Peer-to-Peer Electricity Trading: A Policy Approach for Rwanda

Developing countries often face difficulties in scaling and maintaining their electrical grids due to many factors including limited generation capacity, scarcity of capital for infrastructure, and rapidly increasing demand. The advent of distributed, grid-connected energy sources provides opportunities to increase the power grid’s reliability and capacity in such contexts. For those distributed sources to be effectively used, however, a corresponding electricity market is needed. This paper proposes a peer-to-peer trading scheme for that electricity market to incentivize and serve all parties. Rwanda is the initial location for which this electricity trading market is proposed. The paper proposes a system with roots in Spain and Germany’s successful feed-in tariff systems, with the new framework tailored to serve Sub-Saharan Africa and the region’s unique challenges. Net metering and net billing are compared for efficacy in such a trading scheme. Frameworks for electricity trade management and financial incentives are presented for the Rwandan national grid context, with clear potential to be expanded and applied for power grids across the African continent.