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Energy Laws and Regulations

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See below documents and links to Energy/ Power sector reform, laws and regulation:

General Materials

Materials discussing Power Purchase Agreements ("PPA"s)

Sample Laws and Regulations

I. Sample Laws

Australia

The Australian electricity market is governed by a relatively complex regime of regulatory instruments, and provides a good example of a more deregulated and market-oriented model of power sector regulation. The electricity networks on the Australia eastern seaboard are operated as a single market and principally regulated through:

Electricity is supplied and traded in a common, regulated market through a large number of private participants (e.g. generators and retailers) rather than through a centralized government monopoly. The national electricity regulatory regime addresses the following core subject matters: access to the electricity network, market operations, network security and planning, metering and dispute resolution. A separate regulator, Australian Energy Regulator ("AER"), is responsible for enforcement actions under the electricity laws, regulations and rules. While a third regulator, Australian Energy Market Operator ("AEMO") is responsible for operation of the electricity market.

Electricity networks along the western and northern seaboards of Australia are operated as separate markets with their separate regulatory regimes.

Brazil

Legislação Básica Do Setor Elétrico Brasileiro (pdf) (Basic Law of Brazilian Energy Sector) - This guide reviews relevant Energy Legislation in Brazil. It is a recent comprehensive document published by Brazil's National Energy Agency "Agência Nacional de Energia Elétrica – ANEEL" Published June 2010, in Portuguese.

China

In China, the legal environment for PPP energy projects has rapidly progressed. The legal framework is a sophisticated system with distinctive hierarchies.

There are national laws, ministerial regulations, guiding opinions, measures and procedures, local rules and regulations, self-regulation rules of the industry and internal governance rules for each of the state-owned power companies and grid companies. Interestingly, use is also made of the concept of 'trial' rules and procedures, whereby new concepts are introduced for stakeholder comment, before becoming fully effective. 

Egypt

Electricity Laws (in Arabic)

The Egyptian Electric Utility and Consumer Protection Regulatory Agency (“EgyptERA”) is an independent government agency established by law, empowered to regulate, supervise and develop electricity generation, consumption, transmission and distribution. Its website has links to production licenses, distribution licenses, and licenses for both production and distribution (in Arabic).

Jordan

Electricity Law (in Arabic and English) - This legislation is designed to foster the development of independent power producer (“IPP”) projects in Jordan, with a view to the eventual establishment of a competitive power market, subject to regulation by an independent Electricity Sector Regulatory Commission. This legislation was issued by the government in 2002 as a "Temporary Law", pending approval by the Jordanian Parliament. This approval has not yet been given, although the Parliament did debate the law in March 2008, before sending it to the Parliament's Energy Committee for further study. However, notwithstanding this “temporary” status, the law has been in full legal force since 2003, and it governs the operation of the power generation and distribution companies in Jordan, as well as the Jordanian Electricity Sector Regulatory Commission (“ERC”). The website of the Jordanian Ministry of Energy and Mineral Resources has links to other relevant laws and regulations.

Kenya

Kenya Energy Act 2019 - This Act provides for the establishment of energy sector entities and regulates the production, supply and use of energy. Additionally, it establishes the Energy and Petroleum Regulatory Authority ("EPRA") as the successor to the Energy Regulatory Commission (“ERC”). Like the ERC, the EPRA has explicit authority over imports and exports of electricity. It also has an expanded mandate that includes regulation of upstream petroleum and coal.  Relevant regulations for petroleum, electricity and renewable energy can also be found on EPRA’s website.

Laos PDR

The Lao power sector regulatory framework is characterized by the highly integrated level of state involvement in the production and supply chain. The primary state-owned utility Eletricité du Laos (or EDL), acts as the monopoly offtaker for the domestic market, as well as the operator of the transmission and distribution infrastructure and owner of the majority of the country’s generation capacity (although EDL’s stake in the generation sector has been partially privatized). The Electricity Law 1997 (as amended) is the principal legislation regulating the energy sector in Laos. Among other things, the Electricity Law sets out:

  • the requirement for an Electricity Development Plan (which sets out the long term strategy for developing the Laotian energy sector) to be prepared by Eletricité du Laos (the Laotian state owed electric power utility);

  • the regulatory requirements for electricity generation, transmission and distribution; and

  • the regulatory scheme for private investments into power projects (which requires a concession from the government).

The Electricity Law is supplemented by a number of policies promulgated by the regulator:

The Asia Development Bank has also published a roadmap which provides an overview of the regulatory landscape in the Laos energy sector.

Mozambique

Law No. 12/2022 on Electricity. This Law applies to the production, storage, transport, distribution, marketing and consumption of electricity, including its import and export and repeals Law No. 21/97 concerning production, transport, supply and sale of electric power, and creating the National Council for Electricity (“the 1997 Electricity Law”) (in Portuguese) – this Law establishes the governmental framework for electricity in Mozambique. 

