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

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REGULATORY STUDIES – LOTS 1 AND 2 ECOWAS Regional Electricity Regulation Authority

Regional Capacity Building Plan 8 May 2013

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

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PRINCIPLES (1/2)

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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.

PRINCIPES (2/2)

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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

IDENTIFICATION OF NEEDS

a. Analysis of country questionnaires b. Analysis of ERERA’s missions c. Analysis of NRAs competences d. Conclusion: Various needs according to countries’ classification

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Analysis of capacity building needs

Analysis of country questionnaires Analysis of ERERA’s missions Analysis of NRAs competences

ANALYSIS OF COUNRTY QUESTIONNAIRES (1/3)

Response rate: 60% including 6

• NRAs not having any training program (6/9)
• Multi-sectoral NRAs not always having a specific electricity program (2/3)

Burkina Faso Côte d’Ivoire Gambia Mali Nigeria Togo Benin Senegal Ghana

Complete answers Very incomplete answers

ANALYSIS OF COUNRTY QUESTIONNAIRES (2/3)

7 Burkina Faso Côte d'Ivoire Gambia Mali Nigeria Togo 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 regulatory agency) Yes Yes Yes Yes Yes Yes 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

• Training undertaken by NRAs in place in the last three years

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

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Relatively important but not of priority given the state of advancement of reforms

ANALYSIS OF ERERA’S MISSIONS

Objective: To build capacities of the national regulatory institutions enabling them to support ERERA in its missions

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To ensure trade regulation

• Regulation of cross-border electricity trade
• Fixing tariff rules and accounting transmission costs
• Approving tariff proposals
• Support to NRAs at their request
• Development of rules and regulations specifying the

community regulations regarding cross-border trade

To ensure the harmonization of policies, laws and regulations

• Contribution to the development of a

regulatory and economic environment that is conducive to the development of the regional market

• 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

ANALYSIS OF NRAS’ COMPETENCES

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Skills identified in a majority of NRAs Tariff issues Quality of service Control of compliance with contractual agreements Conflict resolution Control of anti- competitive practices Consumer protection

ANALYSIS OF NRAS’ COMPETENCES

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Common observation: No Market Observatory Mission

VOCATION MISSIONS

To monitor, analyze and compare situations of various electricity markets from the point of view of:

• regulatory authorities
• perators
• users
• To monitor national and regional markets
• Price, supply and demand trends
• Market Liquidity: volume and number of transactions
• Measuring and monitoring performance
• 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

RESOURCES

Need to establish a well structured system for data collection, processing and analysis

CONCLUSION (1/4)

Cross analysis of needs in training NRAs and their skills

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Tariff regulation / Methodology Consumer protection Control of compliance with contractual agreements Quality of service (overall losses: technical and commercial) Conflict resolution Intrinsic needs of regulatory bodies Role and powers of regulatory bodies Electricity sector reform Market observatory

 Strong coherence between analyzed skills and expressed needs

CONCLUSION (2/4)

Group 1

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• Less structured market
• No cross-border trade (in as much as the interconnector, CLSG,

is not operational)

• No regulatory authority

 No knowledge et no experience on what is an electricity market

Group 2

• Cross-border exchanges
• Bilateral exchanges with historical operators
• r network operators
• Markets vertically integrated

 Limited experience and low knowledge of electricity market mecanisms Guinea, Guinea Bissau, Liberia, Sierra Leone

Group 3

• Open, un-integrated markets
• Cross-border exchanges
• Separation of generation, transmission and

distribution functions

• Presence of network operators

 First experiences of trans-boundaries exchanges, sector organization allowed competition and market development. Gambia, Benin, Niger, Burkina Faso, Mali, Senegal, Togo, Côte d’Ivoire Ghana, Nigeria

Needs discrminated according to the market development level

CONCLUSION (3/4)

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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

CONCLUSION (4/4)

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Group 1

Acquisition of basic skills

Group 2

Acquisition of a common set of skills

Group 3

Common set of skills already acquired

Tariff methodology (basic) Tariff Regulation / Methodology Quality of supply Quality of Supply (overall technical, commercial losses and recovery) General issues: governance, sector reform Transmission Network Operation (third-party network access) Dispute Resolution Competition law Training needs discriminated according to the country group

Needs essentially for:

