Cabinet has approved the implementation of Open Access to electricity transmission and distribution networks in the country to improve access, competition, and investments, which should engender better consumer service and quality.
Minister of Information and Media Cornelius Mweetwa announced today that the decision was taken at a special cabinet meeting on Monday, June 10.
The Electricity Act of 2019 provides for open access to transmission and distribution lines in the country. It is intended to improve the electricity market structure by allowing third parties to use an entity’s transmission and distribution infrastructure at a fee, which takes away discriminatory usage, improves competitive practice, and gives consumers an option of suppliers. Open access would also improve capital allocation as a provider or generator of electricity need not put up their own infrastructure to move their power provided there is already existing infrastructure.
Mweetwa explained that implementing open access entails separating the system operator function from ZESCO Limited and creating an Independent System and Market Operator.
The appropriate open-access market structure and regulations to guide the rules will also be created.
“The market structure and open access regulations will promote non-discriminatory access to the transmission and distribution networks and foster competition, giving consumers alternative sources of electricity, thereby creating competition, as competition leads to better quality services and lower prices,” he explained.
The decision is further expected to encourage investment in transmission and distribution infrastructure as third-party users will pay for network use. This should create sufficient revenue for the network owners to develop and maintain the grid.
Mweetwa said this would also promote investment in generation and security of supply as more power producers will invest in generation.
The other progressive developments in the electricity sector approved in the same sitting of Cabinet include the promulgation of two statutory instruments for Net Metering Regulations and the Distribution Grid Code Regulations, also provided for in the Electricity Act.
Net metering is a billing mechanism that allows consumers who generate some or all of their own power to store their electricity in the grid. This enables consumers to use their electricity anytime rather than when it is generated. The excess power is sold to the grid. Unused electricity stored in the grid is credited back to the user-producer. Net metering is especially important with renewable energy sources.
With the debilitating episodes of power rationing the country has been experiencing for many years now, the government hopes that enabling net metering will promote self-generation among consumers and reduce the burden on the national grid.
“The proposed Statutory Instruments will promote self-reliance among electricity consumers connected to the grid, thereby freeing up electricity for other socio-economic activities, leading to national development and assure reliability and stability of the grid,” Mweetwa said.
He added that the absence of net metering regulations has hampered consumers’ investment in self-generation, leading to their heavy reliance on electricity from the grid.
“This situation has resulted in the disruption of consumers’ socio-economic activities each time there is a power supply interruption like in the current drought situation.”
Mweetwa also stated that the absence of Distribution Grid Code Regulations compromises power system reliability and stability and potentially discriminates against renewable energy sources that would be integrated into the national grid.
