REGULATORY STUDIES L OTS 1 AND 2 ECOWAS Regional Electricity - PowerPoint PPT Presentation

REGULATORY STUDIES – L OTS 1 AND 2 ECOWAS Regional Electricity Regulation Authority Regional Capacity Building Plan 8 May 2013 1

AGENDA 1) Principles for drafting the capacity building scheme and identification of needs 2) Presentation of the training program 3) Terms and recommendations for implementation 2

PRINCIPLES (1/2) ERERA is a regional “regulator” : its mission is to ensure implementation of the conditions required to guarantee the rationalization and reliability of cross-border energy trade . It should maintain partnership relations with the NRAs and provide them, upon their request, with technical assistance . As part of implementation of ERERA, NRAs have expressed the desire to support them to:  facilitate communication and information sharing among stakeholders of the regional market  build capacity of national regulators. Thus, if capacity building is not a direct mission of ERERA, then there should be a way for ERERA to build its action capacity based on NRAs that are capable of fully performing their duties at the national level . 3

PRINCIPES (2/2) There are associations of energy regulators with a specific mission to develop cooperation between regulatory bodies, promote trade and develop skills : ERRA (Central Europe and Eurasia) and RERA (Southern African countries ) These associations have developed specific expertise in capacity building. That is not the role of ERERA, which is mainly a regulatory body. ERERA’s program should pursue specific objectives, namely :  to allow ERERA to rely on national counterparts within the framework of achieving its missions;  to be prepared to support ERERA’s actions;  to allow NRAs / Ministries to develop a common knowledge base (common base ) In this context,  ERERA should play the role of facilitator and coordinator / organizer 4

IDENTIFICATION OF NEEDS Analysis of ERERA ’s missions Analysis of country Analysis of NRAs questionnaires competences Analysis of capacity building needs a. Analysis of country questionnaires Analysis of ERERA’s missions b. c. Analysis of NRAs competences d. Conclusion: Various needs according to countries ’ classification 5

ANALYSIS OF COUNRTY QUESTIONNAIRES (1/3) Complete answers Response rate: 60% including Burkina Faso Mali Côte d’Ivoire Nigeria Gambia Togo Very incomplete answers Ghana Senegal Benin  NRAs not having any training program (6/9)  Multi-sectoral NRAs not always having a specific electricity program (2/3) 6

ANALYSIS OF COUNRTY QUESTIONNAIRES (2/3) • Training undertaken by NRAs in place in the last three years Burkina Côte d'Ivoire Gambia Mali Nigeria Togo Faso Governance No Yes No Yes Yes Yes Electricity sector reform Yes No No Yes Yes Yes Electricity sector regulation (the role and powers of the Yes Yes Yes Yes Yes Yes regulatory agency) Tariff methodology (rate and price determination issues) Yes Yes Yes Yes Yes Yes Electricity market rules Yes Yes Yes Yes Yes Yes Renewable energies Yes Yes Yes Yes Yes Yes Funding energy sector projects Yes Yes No No Yes Yes 7

ANALYSIS OF COUNTRY QUESTIONNAIRES (3/3) Identified training needs  General and less technical training  Needs mainly related to proper understanding:  Regulation: the role and powers of an NRA, service prices, consumer protection  Energy market as could be implemented in West Africa Relatively important but not of priority given the state of advancement of reforms 8

ANALYSIS OF ERERA’S MISSIONS Objective: To build capacities of the national regulatory institutions enabling them to support ERERA in its missions To ensure trade regulation To ensure the harmonization of policies, laws and regulations  Regulation of cross-border electricity trade  Fixing tariff rules and accounting transmission costs  Contribution to the development of a  Approving tariff proposals regulatory and economic environment that  Support to NRAs at their request is conducive to the development of the  Development of rules and regulations specifying the regional market community regulations regarding cross-border trade  Establishment of a clear and fair pricing methodology Monitoring the functioning of the regional market  Compliance with the principle of free transit of electricity  Compliance with technical and commercial regulations: conditions for access to the transmission network, operators entering the market …  Preventing and sanctioning anti-competitive practices: abuse of dominant position, at-risk situations  Conflict resolution  Monitoring technical, business and financial performance 9

