Reconfiguration of Uganda's bulk network to accommodate a wholesale electricity market

Abstract

Countries that have restructured their electricity markets to wholesale markets have had significant benefits, including reduced generation costs, lower transmission losses and better consumer prices. In these markets, generators are dispatched in such a way that the financial benefits of both generator owners (producer surplus) and consumers (consumer surplus) are maximized. Retailers and large-scale consumers transact directly with power producers in a spot market or through contracts at wholesale level. Uganda's current single-buyer market (in which generation companies sell their power to a single entity that in turn transmits and sells it to distribution companies) was introduced in 2001 after the transition from a vertically integrated monopoly model. The market is expected to evolve into a wholesale market as the next restructuring step. This paper investigates the performance of the Uganda bulk network in a wholesale electricity market environment as modelled in Power World simulator. It considers different operation scenarios and possible infrastructure enhancements required for improved performance. Results showed that in the wholesale market model, transmission energy losses fell from an average of 4.3% to 3.8% compared to the single-buyer model due to more efficient network utilization. The economic analysis showed that off-peak and peak prices in the wholesale market system were 68.6% and 13.5% lower than in the current market respectively. However, old high loss transmission lines contributed to higher energy prices at receiving nodes. Transmission congestion, whose cost is embedded in a Location Marginal Price, caused sharp increases in the market's prices; this was addressed by using the network reconfiguration technique.