate is at least equal to US$31,92/MWh; this rate is to be reviewed annually by the Planning Subcommittee. If, in a year, the Planning Subcommittee fails to review the dollar rate and if the parties do not agree otherwise, the dollar rate for emergency energy in financial year ‘n+1 shall be equal to the rate in financial year ‘n’ multiplied by the ratio between the Production Price Index as issued by the Department of Commerce of the Federal Government of the United States for October of Year ‘n’ divided by that of October of Year ‘n-1’. The supplier of emergency energy may, at its own discretion, require the purchaser to return such energy at such times and under such conditions that the supplying member will not experience a loss due to the transaction.
- The hourly energy flows in this context will be equal to: (1) the sum of all the actual energy flows in a clock hour through the points of interconnection linking Member A to all other members, where exports are positive and imports are negative; (2) minus the sum of all the scheduled energy flows in the same clock hour through the points of interconnection linking Member A to all other members, where exports are positive and imports are negative (a negative value means that Member A shall return energy to other members). In this situation, the amount of capacity regulated by Member B on behalf of Member A in an hour will be equal to the sum of: (1) the largest difference in that clock hour between the (actual) instantaneous power exports and the scheduled power flows at the same moment, and (2) the largest difference in the same clock hour between the (actual) instantaneous power imports and the scheduled power flows at the same moment.
- With regard to rates for system energy, the agreement is precise. If the selling member increases generation at thermal units or if it is importing system energy and reselling it, the rate will be a function of the seller's short-run marginal cost of generation (SRMC) and of the notice to be given before or after interruption. The rates normally would not exceed: 120 per cent of the seller's SRMC if the notice is one hour, 125 per cent of the seller's SRMC if the notice is eight hours, 130 per cent of the seller's SRMC if the notice is 16 hours, and 135 per cent of the seller's SRMC if the notice is 24 hours.
- If the selling member increases generation at hydro units and the buyer reduces its generation at thermal units, the rate will be a function of the buyer's SRMC and of the notice to be given before an interruption. The rates will not exceed 85 per cent of the buyer's SRMC if the notice is one hour, 88 per cent of the buyer's SRMC if the notice is eight hours, 92 per cent of the buyer's SRMC if the notice is 16 hours, 95 per cent of the buyer's SRMC if the notice is 24 hours. If the selling member increases generation at hydro units and if the buyer also reduces generation at hydro units, the selling price of system energy will be determined by mutual consent.
- Regarding the rates for economy energy, the overall savings per MWh are equal to the difference between the SRMC of the seller and the buyer. The billing rate is equal to one-half of the overall savings per MWh added to the SRMC of the seller. If the purchasing member reduces its own hydro generation and the selling member increases its own thermal generation or imports economy energy for resale, the charge will not exceed 115 per cent of the seller's SRMC. Regarding rates for surplus energy, when the selling member increases its generation at hydro units and the buyer reduces its generation at thermal units, the rate shall not exceed 75 per cent of the buyer's SRMC When the selling member increases generation at hydro units and the buyer also reduces generation at hydro units, the selling price of surplus energy is determined by mutual consent.
- Spillage is that energy lost when the hydro system must spill water from its reservoirs during the period that energy is stored in the hydro system.
- Contracted capacity and associated energy intended to be available at all scheduled times for the duration of the transaction. Such power includes the required reserve capacity.
- If, in a year, the Planning Subcommittee fails to review the rate and if the parties do not otherwise agree, the rate in financial year ‘n+1’ shall be equal to the rate in financial year ‘n’ multiplied by the ratio between the Production Price Index in the United States in October of year ‘n’ divided by that in October of year ‘n-1’.
- Regarding system participation power, the rate for capacity is equal to US$0,190/kW/day in January 1994 money values. This rate is reviewed annually by the Planning Subcommittee. If the sale is from a system which is predominantly thermal, the energy rate does not exceed 115 per cent of the seller's SRMC. If system participation power is obtained from a hydro unit, the energy rate does not exceed 80 per cent of the buyer's SRMC. Wheeling charges, if any, shall be to the account of the buyer.
- If, in a year, the Planning Subcommittee fails to review the rate and if the parties do not otherwise agree, the rate in financial year ‘n+1’ shall be equal to the rate in financial year ‘n’ multiplied by the ratio between the Production Price Index in the United States in October of year ‘n’ divided by that in October of year ‘n-1’.
- The operating member's monthly system peak obligation plus its reserve capacity obligation based on its annual system peak obligation.
- Charges for insufficient accredited capacity become effective from the commencement date of the SAPP Agreement. An operating member's accredited capacity obligation in any month should be no less than its monthly system peak obligation forecasted by the member, plus its reserve capacity obligation based on the annual system peak obligation. The reserve capacity obligation of a member for any month, will be equal to 19 per cent of the annual system peak obligation of such member when the generating plant is thermal and ten per cent when the generating plant is hydro. A weighted average will apply to members who have a mixed system.
- Regarding obligation enforcement, before the facts, the accredited capacity obligation calculations will be carried out for each of the 12 months starting with the month April of a year and ending with March of the following year. Input data is provided by the member to the Operating Subcommittee. The results will then be circulated among the operating members for information. After the facts, at the end of the system peak month, the actual accredited capacity obligation will be calculated by the Operating Committee based on the actual transactions and the actual monthly system peak demands. If the calculation indicates a deficit, the member is then subject to the penalty. The payment by deficient members will be split among operating members having a surplus of accredited capacity in proportion to each operating member's contribution to the total excess accredited capacity in the pool, adjusted if necessary for transmission restrictions to the deficient member. The penalty will be based on a method specified in the service schedule, ‘participation power’ and shall be equal to five times the participation power rate. In January 1994 money value, it will be US$36, 15/kW.
- Specified in Art 6.5 and Appendix 1.
- The amount of additional losses is determined in accordance with Service Schedule 1 of the ABOM.
- Art 4.
- Companies Act of Zimbabwe, Chapter 24:03.
- See generally art 5 of the Constitution.
- Art 7.5.
- Allocation between the members of the costs budgeted by the CC are as follows: (1) 30 per cent is shared equally between all the operating members; (2) 30 per cent is allocated between the operating members in proportion to actual energy measured in MWh and import from other members or other parties during the financial year; (3) 20 per cent is allocated between all SAPP members in proportion to their annual system peak demand in the financial year; (4) ten per cent is allocated between operating members in proportion to the combined 75 per cent thermal rating of their interconnections with other members; (5) ten per cent is deemed to constitute a benefit payable only by the host member.
Journal of Energy & Natural Resources Law
Volume 20, 2002 - Issue 4