Until May 2017, the Ministry of Mineral Resources and Energy (“MIREME”) was the governmental entity responsible for energy policy, planning and regulation.  However, the Parliament has since approved the creation of the Energy Regulatory Authority (“ARENE”) to regulate electricity tariffs, competition in the energy sector, licenses and concession contracts.  As well as taking over the regulatory functions of MIREME, ARENE replaced the Conselho Nacional de Electricidad (“CNELEC”), a consultative body with considerably narrower powers. 

Namibia

Government Electricity Act 2000 repealed by Electricity Act of 2007 as amended in 2016 (Net Metering Rules)– These Acts establish the Electricity Control Board (“ECB”).  The ECB’s core mandate is to exercise control over the electricity supply industry, regulate electricity generation, transmission, distribution, supply, import and export.  The ECB’s website has links to rules and regulations and licensing arrangements (including application procedure and licenses issued). 

Philippines

The Philippine power sector underwent significant privatization following the passage of the Electric Power Industry Reform Act of 2001 (“EPIRA”), which now provides the principal regulatory framework for the Philippine electricity industry. It provides a good example of a developing economy whose power sector has transitioned (in the relatively recent past) from a largely state-operated model to a market-oriented model. Among other things, the EPIRA:

  1. organizes the industry into four sectors – generation, transmission, distribution and supply – and sets out the way in which these sectors will be regulated;

  2. adds certain policymaking, planning and monitoring functions to the responsibilities of the Department of Energy (“DOE”);

  3. creates an independent, quasi-judicial regulatory body, the Energy Regulatory Commission (“ERC”), to promote competition, regulate market development and enforce the rules and regulations of the EPIRA;

  4. privatizes significant sections of the National Power Corporation’s business (a state owned utility which operated across the generation, transmission and distribution sectors);

  5. establishes the Wholesale Electricity Spot Market (“WESM”), regulated by an independent market operator; and

  6. promotes rural electrification.

The DOE has also developed a number of supplementary plans and policies, including:

The Asian Development Bank has also published a roadmap which provides an overview of the regulatory landscape in the Philippines energy sector.

Singapore

The Energy Market Authority is a statutory board under the Singaporean Ministry of Trade and Industry. Its main roles are to ensure a reliable and secure energy supply, promote effective competition in the energy market and develop a dynamic energy sector in Singapore. The Electricity Legislation and Regulations and Gas Legislation and Regulations can be found on its website.

Spain

Spain provides a good example of a developed civil law jurisdiction which has adopted a market-oriented approach to regulating of the power sector. The principal piece of legislation regulating the Spanish electricity sector is Law 24/2013, of 26 December, on the electricity sector (“Law 24/2013”).

The main purpose of Law 24/2013, pursuant to the objectives of European Directive 2009/72/EC  (repealed by Directive (EU) 2019/944) is to set out the principles and provisions governing the electricity sector, with the objective of:

  1. guaranteeing a minimum quality in the electricity supply at the lowest cost possible;

  2. ensuring the economic and financial sustainability of the electricity system; and

  3. fostering an effective level of competition in the electricity industry, all in accordance with environmental protection principles.

The principal features of the electricity system in Spain can be outlined as follows:

  • Generation is a liberalized activity developed by private operators who sell the electricity generated to the pool at market prices or to specific customers by means of bilateral agreements (Power Purchase Agreements or “PPAs”).

  • Market price is settled through daily and intra-daily auctions carried out in the wholesale / spot market.

  • System operation, market operation, transmission and distribution activities are regulated activities:

  • The National Commission for Markets and Competition ("CNMC") is the national regulatory authority of the Spanish energy markets according to Law 3/2013.

At State level, and apart from Law 24/2013, the main pieces of implementing legislation are:

  • Royal Decree 1955/2000, of 1 December, on regulation of transmission, distribution, commercialization, supply and authorization procedure for electricity facilities;

  • Royal Decree 2019/1997, of 26 December, organizing and regulating the electricity production market; and

  • Royal Decree 413/2014, of 6 June, on electricity generation by means of renewable, cogeneration and waste facilities.

Most Autonomous Communities have also passed legislation developing several issues of State legislation in relation to the authorization process in their territories.

South Africa

Electricity Regulation Act 2006 - An act to establish a national regulatory framework for the electricity supply industry; to make the National Energy Regulator NERSA the custodian and enforcer of the national electricity regulatory framework; to provide for licences and registration as the manner in which generation, transmission, distribution, trading and the import and export of electricity are regulated.

Tanzania

Electricity Act 2008 – This Act provides for the facilitation and regulation of generation, transmission, transformation, distribution, supply and use of electric energy; cross-border trade in electricity and the planning and regulation of rural electrification.

Additionally, the Act authorizes the Energy and Water Utilities Regulatory Authority (“EWURA”) to award licenses, approve and enforce tariffs and fees, approve licensees’ terms and conditions and approve initiation of the procurement of new electricity supply installations.

