Building a Regional Electricity Market: SAPP Challenges

This case study examines the development of the Regional Electricity Market (REM) within the Southern African Power Pool (SAPP), an association of national utilities from Southern African Development Community (SADC) member states. It analyzes the transition from a cooperative pool to a competitive market, the role of Independent Power Producers (IPPs), and the challenges posed by diverse national agendas and infrastructure deficits.

• The Southern African Power Pool (SAPP), established in 1995, has evolved from a cooperative association of national utilities into a competitive regional electricity market (REM). This transition included the creation of a short-term energy market in 2001, a balancing market in 2002, and a day-ahead market in 2009.
• SAPP facilitates regional energy integration by connecting a 'Thermal Southern Network' (including South Africa, Namibia, Botswana, Lesotho, and Swaziland) with a 'Hydro Northern Network' (including the Democratic Republic of Congo, Angola, Zambia, Zimbabwe, Mozambique, Malawi, and Tanzania). A 400 kV line interconnection in 1995 provided the initial platform for this trade.
• Despite its role in driving the REM, SAPP has limited authority over member states and cannot force national decisions. It acts primarily as a counselor and provides criteria for utilities or IPPs wishing to enter the market, while the political will of member states remains a primary challenge.
• South Africa is a dominant actor in the regional energy sector, with its national utility, Eskom, producing and supplying nearly 80% of the total regional demand.
• South Africa has implemented a Renewable Energy and Independent Power Producer Procurement Programme (REIPPPP) to increase the share of IPPs to 30% of future energy production. This program aimed for a target of 3,725 MW and has seen significant price drops between the first and second bidding windows: wind energy prices fell by 22% and solar by 40%.
• Several SADC member states have not yet integrated into the REM, specifically Tanzania, Malawi, and Angola, whose national utilities remain non-operating within SAPP.

APA

Maupin, A. (2013). Building a Regional Electricity Market: SAPP Challenges. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2013/12/REV_SAIIA_perisa_pg_CS4_maupin_20131212.pdf

Chicago

Maupin, Agathe. Building a Regional Electricity Market: SAPP Challenges. South African Institute of International Affairs, 2013. https://saiia.org.za/wp-content/uploads/2013/12/REV_SAIIA_perisa_pg_CS4_maupin_20131212.pdf.

Wikipedia

{{cite report |last1=Maupin |first1=Agathe |title=Building a Regional Electricity Market: SAPP Challenges |publisher=South African Institute of International Affairs |date=August 2013 |url=https://saiia.org.za/wp-content/uploads/2013/12/REV_SAIIA_perisa_pg_CS4_maupin_20131212.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{maupin2013building, author = {Maupin, Agathe}, title = {{Building a Regional Electricity Market: SAPP Challenges}}, institution = {South African Institute of International Affairs}, year = {2013}, month = aug, url = {https://saiia.org.za/wp-content/uploads/2013/12/REV_SAIIA_perisa_pg_CS4_maupin_20131212.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }