The Egyptian Electric Utility and Consumer Protection Regulatory Agency (EgyptERA) has requested from the European Bank for Reconstruction and Development (EBRD) to provide support and assistance in the selection of a consultant to review the regulatory framework and controls for the electricity production projects under the independent power producer (IPP) system.
The bank announced that companies and advisory offices have been invited to submit technical and financial bids for this task, at an estimated cost of €465,000. The winning company will be announced next month.
The bank specified the conditions for the selection of the company executing the consultancy work to have experience in the design of the electricity market, the economic regulation of electricity networks, licensing systems and energy purchase agreements, the legislative and regulatory framework, technical and administrative procedures related to networks.
The Ministry of Electricity formed a committee to prepare standards, controls, and rules governing the production of electricity from solar power plants and wind farms and selling them to consumers through the IPP scheme, with payment of fees to use the electrical network, while consumers have the freedom to obtain electricity from any company licensed to produce and sell energy.
The committee includes officials from the Egyptian Electricity Transmission Company, the Egyptian Electricity Holding Company, EgyptERA, the New and Renewable Energy Authority, and experts in the field of electricity and energy, including Mohamed Salah El Sobky, and representatives from the private sector such as Ahmed Zahran, CEO of KarmSolar, and Yassin Abdel Ghaffar, chairperson of Solaris.
The sources pointed out that the most prominent rules that are currently being discussed include the non-monopoly of any company over the production and sale activity, and that prices are negotiated between the executing companies and customers, providing the maximum and minimum energy selling values to consumers.
Sources at the ministry of electricity said that the rules and regulations that have been put in place include obtaining licenses to engage in the production and sale of electricity by EgyptERA. The licenses are specified in period and are reviewed annually.
According to the Electricity Law, each subscriber has the freedom to choose their own electricity supplier, and a true competitive market is based on free competition.
The sources said that the Electricity Law obliges opening the market to the private sector. The electricity sector after the application of IPP system will become competitive in price, due to the multiplicity of service providers, and the subscriber can change one company to another to get a better service.
The sources said that these measures are in the interest of subscribers because the consumer will be free to choose the service, and private companies compete with each other to provide better and cheaper service.