On 19th July 2024, Zambia enacted the Electricity (Open Access) Regulations, joiningmany other countries and jurisdictions across the world that have implementedopen markets in their electricity industries.

The adoption of an open access regime is a necessity for Zambia due to its current energychallenges and the urgent need for investment in the sector. It is anticipated that the openaccess regime will foster a competitive environment, attract private investment, enhanceefficiency, and ultimately improve electricity supply.

Before this, Zambia's generation and transmission were under the state-owned entity, ZESCOLtd., which controlled the majority of the transmission network.

The primary goal of the open access regime, anchored in the Electricity Act of 2019, is toempower independent power producers (IPPs) to generate and sell electricity directly toconsumers, bypassing ZESCO.

The Open Access Regulations offer detailed implementation guidelines and address criticaissues. These include, among others:

qualifying participants for open access include entities licensed by the Energy RegulationBoard (ERB) such as a trader of electricity with a trading capacity of at least 1 Mw, a supplierof electricity with an installed capacity of at least 1 MW, a system user and consumer ofelectricity with a consumption capacity of at least 1 MW;

he categories of open access are divided into long-term open access (for access for morethan five years), medium-term open access (for access for more than three months but lessthan five years), and short-term open access (for access of less than three months).

the application process, procedure and prescribed timelines for open access to thetransmission or distribution system are outlined;

the factors that a transmission network service provider or distribution network serviceprovider must consider, the key being the availability of capacity, before approving access tothe network;

the conditions for an open access user to trade in electricity, including the requirement toprovide financial security and to keep the system operator indemnified against all claimsarising from open access transactions.

The Open Access Regulations provide that access for an entity meeting electricity demand orensuring maintenance of security of supply within Zambia be given priority, followed by longterm open access, medium-term open access, and last short-term open access.

The functions of the system operator include assigning the responsibility of scheduling openaccess transactions and curtailing power to the system operator, The functions of the ERBinclude the power to approve charges for open access.

The system operator must develop and submit to the ERB for approval, guidelines andprocedures for the operation of a transmission system and distribution system within 180 daysfrom 20th July 2024. Further, the ERB must develop a clear pricing methodology to determineaccess fees.Editor/Zhao E