The Future of SAPP, WAPP,

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The Future of SAPP, WAPP, CAPP, and EAPP With
Inga
IEEE GM 2005 San Francisco June 15, 2005 PURDUE
UNIVERSITY F. T. Sparrow Brian H. Bowen Zuwei Yu
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Establishment of Africas Power Pools
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Sub-Sahara Regional MW Totals
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Southern African Power Pool
SAPP well along in their Operation (1995)
SAPP Major new lines for increased trading
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West African Power Pool
WAPP Major new lines for increased trading
WAPP moving into Operational phase (2000)
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Central African Power Pool
EAPP now in the process of identifying needed HV
lines (2005)
DRC-Inga with future exports to SAPP, WAPP,
EAPP, Egypt
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East African Power Pool
EAPP Just getting organized expecting a launch
late 2005
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Proposed Future Africa Grid

• International transmission
• links within power pools
• International transmission
• links between pools
• During next 10 years
• development of lines
• CAPP to SAPP WAPP
• CAPP to Egypt EAPP
• CAPP becomes central link
• with vital role for Inga site

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North American Trading Between Interconnects

• System designed for reliability, not economy
  trades
• Result very little load carrying capability
• between regions

Pacific DC HV Inter-Tie 3,100MW, 800miles
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Total Gross Transactions Between 4 NERC Regions
Trade represents 8.8 of total U.S. peak demand
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The Feasibility of Grand Inga

• The underlying question is there enough
• demand in Africa to justify the enormous
• up-front dam construction cost?
• The average historic demand growth has
• averaged about 2 per year over the last
• ten years
• Is there enough suppressed demand to
• justify the much higher growth rates
• projected by member nations?

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Forecast Growth in Electricity Demand
1993-2002 Average Historical Growth
for- Egypt 2.6 Nigeria 2.4 S.
Africa 1.4 Forecasting 5 What are low
and high scenarios?
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Assumptions for Inga Feasibility Analysis

• All demand growth in likely export markets for
• Inga (SAPP, WAPP, EAPP, Egypt) will be met by
• Inga power, not local construction
• Growth rates in the range of 2 to 4 per year
• Electricity will be sold at 3.5 cents/kWh
  (otherwise
• markets will generate their own electricity)
• Inga construction and transmission line costs are
• 16 Billion
• The cost of capital is 10

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Demand Values Export Revenues
58,556MW Egypt capacity 18,000MW 76,556MW
total
Assume base year demand with 80 capacity factor
(76,556 x 0.8 x 8,760) MWh Year 1 revenues
resulting from increase in demand growth of 2,
electricity price of 30/MWh (76,556 x 0.8 x
8,760 x 0.02 x 30.0) 322M
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Inga Question Answer
Q When will the annual net revenues from export
sales cover the annual capitalized cost of the
Inga project? A1 Never if the growth rate is
2 A2 In 19 years if the growth rate is
4 Does this mean Inga should be abandoned? NO
Just broken down into smaller pieces
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Inga Annual Net Revenue Stream
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Growth in Demand Cost of Capital
With economies of scale in construction and a
given growth rate in demand, the higher the
cost of capital, then the smaller will become the
optimal size of each installation Alan
Manne Stanford University
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Low High Demand Growth Rates
Demand Capacity
Demand Capacity
Time
Time
High Growth Low Interest Rates
Low Growth High Interest Rates