Cost‐optimal coordinated generation and transmission expansion planning in the context of overcapacity in power systems

Some sub‐Saharan African countries face the paradox of overcapacity in the power sector, where investments in electricity generation far exceed both demand and grid capacity, despite millions still lacking access to electricity. This imbalance stems from inadequate planning and external pressures from donors and private investors, who often prioritize generation over expanding transmission infrastructure. As a result, some power plants remain underutilized, placing financial burdens on governments and raising electricity costs for consumers. This study assessed overcapacity in Rwanda's power system using two key indicators: the plant utilization factor and reserve margin. We propose a coordinated generation and transmission expansion planning model to better align generation capacity with demand and grid development. The problem was analysed using PLEXOS software. Overcapacity in Rwanda rose from 29% in 2017 to 35% in 2023, as generation additions outpaced demand. However, with electricity consumption projected to grow by 10% annually, overcapacity could decline to 21% by 2028, based on committed and ongoing generation projects. Model results show that delaying selected generation projects and strengthening the transmission network could reduce overcapacity by 79% within 5 years and lower operating costs by 11.7% compared to the current master plan. These findings underscore the importance of integrated planning to improve system utilization and efficiency, offering a practical framework for other African countries facing similar challenges.