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Most Sub-Saharan African countries try to promote rural
electrification through both centralized and decentralized
approaches. This guide focuses on the decentralized approach,
providing practical guidance on how small power producers and
mini-grid operators can deliver both electrification and renewable
energy in rural areas. It describes four basic types of on- and
off-grid small power producers, as well as several hybrid
combinations that are emerging in Africa and elsewhere. The guide
highlights the ground-level regulatory and policy questions that
must be answered by electricity regulators, rural energy agencies,
and ministries to promote commercially sustainable investments by
private operators and community organizations. Among the practical
questions addressed is how to design and implement retail tariffs,
quality of service standards, feed-in tariffs, and backup tariffs.
The guide also analyzes the regulatory implementation issues
triggered by donor grants and so-called top-up payments. It
provides a primer for nonengineers on interconnection and operating
standards for small power producers connected to main grids and
isolated mini-grids. It analyzes whether the option of small power
distributors, used widely in Asia, could be employed in Sub-Saharan
Africa, and addresses two often ignored questions: what to do when
the big grid connects to the little grid and how to practice
light-handed regulation. Finally, the guide considers the threshold
question of when to regulate and when to deregulate tariffs. All
these implementation issues are presented with specific
ground-level options and recommendations rather than just general
pronouncements. In addition, to make the discussion more useful to
practitioners, the guide provides numerous real-world examples of
successful and unsuccessful regulatory and policy actions taken in
Kenya, South Africa, and Tanzania, as well as Nepal, Sri Lanka, and
Thailand. Many of the decisions are inherently controversial
because they directly affect the economic interests of investors
and consumers. The guide highlights rather than hides these
real-world controversies by drawing upon candid comments of key
stakeholders national utility managers, mini-grid operators,
government officials, and and consumers."
Around the world, governments perform three main functions: they
tax, they spend, and they regulate. And of those three functions,
regulation is the least understood. The best way to avoid getting
stuck with poorly performing regulatory systems is to subject them
to ongoing and periodic reviews to make sure they are fully
functional and reflective of social and economic realities, and
help to achieve the government's objectives for the sector. This
handbook provides a road map for evaluating the strengths and
weaknesses of an existing system--a map that could lead to a shared
understanding of existing problems and to realistic and effective
recommendations for 'second-generation' regulatory reforms. It does
this by providing detailed guidance on how to perform systematic,
objective, and publicly available evaluations of existing
regulatory systems. It also presents practical advice on how to
develop recommendations for improving these systems. The handbook
will be of considerable value to government officials, regulators,
managers of regulated enterprises, and consumer representatives in
many developing and developed countries.
In many developing countries, both governments and investors have
expressed disappointment with the performance of recently
privatized electricity distribution companies. Some investors claim
that the design of the new regulatory system is fundamentally
flawed and recommend that independent regulatory commissions be
replaced or supplemented by more explicit "regulation by contract"
that would reduce the discretion of new commissions. This paper
examines whether regulation by contract or a combination of
regulation by contract and regulatory independence would provide a
better regulatory system for developing and transition economy
countries that wish to privatize distribution systems.
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