The section on regulation of rural electrification authorizes EWURA to:

  1. vary the nature of its regulation depending on the characteristics of the entity performing the electrification; and

  2. delegate regulatory responsibilities to other entities.

EWURA’s website includes links to other regulatory tools and information on licensing and registration.

In January 2020, Written Laws (Miscellaneous Amendments) No 1 Bill 2020 was presented to the Tanzanian Parliament. The Bill proposes that the Electricity Act 2008 shall be amended by establishing a Commissioner for Electricity Affairs who will be appointed by the President and advise the Minister of Energy on specified matters.

Uganda

Electricity Act 1999 (with later amendments)- An act to provide for the establishment of the Electricity Regulatory Authority; to provide for its functions, powers and administration; to provide for the generation, transmission, distribution, sale and use of electricity; to provide for the licensing and control of activities in the electricity sector; to provide for plant and equipment and for matters relating to safety; to liberalize and introduce competition in the electricity sector; to repeal the Electricity Act, Cap 135 and the Uganda Electricity Board (Special provisions) Act, Cap. 136; to provide for a successor Company to the Uganda Electricity Board, and for connected purposes. The Electricity Regulatory Authority Web site includes links to licenses and application forms as well as regulations and standards and a Uganda proforma power purchase agreement (PDF).

See also Uganda's PPP Act in relation to the power sector.

Vietnam

One of the key long-term objectives of the Vietnamese government in the power sector is to establish a competitive electricity market. Although this process is already underway, all segments of the sector (generation, transmission and distribution) continue to be dominated by the state utility Vietnam Electricity (EVN) and its subsidiaries. However, PPPs are playing an increasingly important role in introducing private sector participants into the power sector and creating a more competitive electricity market.

The Electricity Law of 2004 (as amended in 2012 and 2018) is the principal legislation regulating the electricity sector in Vietnam. Among other things, the Electricity Law sets out:

  1. the regulatory requirements for electricity development investment and planning;

  2. policies and measures to encourage and accelerate conservation in electricity generation, transmission, distribution and use;

  3. the electricity market including its principles, market participants, and market operation and control;

  4. the conditions and requirements for operating in the electrical sector; and

  5. pricing and licensing rules.

The Electricity Law is supplemented by a number of guiding decrees, decisions, and circulars issued by governmental authorities.

The Asia Development Bank has also published a roadmap which provides an overview of the regulatory landscape in the Vietnam energy sector.

Zambia

Energy Regulation Act 2019 – This Act repeals and replaces the previous Energy Regulation Act 1995. The Act provides for the licensing of enterprises in the energy sector and redefines the functions of the Energy Regulation Board.

While the Energy Regulation Board continues to have a role in issuing licenses and monitoring competition levels within the energy sector, pursuant to the 2019 Act, it will also have a role in monitoring the efficiency and performance of licensees; imposing administrative penalties when license conditions have been violated; and approving, reviewing and regulating power purchase and supply agreements.

The Energy Regulation Board website has links to a number of standards and guidelines, including other energy legislation, the Zambian Distribution Grid Code and Power Purchase and Supply Agreements Regulatory Review Guidelines.

II. Regulations

Regulation in Practice - Evaluation of Regulatory Systems

Regulatory systems often do not operate as planned because frequently there is a big gap between what is written in the law and what is implemented in practice. In situations where the regulatory system is not operating well, the World Bank often recommends independent and public evaluations of the system.

Such evaluations have now been performed several countries or regions (Mongolia, Brazil, the Eastern Caribbean and India). A roadmap for performing such evaluations can be found in the World Bank/ PPIAF Handbook For Evaluating Infrastructure Regulatory Systems (pdf)

Sample Evaluations:

USAID Evaluation of the Mongolian electricity regulator (2006) (pdf)

Evaluation of ANEEL, the Brazilian electricity regulator

Evaluation of the Jamaican regulatory system

Small Grid and Off-Grid Connected Renewable Generators

Please find below some useful documents and links:

Tanzania

Namibia

Bangladesh

Policy Guidelines for Small Power Plant in Private Sector (pdf)

Rural Electrification Funds

To generate solutions for rural electrification in Africa, an innovative program, the Africa Electrification Initiative (AEI), seeks to create and sustain a living body of practical knowledge and a network of practitioners in the area of design and implementation of rural, peri-urban and urban on-grid and off-grid electrification programs. Find sample practical operational documents from around the globe and more here.

Theft of Electricity / Non-Technical Losses

Perhaps one of the greatest challenges in successfully operating a PPP related to utility services is to effectively deal with “non-technical losses” – a euphemism for theft – of utility services. These are due primarily to illegal connections to existing networks, tampering or bypassing with metering equipment or refusal to pay for service. Depending on the sector and the country, the rate of non technical losses can be over 50% of output, which causes a significant challenge to the viability of a PPP project and hinders development of infrastructure to extend services to under-served areas and improve services to existing customers. Find legislation and practical measures here.

Useful Links

Click on the links below to find legislation, regulations, regulatory decisions for each of the following countries:

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