• newcomers
• Recapitulation of basic

principles

AGENDA

1) Principles for drafting the capacity building scheme and identification

• f needs

2) Presentation of the training program 3) Terms and recommendations for implementation

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THE TERMS OF CAPACITY BUILDING EXCLUDING TRAINING PLAN (1/1)

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Staff exchanges ERERA is facilitator and not organizer of trade: trade should be organized by interested parties Currently, only NRAs of the most structured markets (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 Subsidy mechanism may be provided by ERERA for the host NRA, though in a very limited manner after the fashion of ERRA / RERA Attention to the difference in the working language

 Lessons drawn from the experience of ERRA and RERA (report 1)

THE TERMS OF CAPACITY BUILDING EXCLUDING TRAINING PLAN (1/1)

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Information sharing 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

Two main ways

THE TRAINING PLAN (1/2)

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Field Topics

• Gr. 1 Gr. 2 Gr. 3

Bases

Electricity sector developments Basics of the electricity sector Basics of the electricity market and its organization Deepening operation of the electricity market Electricity sector regulation Regulatory bases for markets with vertically integrated operator Bases for regulating open markets Basics of the regulation: relationship between national and regional regulator Basics of the regulation: deepening

Technical and commercial

Quality of service Reducing transmission and distribution losses Standards of quality of service Transmission network operation / Third-party network access Third-party network access - network operation and network code Third-party network access - activities required to adapt the electricity sector to the third-party network access

THE TRAINING PLAN (2/2)

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Field Topics

• Gr. 1 Gr. 2 Gr. 3

Legal

Exchange agreements Exchange agreements – general information Exchange agreements – case studies Private sector participation PPP in the energy sector Concession agreements of system operators Conflict resolution Organization of a conflict resolution structure Conflict resolution procedure

Economic

Tariff regulation Tariff methodology (bases)

W

Tariff methodology: deepening

W W

Tariff methodology: introduction of the Load Flow

W W

Market

• bservatory

Role and functioning of a market observatory Competition Regulating competition

TRAINING PROGRAM (1/3)

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Field Topics P1 P2 P3 P4 P5 P6 B

Electricity sector developments Basics of the electricity sector Basics of the electricity market and its organization Deepening operation of the electricity market Electricity sector regulation Regulatory bases for markets with vertically integrated operator Bases for regulating open markets Basics of the regulation: relationship between national and regional regulator Basics of the regulation: deepening

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Quality of supply Reducing transmission and distribution losses Standards of quality of supply Transmission

• peration

system / work access Third-party network access - network operation and network code Third-party network access - activities required to adapt the electricity sector to the third-party network access

TRAINING PROGRAM (2/3)

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Field Topics P1 P2 P3 P4 P5 P6 J

Exchange agreements

Exchange agreements – general information Exchange agreements – case studies

Private sector participation

PPP in the energy sector Concession agreements of system operators

Conflict resolution

Organization of a conflict resolution structure Conflict resolution procedure

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Tariff regulation

Tariff methodology (bases) Tariff methodology: deepening Tariff methodology: introduction to the Load Flow

Market Observatory

Role and functioning of a market observatory

Competition

Regulating competition

TRAINING PROGRAM (3/3)

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This prioritization is based :

• n the evolution of the complexity of training;
• n the market development level of various groups (Group 1 to

Group 3, presented above);

• in such a way that it is sufficiently spread over the three years

for each group.

Number of recommended training courses per semester for each group

POTENTIAL TRAINING BODIES (1/3)

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Florence School of Regulation (FSR)

• Annual training on the regulation of public

energy services

• in the e-learning form mainly
• Summer schools
• Custom-made training program

Pierre Mendès University France (Grenoble), Paris Dauphine

• Universities have developed a strong expertise on energy market economics
• Economics of Sustainable Development and Energy Division (Pierre Mendès France)
• Center of Geopolitics of Energy and Raw Materials (Paris Dauphine)

Enerdata

• Enerdata Training in France targets energy

professionals

• Price of gas and electricity : basics and

strategies of risk management

• Developing and interpreting energy

forecasts: introduction to modeling

• Training on possible needs

Standard training bodies

POTENTIAL TRAINING BODIES (2/3)

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ERRA / RERA

• Already organizes training sessions for

“beginner” regulators: basic skills in technical, economic and legal regulation

• For regulators already in place: market

structure/trends, design tools and assessment of rate structures Regional Associations of regulators

