ASIA AND PACIFIC / RECENT PROJECTS INCLUDE >

The Malaysian electricity regulator, Suruhanjaya Tenaga (ST), sought consulting advice to evaluate the effectiveness of its incentive based regulation mechanism and to review tariff submissions by TNB, the monopoly electricity utility in Peninsular Malaysia. ECA’s work included auditing TNB’s performance during the preceding three years, reviewing TNB’s submissions on future costs of service, developing a comprehensive revenue/tariff model, preparing new regulatory reporting standards and templates, developing key performance indicators, and drafting a new set of revenue/tariff regulations.

ECA worked as an integral part of the market design team of the Electricity Regulatory Authority of Vietnam on the transition to a wholesale competitive electricity market. The range of advice provided was wide-ranging including market design, reviews of draft rules and regulations, identifying accompanying industry restructuring requirements and developing capacity-building programmes for participants.

The objective of this assignment was to develop a framework to be used by the Government of Indonesia to improve urban water service provisions through efficient allocation of available sources of finance for the sector to appropriate investment or service improvement projects. The framework includes an incentive based investment grants that are accompanied by technical assistance and capacity building component. To support the framework, a self-assessment tool (SAT) for local governments and water utilities (PDAMs) was developed to measure baseline performance and monitor progress.

ECA examined the economic arguments for continuing with the existing locational methodology or switching to a postage-stamp methodology. Conducted quantitative analysis of the impacts of alternative methodologies on major individual gas shippers and users. Proposed suitable transition mechanisms to mitigate these impacts if a change in methodology was to be implemented.

ECA was responsible for drafting the Electricity Tariff Regulations which govern all on-grid tariffs. The regulations were prepared over a four-month period working intensively with the Ministry of Electric Power.

The project developed a new gas development master plan (GDMP) which serves as a guide to the necessary infrastructure investments required over the period to 2025. Given the uncertainty over supply sources and future prices and, hence, demand for gas, the project looked at a number of scenarios for the future market.

ECA led an international study to develop operating procedures and guidance note for developing countries and World Bank task team leaders on how to support public institutions in effectively engaging local private sector to deliver water and sanitation services, especially to the poor in rural growth centres and small towns. An in-depth case study of the domestic private sector participation in the Philippines was one of the major deliverables from this study.

ECA supported ERAV in its review of transmission pricing, including an assessment of current arrangements, recommendations on improvements drawing on international best practice and the calculation of new example transmission charges.

ECA analysed the impacts of changing tariff methodologies and assessed the appropriate wholesale and retail margins. This included financial modelling of the resulting revenues and prices and a comparison of outcomes under alternative methodologies.

ECA assisted the Bangladesh Rural Electrification Board in the application to rural electricity cooperatives of the tariff methodology issued by the Bangladesh Electricity Regulatory Commission. This included development of tariff models for all 80 cooperatives and their transfer to BREB along with recommendations on enhancements to the BERC methodology.

Electricite du Cambodge (EDC) wanted to investigate the potential viability of a 100 MW solar park project, to be developed as an IPP selling to EDC. ADB conducted a pre-feasibility study and subsequently supported EDC in moving to a full due diligence and design of the transaction. ECA was responsible for preliminary financial and the detailed economic analysis of the project in order to mobilise clean energy financing.

ECA was part of a team that drafted an energy ‘white paper’, identifying key energy sector policies and targets, as an input to the national five-year development plan 2020-24. The white paper covers all aspects of the value chain and provides an example of evidence-based policymaking to enhance future policy design.

This project, for the World Bank and Department of Energy, followed on from a previous assignment developing an institutional and regulatory framework for a large-scale SHS electrification programme within the Philippines. The programme will be delivered on a fee-for-service basis by rural electric cooperatives (ECs). The project involved the design of the regulated tariffs to apply to this service.

ECA advised on a natural gas pricing framework in which liquefied natural gas (LNG) is purchased at market-linked prices and can be recovered at some point in the electricity supply chain. This would enable the gas sector overall to potentially triple in size while moving from the previous differentiated gas prices to a more unified pricing structure compatible with a competitive power market.

