Essays on the Economics of Cross-Border Wholesale Electricity Trade and Market Integration in Africa

Adaji, Mercy Ojochegbe (2026) Essays on the Economics of Cross-Border Wholesale Electricity Trade and Market Integration in Africa. Doctoral thesis, University of East Anglia.

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Abstract

This thesis examines how cross-border electricity trade can accelerate the decarbonisation of Africa’s power systems, and the institutional and market conditions under which its benefits are maximised in three main chapters.

Using panel data for 21 African countries from 1996 to 2020, Chapter 1 applies a fixed-effects model to quantify the relationship between trade flows and renewable energy penetration. The results show that cross-border electricity trade is significantly and positively associated with the share of renewables in total electricity output, with net importers exhibiting higher renewable shares than net exporters. These findings underscore the enabling role of robust institutions in translating regional trade into effective clean energy deployment.

Chapter 2 complements the empirical analysis with a simulation of market integration in the Southern African Power Pool (SAPP), using an economic dispatch model in GAMS parameterised with costs, generating capacities, demand and capacity factors. Scenarios of perfect and imperfect integration between countries indicate reduced reliance on coal, elimination of oil and gas generation, and increased penetration of solar and wind, with hydropower operating as baseload. This chapter highlights that legacy infrastructure remains pivotal in national portfolios; hence, there is a need for targeted grid investments and supportive policies to unlock integration-driven decarbonisation.

Chapter 3 investigates the impact of governance quality on electricity trade flows by extending a gravity model with governance quality differentials and estimating it using a Prais–Winsten PCSE model. Governance quality: particularly control of corruption, government effectiveness, and political stability and absence of violence, are found to significantly increase bilateral trade volumes, shaping trade imbalances and regional power exchanges.

Together, these essays answer four research questions on the effects and distribution of trade-led decarbonisation, the role of market integration, and the influence of governance. The thesis contributes empirical evidence and system-level modelling that inform policy: deepen regional market integration, strengthen institutional quality, and invest in transmission capacity to harness trade as a practical pathway to a low-carbon future in Africa.

Item Type:	Thesis (Doctoral)
Faculty \ School:	Faculty of Social Sciences > Norwich Business School
Depositing User:	Amy Millward-Doherty
Date Deposited:	27 Aug 2026 08:51
Last Modified:	27 Aug 2026 08:51
URI:	https://ueaeprints.uea.ac.uk/id/eprint/104321
DOI:

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