1 Status on ISMO, IRP2010 and New Generation Regulations

2 Table of Contents The Regulatory Framework Electricity Regulator Act Regulations under the ERA New generation capacity regulations The Buyer Integrated Resource Plan (IRP) Conclusion

3 Regulatory Framework  Energy regulator Act  National Energy Act  Electricity Regulator Act Electricity Regulator Act –Provides for licensing of generation, transmission, distribution and trading. –Allow for development of the Integrated Resource Plan (IRP) by the government. –Allows the regulator to issue generation license in line with the IRP. –Provides the promulgation of various regulations by the Minister. Regulations under the ERA –Expropriation regulation –Regulations on norms and standards for reticulation services –New generation capacity regulations

4 New Generation Capacity Regulations Provide a framework for: –Procurement of new generation capacity through:  IPP bid programme  REFIT programme –The development of the Integrated Resource Plan (IRP) Note that the REFIT programme is a programme designed to meet the immediate renewable target The role of the regulator, SO and the plans are outlined whilst the buyer remain undetermined In terms of the Act and the regulations, the Minister must determine the buyer of power emanating from the two programmes.

Who is the buyer? –The Minister needs to do the determination in accordance with the ER Act and the regulations –Discussions are taking place at Inter-Ministerial Committee on energy on how best to establish an independent buying function –The Department of Energy is currently negotiating a Bill at the inter- governmental level for the establishment of an Independent System and Market Operator.

The Integrated Resource Plan (IRP) –IRP 1 was completed with a 3 year window lifespan –IRP 2 is close to completion –Assumptions for the IRP 2 were completed and consulted with stakeholders –A base case has been completed and presented to the IMC on energy –A policy and risk adjusted IRP will be out for stakeholder comment shortly –IRP 2 approval is expected in late November 2010 and it will be valid for 20 years. –The IRP2 may be reviewed as and when necessary.

Conclusion It should be noted that the whole regulatory framework is under review to allow for easy participation of IPPs in electricity generation In the absence of an independent buyer, the Department will facilitate the documentation for the procurement of the IPPs. After the Ministerial determination, all procurement documentation will be transferred to the designated buyer.

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