Association of Energy Regulators for Eastern and Southern Africa

EgyptEra

Electricity Market and Regulators

Status in COMESA

General Assembly Meeting Lusaka, Zambia

September, 2014

Portfolio Committee on Electricity

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.

MandateThe 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.

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.

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)

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

Generation Plants

Transmission Network

Interconnections

Distribution Network

Market Information

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

1. Legislative and regulatory framework

2. Financial viability of the industry

3. Unbundling of the industry

4. Removing obstacles to competition

5. Market access

6. Market Arrangements

7. Implementation of national market

8. Regulations

9. Technical and commercial rules and agreements

10. Infrastructure requirements for market operation

11. Imports and Exports

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

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

3-Unbundling of the industries

Disaggregating of activities

Transmission network operations and market

functions

Power Exchange

Balancing energy pricing

Ancillary services trade

4-Removing obstacles to competition

Break up of dominant positions

Electricity network extension

5-Market access

Definition of eligible consumers

Definition of Use of System (UOS) charges

Procedures for congestion management

Non-discriminatory operational rules

6-Market Arrangements

Definition of market form

Establishment of market rules

Review and drafting of agreements

Specification and implementation of settlement

systems

7-Implementation of national market

Official and political responsibility

Action plan

Programme management

First operation of the market

8-Regulation

Independence of regulator

Powers to perform his duties

Definition of regulatory principles

Regulatory capacities

9-Technical and commercial rules and agreements Network Codes

Use of System agreements

Connection charges and procedures

10-Infrastructure requirements for market operation

Specification of system metering needs

Specification of consumer metering needs

Specification of communication and IT requirements

Procurement

11-Imports and Exports

Interim arrangements for use of interconnections

Final arrangements for use of interconnections

Charging arrangements

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.

BenchmarkingIndicators Number of Questions

Legislative and regulatory framework 6Financial viability of the industries 5Unbundling of the industries 5Removing obstacles to competition 2Market access 4Market Arrangements 4Implementation of national market 4Implementation of national market 4Regulation 4Technical and commercial rules and agreements

3

Infrastructure requirements for market operation

4

Imports and exports 3

04/20/23

21

Benchmarking (cont’d)

Number of questions used in Evaluation

Benchmarking Category based on number of yes

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

Summary table for Regulatory and Market Implementation Benchmarking

Summary table for Regulatory and Market Implementation BenchmarkingCountry

Legislative and

regulatory

framework

Financial viability of the

industries

Unbundling of the

industries

Removing

obstacles to

competition

Market access

Market Arrangemen

ts

Implementation of national

market

Regulation

Technical and

commercial rules

and agreement

s

Infrastructure

requirements for market

operation

Imports and

exports

EgyptIn

ProgressIn

ProgressStarting Phase

In Progress

In Progres

sIn Progress Starting Phase Fulfilled Fulfilled Not Yet Not Yet

ComorosIn

ProgressIn

ProgressNot Yet Not Yet

In Progres

sNot Yet In Progress Not Yet Not Yet

Starting Phase

Not Yet

DRC Fulfilled Fulfilled Not YetIn

ProgressFulfilled Fulfilled Fulfilled Fulfilled Fulfilled

Starting Phase

Fulfilled

EthiopiaIn

ProgressFulfilled Starting Phase Not Yet Not Yet Not Yet Not Yet

In Progress

In Progress Not YetStartin

g Phase

Rwanda FulfilledIn

ProgressIn Progress

In Progress

In Progres

sFulfilled In Progress Fulfilled Fulfilled Fulfilled

Fulfilled

SudanIn

ProgressStarting Phase

Starting PhaseIn

ProgressNot Yet Not Yet Not Yet Not Yet Fulfilled Fulfilled

Fulfilled

Madagascar Fulfilled Fulfilled Fulfilled FulfilledIn

Progress

Not Yet Fulfilled Fulfilled Not Yet Not Yet Not Yet

KenyaIn

ProgressIn

ProgressIn Progress

In Progress

Not Yet Not Yet Not Yet FulfilledStarting Phase

Not YetStartin

g Phase

Malawi FulfilledIn

ProgressStarting Phase

Not YetIn

Progress

In progress In progress FulfilledIn

ProgressNot Yet Not Yet

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.

Conclusion(cont’d) • 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.

Conclusion(cont’d) • 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.

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.

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.

Thank You For Your Attentionsalmawy@link.net