Energy regulator in Africa’s copper hotspot, on 03 December commissioned a one year Cost of Service Study (CSS) in the capital Lusaka. Energy Minister Matthew Nkhuwa implored London based Energy Markets and Regulatory Consultants (EMRC) the entity chosen to conduct the study to adhere to the prescribed timeline of 12 months. Nkhuwa stated that he was cognizant that the assignment could take between 6-9 months to completion.
Zambia grapples with energy pricing inefficiencies charging the lowest non cost reflective tariffs in the Southern African region which has hampered investment in power generation. The major power utility struggles with operational inefficiencies manifesting in negative jaws exacerbated by a higher costs velocity than its revenue generation. Two years ago, the energy regulator had commissioned an Africa Development Bank (AfDB) funded cost of service study which did not yield the desired results and was hence was called off. Nkhuwa echoed the urgency of results of the CSS in Zambia’s path to not only cost reflective, but optimal tariffs.
EMRC Executive Director Dr. Tom Jardine said he was confident that his team is capable of executing the task given their level of experience. Jardine has led electricity cost of service and tariff studies in Lesotho, Nigeria and Kyrgyzstan, including evaluating the most economic options for energy access and rural electrification in Lesotho.
“On the basis of the outcome of the long term demand forecast, EMRC will develop a long term least cost expansion plan covering expansion, generation and distribution to meet the projected maximum demand forecast for the next 20 years. The plan will incorporate renewable energy generation and development in the South Africa Power Pool (SAPP). The consultant will also determine the cost of supply structure,” ERB Executive Director Langiwe Lungu said at the commissioning.
Energy Market and Regulatory Consultants (EMRC) are consultants and advisers in energy markets, regulation, transactions and commercial issues. MRC’s consultants offer expertise in energy markets, regulation and transactions.
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