ECA acted as expert witnessed in an arbitration case regarding the taxation of natural gas. The team’s role was to price intermediary gas competitively at various points between the offshore extraction point and onshore connection point and critique an existing netback valuation. The resulting intermediary competitive gas valuations were used to estimate tax liabilities of a major gas producer over the period 1990-2002.

On behalf of IFC, ECA prepared a step-by-step guide to investing in renewable electricity in the Pacific, focusing on Fiji, PNG, Solomon Islands, and Vanuatu. The guide included the current state of renewables, the potential for investment, regulatory barriers, and the specific steps for private sector investment.

Fiji passed a new Electricity Act, which directs the corporatisation of the electricity utility and the adoption of a more rigorous and transparent method of setting electricity tariffs. Through Asian Development Bank funding, ECA undertook a cost of service study that formed a key input to future tariff determinations. The study helped stakeholders understand the future costs of Energy Fiji Ltd (EFL) providing electricity on each of Fiji’s main islands, the costs of providing generation/transmission/distribution services, and the costs of serving different customer groups.

The project involved reviewing the long term electricity demand and price scenarios constructed by the client for their long term view of the Australian power market and planning for new investment. ECA reviewed the power market scenario model and also the investment evaluation model, as well as making detailed analyses and comments on the scenario outputs.

ECA created an enabling framework to enable and promote private sector participation in the delivery of core and social infrastructure services; and evaluated and prioritized projects suitable to be implemented as PPP projects.

ECA reviewed of the electricity market in Nepal with a particular focus on the arrangements necessary to allow Nepal to develop hydropower for export to India and Bangladesh.

ECA prepared an investment prospectus and implementation arrangements for the national electrification roll-out plan to PNG’s target of 70% access by 2030.

The Government of Fiji has asked ECA to undertake a review of the national energy policy and to recommend possible legislative changes to facilitate the future of the energy sector. This will entail improving reliability and access to energy supplies, to strengthen the regulatory framework in the energy sector and mainstreaming energy across sectors to develop a new energy policy framework.

ECA led the assignment to set up a utility regulator in the Kyrgyz Republic. Our team was responsible for drafting the work programme, regulations and procedures relating to funding requirements, complaint handling, stakeholder engagement in regulatory decision-making, licence fee regulations, public consultation procedures, complaint handling and performance incentives.

On behalf of Agency for the Regulation of Natural Monopolies (AREM), ECA reviewed the approaches to regulation of the power and heat sectors, plus the overall institutional and legal framework for the regulation of natural monopolies. This included an assessment of the effectiveness of the existing processes used and a comparison of methodologies applied against international best practice. The assessment was used to identify legal amendments and changes to the existing methodologies required to reduce regulatory risk and increase investor confidence.

The objective of the project was to assist Energy Regulatory Agency (ERA) in preparing a roadmap for the development of renewable energy in Mongolia. The roadmap set out the regulatory measures needed to develop renewables in Mongolia in an economic and affordable manner.

The project was one of several commissioned by DHI to review and improve the existing performance contracts between DHI, as the ‘owner’, and the management of major state-owned enterprises (SOEs).

ECA reviewed third party access models internationally, drafted a third party access code (based on the recommended model), developed accompanying pricing models, drafted a grid code and provided capacity building and training.

Energy Fiji Limited and European Investment Bank (EIB) sought assistance to prepare a plan for the development of the transmission network on Viti Levu, Fiji’s main island. ECA filled the roles of transmission planner and economic/financial expert, whom prepared a least cost development plan and then helped prepare tender documents for the identified priority projects.

We reviewed third party access models internationally, drafted a third party access code (based on the recommended model), developed accompanying pricing models, drafted a grid code and provided capacity building and training.

Jemena Gas Networks had to prepare its five-yearly price submission to the Australian Energy Regulator. ECA provided assistance with this, in particular in reviewing Jemena’s suite of regulatory models.

ECA reviewed competition in the postal sector, surveyed recent international experience, evaluated different regulatory options and drafted a new price monitoring framework.