ANALYSIS OF NRA S ’ COMPETENCES Tariff issues Conflict resolution Skills identified in a majority of NRAs Quality of service Control of anti- competitive practices Control of Consumer protection compliance with contractual agreements 10

ANALYSIS OF NRA S ’ COMPETENCES Common observation: No Market Observatory Mission To monitor, analyze and compare situations of various electricity markets from the point of view of: VOCATION  regulatory authorities  operators  users  To monitor national and regional markets  Price, supply and demand trends  Market Liquidity: volume and number of transactions  Measuring and monitoring performance MISSIONS  Measuring and monitoring quality of services  To produce and disseminate regulatory or economic studies in order to:  facilitate access to information for all the market players guide regulators’ decisions to promote improvement of electricity utilities  Need to establish a well structured system for data collection, processing and RESOURCES analysis 11

C ONCLUSION (1/4) Tariff regulation / Methodology Cross analysis of needs in training NRAs and their Consumer protection skills Control of compliance with contractual agreements Conflict resolution  Strong coherence between analyzed skills and expressed needs Quality of service (overall losses: technical and commercial) Intrinsic needs of Role and powers of regulatory bodies regulatory bodies Electricity sector reform Market observatory 12

C ONCLUSION (2/4) Needs discrminated according to the market development level Group 1  Less structured market  No cross-border trade (in as much as the interconnector, CLSG, Guinea, Guinea is not operational) Bissau, Liberia, Sierra  No regulatory authority Leone  No knowledge et no experience on what is an electricity market Gambia, Benin, Niger, Burkina Group 2 Group 3 Faso, Mali, Senegal, Togo, Côte Ghana, Nigeria d’Ivoire  Open, un-integrated markets  Cross-border exchanges  Cross-border exchanges  Bilateral exchanges with historical operators  Separation of generation, transmission and or network operators distribution functions  Markets vertically integrated  Presence of network operators  Limited experience and low knowledge of  First experiences of trans-boundaries electricity market mecanisms exchanges, sector organization allowed competition and market development. 13

C ONCLUSION (3/4) Common training requirements for all countries Functioning and evolution of the sector Roles and powers of NRAs Role and functioning of a market observatory Exchange agreement 14

C ONCLUSION (4/4) Training needs discriminated according to the country group Group 3 Group 1 Group 2 Common set of skills already Acquisition of basic skills Acquisition of a common set of skills acquired Tariff methodology (basic) Tariff Regulation / Methodology Quality of Supply (overall technical, General issues: governance, Quality of supply commercial losses and recovery) sector reform Transmission Network Operation Needs essentially for: (third-party network access)  newcomers Dispute Resolution  Recapitulation of basic principles Competition law 15

AGENDA 1) Principles for drafting the capacity building scheme and identification of needs 2) Presentation of the training program 3) Terms and recommendations for implementation 16

THE TERMS OF CAPACITY BUILDING EXCLUDING TRAINING PLAN (1/1) Staff exchanges ERERA is facilitator and not organizer of trade: trade should be organized by interested parties  Lessons drawn from the Currently, only NRAs of the most structured markets experience of ERRA and RERA (report 1) (Ghana and Nigeria) have an experience in sharing Setting a clear preliminary work program  Need to prepare the exchange for it to be win / win Attention to the difference in the working language Subsidy mechanism may be provided by ERERA for the host NRA, though in a very limited manner after the fashion of ERRA / RERA 17

THE TERMS OF CAPACITY BUILDING EXCLUDING TRAINING PLAN (1/1) Information sharing Two main ways Annual ERERA Forum In the medium term, establishment of a “platform / social network of regulators” moderated by ERERA  Objectives : sharing knowledge / experience, capitalization, reduction of delays  Various functions : address book, information on the network collaborators, information on projects, instant discussion  A simple and convenient tool  A secure tool 18