Why EWURA ensures electricity sub-sector registers national goals

14Jul 2020
Daniel Semberya
The Guardian
Why EWURA ensures electricity sub-sector registers national goals

​​​​​​​Energy and particularly electricity plays a vital role in the socio-economic development of any country. Availability, affordability, reliability and access to electricity services are key ingredients towards achieving desired socio-economic development in Tanzania.

Highlighting the achievements attained during the financial year 2018/2019, which ended on the 30th June 2019, the Energy and Water Utilities Regulatory Authority (EWURA)’s Acting Director General Nzinyangwa E. Mchany pointed those achievements attained among others as: The enactment of subsidiary legislations, adherence of licensees to applicable legislation and regulatory frameworks, and improved provision of services by licensees to electricity consumers.

Others are increased level of awareness to electrical installation licenses, issuance of 654 electrical installation licences; issuance of eight (8) generation licences; publishing four regulatory tools; connection of 198,286 new customers; reduced electricity losses, and increased demand of the regulatory intervention to matters regarding licensing, consumer complaints resolution and electricity accident investigation.

He noted “Successful implementation of these activities has taken the electricity sub-sector steps forward as evidenced by increased energy demand, electricity access, connectivity and investment.”

In order to ensure continuous improvement of these aspects of the electricity supply system, the Authority continued to implement its mandate to regulate the sector the stated financial year.

This was revealed in EWURA’s latest Report, entitled “The Electricity Sub-Sector Regulatory Performance Report for the Financial Year 2018/2019.”

The report presents the performance of key stakeholders in the electricity sub-sector, particularly in electricity generation, transmission, distribution, supply and cross border trade.

In line with the National Development Goals which includes industrialisation agenda among others, the Authority’s strategic objective was to ensure improved regulated services which include quality, availability and affordability of the electricity supply.

The strategies for implementation of this objective included development and review of regulatory tools; monitoring and enforcing quality of service standards; promotion of commercial viability of regulated suppliers; development and implementation of measures to protect consumer interests.

Others are licensing and registration of regulated suppliers; promotion of modern energy use; ensuring efficient procurement of regulated infrastructure; and facilitating investments for sustainable supply of electricity.

The Electricity Act, Cap. 131 gives EWURA mandate to perform both technical and economic regulation of the Electricity Supply Industry (ESI) in Mainland Tanzania pursuant to Section 5 and 6 of the Act.

The Authority’s activities in relation to the electricity sub-sector include: Protecting customer interests through the promotion of competition; promoting access to, and affordability of electricity services particularly in rural areas; promoting least-cost investment and the security of supply for the benefit of customers.

Also promoting improvement in the operational and economic efficiency of the electricity supply industry and efficiency use of electricity; promoting appropriate standards of quality, reliability and affordability of electricity supply.

Furthermore, taking into account the effect of the activities of the electricity supply industry on the environment; protecting the public from dangers arising from the activities of the electricity supply industry; and promoting the health and safety of the individuals employed in the electricity supply industry.

Currently, the ESI is dominated by TANESCO which is a public utility, and vertically integrated, while private utilities have relatively small stake in the ESI.

The Electricity Act, Cap 131 and EWURA Act, Cap 414 gives mandate to the Authority to regulate the electricity sub-sector in Mainland Tanzania.

Under these Acts, the Authority is mandated to undertake technical and economic regulatory functions in the Electricity Sub-sector.

The regulatory functions that are implemented by the Authority in the Electricity Sub-sector are geared towards: Efficient and safe operation of the Electricity Supply Industry (ESI); protection of interests of consumers, the Government and other Stakeholders; and attraction of investments into the Sub-sector.

During the period from 1st July 2018 to 30th June 2019, EWURA continued to oversee regulatory performance of the Electricity Sub-Sector.

The report presents regulatory activities carried out by the Authority and performance in the ESI in Mainland Tanzania including provision of reliability and security of electricity supply, Urban and Rural electrification, investment in power infrastructure, efficiency of operations and quality of services provided to electricity consumers.

