The Economic Community of West African States (ECOWAS) works to promote economic integration amongst its fifteen member countries in the region. ECOWAS’ goal is to develop an integrated regional energy market in West Africa and share energy resources that will aid the development of the electricity sector in West Africa.
In 2008, the Member States of ECOWAS established the Regional Electricity Regulatory Authority (ERERA), which has a general mission of regulating cross-border electricity exchanges between ECOWAS member states while overseeing the implementation of measures needed to ensure reliability and contribute to the creation of an environment suitable for the development of a regional energy market. In doing so, ERERA supports ECOWAS member states’ capacity to engage in power transactions, share reserves, and develop an enabling environment for private investment.
The total population in the ECOWAS region is estimated to be 340 million people, two-thirds of which live in three countries: Nigeria, Ghana, and Côte d’Ivoire (which also are the most advanced economies of the region). Currently, only 50% of the regional population has access to electricity, and the supply of power is unstable. In this context, the creation of a regional energy market and the interconnection of neighboring power systems will help to increase grid resilience and accessibility.
With support from the United States Agency for International Development (USAID) and Power Africa, the West Africa Regional Regulatory Partnership works to contribute to the enhancement of the regulatory framework for the regional power market and ensure that energy regulators in West Africa are better positioned to achieve harmonized energy markets. Ultimately, market harmonization can lead to more efficient, fully functioning free markets that support power trade and are appealing to private investors.
Currently, NARUC is assisting various West African regulatory bodies by defining the roles and responsibilities of stakeholders in the electricity sector to ensure efficient market operation and grid stability. As the partnership progresses, NARUC will continue to facilitate trainings and dialogues to advance technical, economic, and legal regulatory frameworks to support regional power trade.
NARUC also assists the Commission de Régulation du Secteur de l’Electricité (CRSE) through the Senegal Energy Regulatory Partnership.
Regional Market Integration
The ECOWAS member states’ desire to create a regional power market and share energy resources has led to the adoption of an Energy Protocol designed to put in place the appropriate legal and institutional environment for the development of the electricity sector of West Africa. Since March 2021, NARUC has provided technical assistance to develop a Functional Model on System Reliability and Electricity Market Design, accompanying technical documents, and a Gap Analysis Report. The Functional Model will define the roles and responsibilities of functional entities participating in the regional market and will also serve to identify any existing gaps in system reliability and market operation functions.
By removing any confusion about the roles and responsibilities of different entities for each task within the regional energy market, the Functional Model will allow ERERA to set market operation standards that are conducive to reducing trade barriers and promoting reliable markets. It will be designed to be a living document, maintained by ERERA, which can be updated and modified to reflect the evolving nature of the West African regional market.
The accompanying Gap Analysis Report will provide recommendations on addressing the gaps identified by the Functional Model. NARUC’s assistance is ultimately intended to support ERERA’s role in enhancing ECOWAS member countries’ capacity to engage in power transactions, share reserves, and develop an enabling environment for private investment in much-needed energy infrastructure.
West Africa Regional Regulatory Partnership
With support from the United States Agency for International Development (USAID), the National Association of Regulatory Utility Commissioners (NARUC) is working with the Economic Community of West African States’ (ECOWAS) Regional Electricity Regulatory Authority (ERERA) to launch the development of a Functional Model on System Reliability and Electricity Market Design.
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Photo Credit: © Peter Hermes Furian / Adobe Stock
Project Dates: 2011-2016; 2020- Present
Economic Community of West African States (ECOWAS)
ECOWAS Regional Electricity Regulatory Authority (ERERA)