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5th High-Level Meeting of Regional Associations of Emerging Markets
11 July 2017
|
Budapest, Hungary

Associations of regulators representing emerging economies met in Budapest on 11 July in the 5th High-Level Meeting of Regional Associations of Emerging Markets, an annual meeting organised this year by the Energy Regulators Regional Association (ERRA).

The meeting welcomed participants from 7 Associations representing developing markets from Africa, the Mediterranean, Latin America and Europe: African Forum for Utility Regulators (AFUR), Association of Latin-American Energy Regulators (ARIAE), ECOWAS Regional Electricity Regulatory Authority (ERERA), Energy Regulators Regional Association (ERRA), Mediterranean Energy Regulators (MEDREG), Regional Association of Energy Regulators for Eastern and Southern Africa (RAERESA), Regional Electricity Regulators Association of Southern Africa (RERA).

Offering a high-level exchange platform to develop cooperation and exchange of experiences in several areas of energy regulation, this customary annual meeting marked a progression in the relations among participating Associations, which agreed on the final version of a Framework Document, to be officially signed by the parties during the 7th edition of the World Forum on Energy Regulation (WFER) VII in Cancun in March 2018. This high-level event also enabled the participating regional Associations to update their peers on their latest regulatory developments and priority areas and to debate on the challenges associated to their new competences and characteristics.

Energy Regulatory Regional Associations of Emerging Markets go one step further towards reinforced cooperation

The proposed agreement aims at consolidating and institutionalizing synergies among regulators of emerging markets, through transfer of knowledge and experience, sharing and establishing research documents and publications, joint support of the Parties’ events and activities such as the WFER.

The draft cooperation framework encourages and facilitates the sharing of the Parties’ specific areas of expertise and experience by unlocking and capitalizing on their respective complementarities, with a view of improving the attractiveness and stability of market conditions for energy investments, establishing stronger consumer protection measures and promoting universal access to sustainable energy.

MEDREG President reminded that MEDREG was a strong promoter of this cooperation framework document since the beginning and encouraged to deepen the coordination and cooperation among the networks of regulators of emerging markets. Mr. Santos underlined that the document is an agile and direct instrument to advance regulation in growing markets.

All the other Associations expressed their support to the agreement, which will be ratified by each Association before being signed at WFER. Most representatives stressed that the agreement should be a tool flexible enough to accommodate the diverse needs and international provisions of the different signatories.

In addition to the discussion on the cooperation agreement, the seven Associations updated their peers on their latest regulatory developments and priority areas before debating on the challenges associated to their new competences and characteristics.

 

Latest developments in regulators’ activities and priority areas of participating associations:

  • Several Associations stressed that they adopt a participatory and interactive approach to engage regional stakeholders in their member regulators’ activities, trying to facilitate the exchange between the world of regulation and those of utilities, industries and consumers.
  • The calculation of tariffs for transmission and distribution remains at the forefront of the agenda for emerging networks of regulators. Having a good rationale for tariffs is key to allow that their development is predictable, thus protecting consumers and utilities, and it also allows to save public money to invest in building grids in disadvantaged areas. With the use of pre-paid meters, consumers are then able to manage their consumption according to cost-reflective tariffs.  “People need access, not subsidies to consumption” declared the regulators.
  • Capacity building is key to increase the capacity of national regulators’ staff. Future topics for training are going to include reforms of the electricity sector, market rules and tariffs.
  • Some Associations include member regulators from different continents. While this is challenging, as regulatory models are sometimes very different, these diversified approaches to regulation also present a strong advantage. It exposes member regulators to a variety of possible solutions to current and future market issues as well as enhancing a common dialogue on how to establish shared and sustainable regulatory models.
  • Associations notice that where energy trade grows, rules that open the markets to competition tend to follow in order to ensure the sustainability of market development.
  • Some Associations are in the process of signing agreements with International Financial Institutions (IFIs) to reinforce their studies with data and information collected by IFIs, to make presentations that increase the capacity building of staff and to financially support some Associations’ projects.
  • Integrating different regulatory frameworks is also important to share resources equally among the population of the same region (access to sustainable energy).
  • Participants were informed that once the distributed generation in Mexico will be fully developed, technology will become an important factor for developing markets because it will help reducing energy costs and cutting energy subsidies.

 

New competences and characteristics of regulators

  • As part of the discussions on the new competences and characteristics of regulators, the associations indicated that the new technologies, the evolving market structures, off-grid solutions, penetration of distributed generation, “behind the meter” generation and energy storage had a strong impact on them. The extent to which regulators can and should adapt to these new technologies was questioned as well as whether the regulators are abreast with these new technologies, which require new type of skills and qualified staff. The organisations participating to the meeting concluded that international cooperation is crucial in overcoming this challenge.
  • Another challenged raised by the regulators was the difficulty to retain their qualified members of staff. As the possible solutions brought, they stated that regulators could convince staff to stay and not to move to the private sector and provide recognition and continuous training and capacity building, stressing that regulators needed to be innovative to keep their talents. Regulatory organisations are knowledge institutions and this knowledge has to be maintained. University programs and train-the-trainers type of programs were mentioned too as good means to retain the specialised members of staff.
  • A new characteristic shared was the increasing consumer focus of regulators and the evolution of prosumers. Sooner or later there will be no distinction between consumers and prosumers, stated the organisations.
  • Driving forces for the change have been summarized as follows: market and competition, smart solutions, efficiency and reduction of CO2 emissions.
  • There is a strong need for regulatory skills to ensure all the above e.g. appropriate tariff structures, incentives for efficiency and quality, clear and transparent market rules and surveillance.

 

The agenda of the meeting, list of participants, presentations of the event as well as the recent publications of the participating organisations are available on the ERRA website at:
http://erranet.org/single-event/5th-high-level-meeting-of-regional-associations-of-emerging-markets/

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