“Effective Energy Regulation”
Ing J.D. De Canha Director
Bureau of Telecommunications Post and Utilities Curacao, Dutch Caribbean March 29th 2012
* Durable 2012 Content 1.
How it all started 2. The energy policy 3. The market model 4. Regulations 5. Small scale renewables 6. Certification 7. Implementation
* Durable 2012 1. How it all started……. 1995: Bureau of Telecommunications was
established 1997: the task as regulator for Postal Services was assigned 2009: the task as regulator for Electricity, Water and Fuels was assigned 2012: the task as regulator for Health Care was assigned
* Durable 2012 2. Regulation follows policy In
2010 the market and regulatory analysis was done for the electricity sector resulting in draft overall policies February 16th 2011 the overall policy for Electricity was approved by the Government November 16th 2011, the policy for small scale renewable Electricity production followed The overall policy contains basis principles of regulations
* Durable 2012 2. Analysis of the Energy sector Analysis showed major issues, which required immediate action: High prices, low quality No renewable energy No energy savings No market orientation Consumer interests need attention
* Durable 2012 2. Principles of the new Policy Affordable
prices for households and business Reliable services Sustainable energy production, minimum of 25% in 2015 Switch from oil to natural gas for at least another 25%Energy savings first Market orientation for production (IPP’s) Introduction of feed-in and net-metering Consumer interest to be secured Independent regulatory body
* Durable 2012 2. Electricity market Electricity market is split up into the following two segments: 1) Utilities Segment: Electricity
Production Electricity Distribution (feed-in, transmission & distribution) Electricity Supply
2) Market Segment: Customers
consume 40% of the market demand Businesses consume 60% of the market demand
Regulations is set-up for these segments separately
;
* Durable 2012
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3. New Market Model needed Production, distribution and supply to be regulated separately; Multiple concessions for large scale production Exclusive concession for the distribution company; Supply will be part of the distribution concession for the time being; Introduction of small scale renewable production.
* Durable 2012 Production
3. New Market Model Distribution
Supply
PRODUCER 1: AQUALECTRA PRODUCER 2: RdK
NETWORK COMPANY
ELECTRICITY SUPPLIER
(AQUALECTRA)
(AQUALECTRA)
CUSTOMERS
PRODUCER 3: NU Capital PRODUCER 4: Tbd
OWN PRODUCTION UP TO 1MW
PRODUCER 5: Tbd
* Durable 2012 4. Regulation of Production Concession regime with strong focus on requirements and reliability of production; Concessions will be based on long term investments and guaranties including pricing; Concessions will include transition to sustainable energy and natural gas; First step is a formalization of existing situation via granting concessions to current producers; additional capacity after that. Small scale renewable electricity
* Durable 2012 4. Regulation of Distribution Natural monopoly, to be granted to stateowned company Aqualectra; Separate regulations on multiple subjects:
Production and quality of power; Availability of power and maintenance; Capacity planning and investments; Net balancing; Terms and conditions; Safety and security;
If eligible, large and small scale producers have to be connected to the network; Price regulations based on efficiency (LRIC)
* Durable 2012 4. Regulation of Supply No natural monopoly, for the time being granted to state-owned company Aqualectra; Consumer interests to be secured via requirements on:
Universal services, non-discrimination Terms and conditions Invoicing and debt collection Disconnection rules Complaints Prepaid services
Price regulations based on efficient operations
* Durable 2012 5. Small-Scale Renewables Small scale renewable electricity production allowed as of January 1st Households up to 10kW, companies up to 1MW; Net metering for households, production tariffs for companies.
Stimulation via tax regime (adjusted duty tariffs) and feed-in tariffs;
* Durable 2012 5. Principles for Feed-In Tariffs Cost
orientation with a reasonable payback period between 5 to 7 years No need for fossil fuel power generation in order to attain cost savings Net metering for residential customers (domestic rates, excess production at 0,40ANG/kWh in 2012)
Net
billing for businesses (at 0,42 ANG/kWh in 2012) Tariff procedure to determine and adjust tariffs over time
* Durable 2012 5. Quality of Small Scale Renewables Quality of installations needed for network stability International Solar and Wind standards Certified products only (IEC standards) Certified installers only; Inspection of installations before commissioning.
* Durable 2012 6. 1st Certification Class completed early 2012
Rules and Regulation
* Durable 2012 6. 1st Certification Class completed early 2012
Practical Training
* Durable 2012 6. Inspector Class completed early 2012
Inspector Training
The New Policy is just the beginning of the transition
* Durable 2012 7. Implementation has already started in 2012