The Ministry of Energy has proceeded to implement the approved policy framework which supports an open Electricity Supply Industry (“open ESI”) that eliminates monopolistic tendencies.
The open ESI entails that neither ZESCO nor any other owner of Transmission or Distribution Infrastructure can claim exclusivity for their use as third parties will now be able to supply power across Zambia.
This move is intended to encourage participation of various players in the three key segments of the value chain, i.e. Generation, Transmission and Distribution and deliver the much needed efficiencies for the country. Wheeling charges in the new framework will be set by the Energy Regulation Board – ERB.
And ZESCO has since welcomed this competitive environment and the opportunity to prove that it can compete on a leveled playing field with the best competitors in the market.
According to information made available to the Zambian Business Times – ZBT, ZESCO Director for Strategy and Corporate Services Patrick Mwila said the future is brighter for the electricity trade if new entrants are free to setup a power plant, negotiate for direct supply with any willing consumer, negotiate for the wheeling of their power with owners of infrastructure on commercial terms across all transmission and distribution lines as long as capacity is available, and regardless of the ownership.
Mwila further stated that the agreement between ZESCO and Konkola Copper Mines – KCM is part of ZESCO’s long-term strategy of correcting imbalances in the power supply chain. He added that ZESCO is now in a position to compete for the supply of power directly to those mining consumers on the Copperbelt who are able and willing to enter into new commercial relationships.
“Supply to such consumers was previously the preserve of CEC, but with the lapse of the BSA, the consumers, ZESCO and CEC are free to buy and sell power from anywhere and supply to anyone as long as the terms are commercially competitive.
ZESCO also notes that under these circumstances, ZESCO’s traditional consumers may also be subject to competitive bids or solicitations from other potential suppliers, but we firmly support the new market framework and we are ready to prove that we can supply power more competitively than anyone else in the Southern African region,” He added.
Meanwhile, he said despite the company’s initial failure to finalize a new power supply agreement to replace the now expired BSA, ZESCO continues to make power available to CEC to allow it to continue supplying its consumers who have already contracted for power supply from CEC and to supply ZESCO’s existing consumers in the Copperbelt.
Mwila added that this is despite the fact that CEC continues to owe ZESCO millions of dollars in unpaid arrears under the recently expired Bulk Supply Agreement.