The Electricity Act, Cap. 131 gives the Authority mandate to perform both technical and economic regulation of the Electricity Supply Industry (ESI) in Tanzania Mainland pursuant to Section 5 and 6 of the Act.

This report presents Electricity Sub-Sector Regulatory Performance during the period from 1st July 2018 to 30th June 2019. The report is made under Section 30(7) that requires the Authority, by regulation, to publish periodic reports on the performance of licensees, including but not limited to the quality, reliability and security of supply, progress with electrification, investment, efficiency of operations and other standard of customer services.

During the reporting period, six regulatory tools were developed. These are: The Electricity (Generation, Transmission and Distribution Activities) Rules 2019, GN No. 287; The Electricity (Electrical Installation Services) Rules, 2019, GN No. 382; The Electricity (Supply Services) Rules 2019, GN No. 387.

Others are the Electricity (Procurement of Power Projects and Approval of Power Purchase Agreement) Rules 2019, GN No. 453; The Electricity (Development of Small Power Projects) Rules 2019, GN No. 462; and The Electricity (Standardized Small Power Projects Tariff ) Order 2019, GN. No. 464.

In executing the requirement of sections 5 and 8 of the Electricity Act, 662 licences were issued of which eight (8) were electricity generation licences and 654 were electrical installation licences.

As of 30th June 2019, the installed capacity was 1,602.71MW of which 1,565.72MW was for main grid and 36.812MW was for off -grids. However, this capacity does not include own use generation.

Maximum Demand for the main grid, during the year under review, was 1,116.58MW as recorded on 30th November 2018 while the generation mix consisted of natural gas 67.5 per cent, hydropower 32.3 per cent, liquid fuel (HFO/IDO/GO) 0.1 per cent and biomass 0.2 per cent.

There were twelve entities licenced to conduct electricity activities for sale. TANESCO was engaged in electricity generation, transmission, distribution, supply and cross border trade activities;

Songas Tanzania Limited, Mwenga Hydropower Limited (MHL), Tanzania Wattle Company (TANWAT), Tanganyika Planting Company Limited (TPC), Andoya Hydro Electric Power Company Limited (AHEPO), Tulila Hydroelectric Power Company Limited, Yovi Hydropower Company Limited,

Darakuta Hydropower Development Company Limited and Matembwe Village Company Limited were engaged in electricity generation activities; while Mwenga Power Services Limited as well as Andoya Hydro Electric Power Company (AHEPO) were engaged in electricity distribution activities.

The transmission network comprised of 5,896km of which 543km was for 66kV; 1,673km for 132kV; 3,011km for 220kV; and 670km for 400kV.

The distribution network comprised of 109,663.34km of which 109,225.6km was for TANESCO, 414km for Mwenga Power Services Limited and 23.74km for Andoya Hydro Electric Power Company Limited.

Expansion of the distribution network has increased by 5 per cent for TANESCO, Mwenga 15 per cent, and Andoya 1 per cent.

The increase has been attributed to support from the Government, TANESCO, EWURA, development partners, private sectors, and Rural Energy Agency (REA), among others.

The electricity energy losses for TANESCO were 16.23 per cent of which 5.87 per cent was for transmission system and 10.36 per cent for distribution system. Mwenga Power Services limited has a distribution loss of 4.24 per cent and Andoya 5.75 per cent.

Financial performance analysed revenue generation, collection efficiency, profitability and cost per unit sold for six utilities; TANESCO, Andoya, Mwenga Power Services, Songas, Mwenga Hydro and Tulila Hydro. With exception of TANESCO whose total revenue and cost per unit sold slightly decreased, all utilities reported increases in total revenue and cost per unit sold.

Further, despite the fact that there was decrease in collection efficiency of utilities, Mwenga Hydro and Tulila recorded an improvement.

Furthermore, distribution utilities incurred loss while generation utilities earned profit.

However, despite all those achievements there were some challenges faced during the period under review which included low power reliability caused by inadequately maintained power infrastructure; and low private sector participation.

In order to address these challenges, the Authority has promised to continue intensifying various regulatory interventions, including regulatory tools development, awareness campaigns, monitoring and inspections.



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