Electricity Market and Regulators Status in COMESA

1
Electricity Market and Regulators Status in
COMESA
Portfolio Committee on Electricity
General Assembly Meeting Lusaka,
Zambia September, 2014
2
Initiative / Project

• According to the RAERESA Work Programme (Pillar
  2) a task force should complete a survey for all
  19 member countries to determine
• How the electricity sector is regulated, and
• Monitoring the compliance and enforcement of
  local energy market as well as the regional
  markets.

3
Mandate

• The survey shall explore
• The current regulatory status of the electricity
  sector.
• The opportunities and difficulties of further
  market integration from a legal, technical and
  financial aspects.

4
Procedures

• Fact Sheet was designed and sent to member
  countries.
• Respondents were collected from member Countries
• The report contains the necessary analysis,
  evaluation and Conclusions.

5
Report Organization

• Chapter 1 introduction and the scope of the
  report
• Chapter 2 summarizes the findings of the Fact
  sheet
• Chapter 3 a benchmarking for the regulatory
  progress in member countries
• Chapter 4 conclusions
• Appendices (member countries system data, master
  copy of the Fact Sheet)

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Fact Sheet, Basic Information for the last year
(2012-2013)

• Generation Plants
• Transmission Network
• Interconnections
• Distribution Network
• Market Information

7
Eleven indicators have been identified to assess
the current regulatory and market status

• Legislative and regulatory framework
• Financial viability of the industry
• Unbundling of the industry
• Removing obstacles to competition
• Market access
• Market Arrangements
• Implementation of national market
• Regulations
• Technical and commercial rules and agreements
• Infrastructure requirements for market operation
• Imports and Exports

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1-Legislative and regulatory framework

• Separation of policy and operation
• Legislative basis for regulatory agency
• Legislative basis for market mechanisms
• Legislative basis for industrial restructuring
• Provision for private participation
• Competition rules

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2-Financial viability of the industries

• Cost-reflective tariffs
• Elimination of cross subsidies
• Transparent subsidies to targeted groups
• Reduction of non-technical losses
• Transitional commercial arrangements

10
3-Unbundling of the industries

• Disaggregating of activities
• Transmission network operations and market
  functions
• Power Exchange
• Balancing energy pricing
• Ancillary services trade

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4-Removing obstacles to competition

• Break up of dominant positions
• Electricity network extension

12
5-Market access

• Definition of eligible consumers
• Definition of Use of System (UOS) charges
• Procedures for congestion management
• Non-discriminatory operational rules

13
6-Market Arrangements

• Definition of market form
• Establishment of market rules
• Review and drafting of agreements
• Specification and implementation of settlement
  systems

14
7-Implementation of national market

• Official and political responsibility
• Action plan
• Programme management
• First operation of the market

15
8-Regulation

• Independence of regulator
• Powers to perform his duties
• Definition of regulatory principles
• Regulatory capacities

16
9-Technical and commercial rules and agreements

• Network Codes
• Use of System agreements
• Connection charges and procedures

17
10-Infrastructure requirements for market
operation

• Specification of system metering needs
• Specification of consumer metering needs
• Specification of communication and IT
  requirements
• Procurement

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11-Imports and Exports

• Interim arrangements for use of interconnections
• Final arrangements for use of interconnections
• Charging arrangements

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Indicators

• Multiple questions per each indicator have been
  used to assess the current market and regulatory
  frame work.
• Nine Countries responded to the questionnaire,
  viz., Comoros, DRC, Egypt, Ethiopia, Kenya,
  Madagascar, Malawi, Rwanda, and Sudan.

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Benchmarking
Indicators Number of Questions
Legislative and regulatory framework 6
Financial viability of the industries 5
Unbundling of the industries 5
Removing obstacles to competition 2
Market access 4
Market Arrangements 4
Implementation of national market 4
Implementation of national market 4
Regulation 4
Technical and commercial rules and agreements 3
Infrastructure requirements for market operation 4
Imports and exports 3
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Benchmarking (contd)
Number of questions used in Evaluation Benchmarking Category based on number of yes Benchmarking Category based on number of yes Benchmarking Category based on number of yes Benchmarking Category based on number of yes
Number of questions used in Evaluation Fulfilled In progress Starting phase Not yet
6 6 2-5 1 0
5 5 2-4 1 0
4 4 2-3 1 0
3 3 2 1 0
2 2 1 0
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Summary table for Regulatory and Market
Implementation Benchmarking
Summary table for Regulatory and Market Implementation Benchmarking Country Legislative and regulatory framework Financial viability of the industries Unbundling of the industries Removing obstacles to competition Market access Market Arrangements Implementation of national market Regulation Technical and commercial rules and agreements Infrastructure requirements for market operation Imports and exports
Egypt In Progress In Progress Starting Phase In Progress In Progress In Progress Starting Phase Fulfilled Fulfilled Not Yet Not Yet
Comoros In Progress In Progress Not Yet Not Yet In Progress Not Yet In Progress Not Yet Not Yet Starting Phase Not Yet
DRC Fulfilled Fulfilled Not Yet In Progress Fulfilled Fulfilled Fulfilled Fulfilled Fulfilled Starting Phase Fulfilled
Ethiopia In Progress Fulfilled Starting Phase Not Yet Not Yet Not Yet Not Yet In Progress In Progress Not Yet Starting Phase
Rwanda Fulfilled In Progress In Progress In Progress In Progress Fulfilled In Progress Fulfilled Fulfilled Fulfilled Fulfilled
Sudan In Progress Starting Phase Starting Phase In Progress Not Yet Not Yet Not Yet Not Yet Fulfilled Fulfilled Fulfilled
Madagascar Fulfilled Fulfilled Fulfilled Fulfilled In Progress Not Yet Fulfilled Fulfilled Not Yet Not Yet Not Yet
Kenya In Progress In Progress In Progress In Progress Not Yet Not Yet Not Yet Fulfilled Starting Phase Not Yet Starting Phase
Malawi Fulfilled In Progress Starting Phase Not Yet In Progress In progress In progress Fulfilled In Progress Not Yet Not Yet
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Conclusion

• Most of COMESA Member States have set up
  independent regulatory authorities to make
  objective and consistent regulatory decisions.
• However, still regulators meet some reluctance
  that limiting the effectiveness of sector
  regulation.
• Most of the surveyed countries are still facing
  the challenge in a way or another in developing
  their regulation and building competitive
  markets.

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Conclusion(contd)

• The industry unbundling question is still on the
  table for all countries except for Madagascar.
• Still competition is facing obstacles in most of
  the respondent countries.
• Market access is still an issue in countries that
  are not strongly had legal framework and the
  necessary legislations.

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Conclusion(contd)

• Most of the member countries have not fully
  defined their market arrangements.
• All countries are in different stages on route
  to set their codes and technical agreements.
• Cross border trade is far from mature for the
  entire respondent group.

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Recommendations

• One way forward is through benchmarking process.
  It is understood that developing credible and
  effective regulation takes time and needs much
  iteration and it has a learning curve.
• However, it is recommended to repeat the same
  survey every three years to monitor and benchmark
  the progress of the regulatory status in COMESA
  countries.

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Portfolio Group Meeting and Executive Committee
Recommendations

• The status report should be shared with all
  stakeholders and should be widely disseminated.
• The meeting agreed that these reports be
  repeated on regular bases for every three years
  to be used as an observatory for the development
  in regulatory status in the member countries.
• Countries, which had not completed the data
  collection formats are requested to respond as
  soon as possible as well as for those whom had
  responded to update the information, as it may
  be needed.

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Thank You For Your Attention salmawy_at_link.net