• To promote development of the regulation of

public services in Africa (anglophone)

• Training sessions scheduled in 2013
• Training on electricity markets and

power pools

• Regulation for practitioners
• Economic fundamentals and regulation
• Management of the electricity sector

reform in Africa African Forum for Utility Regulators (AFUR)

Regional associations

POTENTIAL TRAINING BODIES (3/3)

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IFDD, ex-IEPF Francophone Institute for Sustainable Development

• Contributes to the training and capacity

building of development actors in the energy and environment sectors

• geared towards the training of trainers
• Professionalizing training modules
• conduct and execution of a tariff study

in the electricity sector NARUC

• Standard type training
• Regulatory Partnership Program
• Promotes exchange of experiences and

information between the U.S. Energy Commissions and regulatory bodies around the world

• Financial assistance from USAID
• Work Plan set for the duration of the

partnership for two years on average

Cooperation bodies

FINANCING TERMS

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Financial involvement of national authorities required

Beneficiaries support the training cost  Greater involvement “Listed” training, organized by associations of regulators or training

• rganizations
• ERERA plays a role in disseminating training programs and ensuring

regional coordination

• NRAs determine staff and payment directly to organizers

Training specifically prepared by ERERA

• Content and selection of training by ERERA
• Logistics implemented by ERERA
• Contribution of participants equal to spending made

Proactive policy

To facilitate participation of NRAs or ministries not having the human and financial resources Opportunities of ERERA l’s grant limited in the range of (especially the 1st year):

• NRAs / Ministries Group 1: 2500 € /country / year
• NRAs/Ministries of groups 2/3: 1500€/country/year

 Need to optimize costs by ERERA

AGENDA

1) Principles for drafting the capacity building scheme and identification

• f needs

2) Presentation of the training program 3) Terms and recommendations for implementation

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IMPLEMENTATION

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Expression and validation of needs Analysis of training

• ffers

Drafting and disseminating the training plan

ERERA : 1 dedicated staff

Continuity training -> Action Training assessment

Involvement of NRAs

IMPLEMENTATION

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Expression and validation of needs Analysis of training offers

• Give feedback of training

conducted

• Express their training needs
• Plan the number of staff who are

potentially beneficiaries ERERA: 1 dedicated staff

• Collects new training needs

expressed by the NRAs

• Analyzes them under his strategic

plan

• Ensures availability of a minimum

number of staff

• Drafting a training database
• Updated according to

(a) New needs expressed, (b) Assessments, (c) New offers

• Analysis and selection according to

the cost and relevance criteria Involvement of NRAs

IMPLEMENTATION

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Drafting and disseminating the training plan

ERERA : 1 dedicated staff

• Call for tenders to recruit training

bodies

• Objectives, content, training

bodies

• Program of achievement
• Potentially concerned population
• Cost
• Validate once a year
• Complete if necessary

Continuity Training/Action Training assessment

• Definition of clear objectives of

implementation

• Real knowledge sharing
• By the trainees
• By the facilitator
• Updating the database
• Adjusting the training program for

year n +1 Involve NRAs

ERERA’S WORK PROGRAM – 1ST YEAR

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Before end of July 2013

Validate the proposed training program with all the NRAs

Before end of August 2013 August 2013

Prepare detailed draft specifications for trainings in priorities 1 and 2 Have them complete and validate by NRAs Contact a number of bodies

September 2013 at the latest

Launch a restricted call for tenders

End of November 2013

Recruitment of two or three training bodies

January 2014

Commencement of training of the first year (P1 and P2)

Throughout the year

Monitoring implementation of the training program Spread specifications to training bodies, which present their training

• ffer

Distribution of information between bodies for the year Then, each year, selected training bodies are invited to submit their tenders on the basis of the plan of the year n+1

THANK YOU

Contact: Marie d’ARIFAT ARTELIA Ville & Transport Département ICEA

50 avenue Daumesnil 75579 Paris Cedex 12– France Tél. : +33 (0)1 48 74 04 04 Fax : +33 (0)1 48 74 04 35 icea.paris@arteliagroup.com

Contact: Neil PINTO PPA Energy 1 Frederick Sanger Road Guildford GU2 7YD, UK

Tel: +44 1483 544944 Fax: +44 1483 544955 marketing@ppaenergy.co.uk 33