By Damien Frame, UK Energy Research Centre, and Madalitso Chikumbanje and Stuart Galloway, University of Strathclyde
When faced with widespread burdensome power outages, consumers, from individuals to large industrials, seek alternatives. However, of late the usual diesel backup generator has become a costly solution.
In southern Africa, Malawi is turning to renewable self-generation to solve the problem, but it is not without shortcomings.
With large scale infrastructure and investments taking years to materialise in the power sector, many countries operate at a level of reduced operational effectiveness. This is particularly true for new and emerging power markets, where long lead times undermine the urgency of solving challenges such as a lack of adequate generation and rapidly increasing demand.
In Malawi, both the government and donor community are working to increase access to electricity and ensure the reliability of supply. In 2016, the electricity market was liberalised with the aim of attracting new investments but recently published data  reveals that on an average weekly basis, most industrial demand experiences a single outage of 21 hours, while residential demand experiences seven outages (~5 hours duration each). The persistence of power disruptions has led many industrial consumers and creditworthy individuals to install onsite power generation facilities for self-supply.
Historically, industries would install back-up diesel generators. However, longer and more frequent outage durations in Malawi have made the use of diesel generators an increasing financial burden. Some companies are taking advantage of the unused space on their land or rooftops to install megawatt (MW) scale solar photovoltaic (PV) power plants. These installations meet their energy needs with a lower financial and environmental impact, reduce exposure to the vagaries of the main grid, and open options for cost-effectively exporting excess electricity to the national network as micro or small independent power producers (IPP).
Although policy and regulation for off-grid (mini-grid) arrangements have been developed recently and deployment of such solutions is ramping up, it is unlikely that complete grid separation and full self-sufficiency will provide an attractive option for large industrial customers. Industrial customers with ‘private wire networks’ connecting self-owned generation for self-supply behind a grid connection is an increasingly likely scenario. The current regulation is ill-prepared for the entirely new set of challenges that this scenario creates.
Despite these small scale IPPs having the potential to meet with market liberalisation objectives, there are shortcomings around issues such as:
• licensing and admission into the electricity market;
• planning procedures and technical agreements; and
• commercial agreements.
The policy and regulatory environment in Malawi demonstrates significant barriers to allow a smooth transition towards the intended direction.
Challenge: licensing and admission into the market
The current regulation  stipulates that anyone connected to the grid and generating more than 20kVA of power for own use should be registered with the regulatory body, Malawi Energy Regulatory Authority (MERA). Market rules  identify that self-generators can be recognised as electricity market participants upon MERA’s authorisation. This is crucial as it acts as a licence for potential participants to be admitted into the market by the system and market operator. However, it is unclear on what procedures should be followed to obtain the necessary regulatory authorisation, creating a barrier to entry into the market.
Challenge: technical planning and agreements
As electrical power is physically traded through the network, it is important for potential self-generating market participants to know the planning procedures to follow and technical agreements to meet. Current procedures and agreements  are clear on what is needed for bulk power producers and consumers but there is no clarity for these emerging IPPs.
This regulatory incompatibility poses a threat to the success of such projects. While the grid code can be used as a technical reference, it is neither a planning guideline nor a technical agreement. The wider impact is Malawi is missing out on this much needed generation capacity that is readily available at reduced timescales.
Challenge: commercial agreements
The feasibility of any power generation project is dependent on commercialagreements between the generator and the buyer. For conventional power plants, power flow is unidirectional making the process more straight-forward. However, for self-generators who meet their demand via a mixture of generation and grid import, and sometimes export surplus energy into the grid, a bidirectional flow of power exists. This bidirectional flow raises technical considerations concerningmetering and billing, coordination of power flow and fault levels. To specifically look at billing, industrial customers in Malawi are billed using a composite tariff of maximum demand and energy consumption . On the other hand, bulk PV generators use energy only tariffs  and there is currently no regulation to even out this difference, making the establishment of commercial agreements increasingly difficult.
The reduction in cost of PV generation opens opportunities for Malawian industries to adapt their energy sources and contribute to reducing the energy deficit in the grid. Ideally, one would expect regulation that clearly lays out how self-generators are admitted and participate in the electricity market (eg as in India and Nigeria). Though such generators do not produce an enormous amount of energy, a group or aggregation of such entities may be a more immediate solution to meeting some of the energy needs that are experienced in most sub-Sahara African countries. ESI
About the authors
Damien Frame is a member of the UK Energy Research Centre and a Research Fellow at the University of Strathclyde. His research focuses on the opportunities and challenges associated with local energy system deployment in the UK and abroad.
Madalitso Chikumbanje is a PhD student at University of Strathclyde, researching the planning and design of future decentralised power systems in developing countries.
Stuart Galloway is a professor at the University of Strathclyde, researching micro-grid applications and the data analytics related to smart energy, smart grid and behavioural change.
 Electricity Supply Corporation of Malawi (ESCOM), “ESCOM Website,” 2015. [Online]. Available: http:// www.escom.mw/electricity-management-south.php. [Accessed 17 January 2019].
 Republic of Malawi, The Energy Regulation Act 2004, Lilongwe: Government of Malawi, 2004.
 Malawi Energy Regulatory Authority (MERA), “Market Rules for the Malawi Electricity Market,” MERA, Lilongwe, 2016.
 Republic of Malawi, “Independent Power Producer (IPP) Framework for Malawi,” Government of Malawi, Lilongwe, 2017.
 Electricty Supply Corporation of Malawi (ESCOM), “ESCOM Website,” 2015. [Online]. Available: http:// www.escom.mw/current-tariffs.php. [Accessed 21 January 2019].