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(EWURA) the Tanzania Electricity Grid Code 1 of 8 Code Documents

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(EWURA) the Tanzania Electricity Grid Code 1 of 8 Code Documents ENERGY AND WATER UTILITIES REGULATORY AUTHORITY (EWURA) The Tanzania Electricity Grid Code 1 of 8 Code Documents - Preamble Version 2 1st March 2017 Table of Contents 1 Introduction............................................................................................................................................3 2 Policy .......................................................................................................................................................3 2.1 Electricity Industry Structure ...................................................................................................................3 2.2 Electricity Industry Reform......................................................................................................................4 3 Authority.................................................................................................................................................4 3.1 Legislation................................................................................................................................................4 3.2 Multiple Licenses .....................................................................................................................................5 3.3 Applicability.............................................................................................................................................5 4 Grid Code................................................................................................................................................5 4.1 Definition .................................................................................................................................................5 4.2 Objectives.................................................................................................................................................6 4.3 Grid Code Overview ................................................................................................................................6 5 Definitions and Acronyms .....................................................................................................................8 5.1 Definitions................................................................................................................................................8 5.2 Acronyms ...............................................................................................................................................15 6 Notices and domicile ............................................................................................................................17 7 Acknowledgement ................................................................................................................................18 8 References .............................................................................................................................................18 The Tanzanian Grid Code – Preamble (Version 2 – 1st March 2017) Page 2 of 18 1 Introduction (1) The preamble provides the context for the Grid Code and its various sub-sections. It also contains detailed definitions and acronyms of the terms used in the Grid Code documents. 2 Policy 2.1 Electricity Industry Structure (1) The current structure of the power sector in Tanzania is illustrated in Figure 1 below. FIGURE 1: TANZANIA POWER SECTOR STRUCTURE (2) The Ministry of Energy and Minerals (MEM) oversees the power sector direction, and appoints TANESCO’s Board of Directors. The Energy and Water Utilities Regulatory Authority (EWURA or the Authority) is an autonomous multi-sectoral regulatory authority. It is responsible for technical and economic regulation of, among others, the electricity sector. (3) The Tanzania Electric Supply Company Limited (TANESCO) is a state owned, vertically integrated company carrying out generation, transmission and distribution. Under the current market structure, the System Operator is part of TANESCO Transmission. (4) Independent Power Producers (IPPs) are licensed to operate in the generation segment. In addition, interconnections with Zambia and Uganda enable imports of electricity. TANESCO Transmission acts as the single buyer for the purchases of this power. The Tanzanian Grid Code – Preamble (Version 2 – 1st March 2017) Page 3 of 18 (5) Tanzania electricity market is vertically integrated; TANESCO generates, imports and buys power in bulk from IPPs under a single buyer model and transports it over the transmission and distribution networks for resale to its customers. 2.2 Electricity Industry Reform (1) Tanzania will continue to pursue its ongoing reform programme for the power sector. (2) In the medium-term, reform plans for unbundling of TANESCO into separate generation, transmission, and distribution companies encompass the ring-fencing of separate business areas (internal restructuring) while retaining state-ownership. (3) In the long term, the plan ultimately envisages the evolution from a single buyer market structure, with long- term PPAs with TANESCO, to a wholesale power market, in which the producers sell directly (or through a pool or voluntary electricity exchange) to distribution companies. Under this future market structure, it is likely that the roles and relationships associated with Transmission and the System Operator may change and that the Grid Code will need to be updated to reflect this. (4) In order to ensure that the goals of the reform process are achieved, it is imperative that various arrangements are put in place that outline how the various parties in the electricity supply industry are expected to interact. The Tanzanian Grid Code represents one such arrangement with the aims of facilitating and governing open and non-discriminatory access to the transmission system, setting standards for reliable and stable operation of the interconnected system, technically and commercially. The Grid Code thus addresses the needs of the current market structure while taking cognisance of anticipated market reforms. 3 Authority 3.1 Legislation (1) The Grid Code derives its legal authority from the Electricity Act and from the Energy and Water Utilities Regulatory Authority (EWURA) Act. (2) In terms of Section 5 of the Electricity Act, the Authority shall have powers to: (a) award licenses to entities undertaking or seeking to undertake a licensed activity; (b) approve an enforce tariffs and fees charged by licensees; (c) approve licensees terms and conditions of electricity supply; and (d) approve initiations of the procurement of new electricity supply installations. (3) Sections 8(1) and (2) of the Electricity Act specify the following activities as requiring a license, unless the person or activity is exempted by the Authority: (a) Generation; (b) Transmission; (c) Distribution; (d) Supply; (e) System Operation; The Tanzanian Grid Code – Preamble (Version 2 – 1st March 2017) Page 4 of 18 (f) Cross-border electricity trade (g) Physical and financial trade in electricity; and (h) Electrical installation. (4) Furthermore, Section of the 45(b) (v) of the EWURA Act states that the Authority may make Rules with respect to the operation and management of the transmission system to be known as the Grid Code. 3.2 Multiple Licenses (1) Several of the licenses identified above may be held by a single entity. The decision to grant multiple licenses to a single entity depends on the functions that the company must fulfil. (2) A transmission company may, for example, hold licenses for transmission, supply, system operation, cross- border electricity trade, physical and financial trade in electricity; and electrical installation. 3.3 Applicability (1) All licensees are required to comply with the provisions of the Act and approved codes and Regulations. Any breach could result in the suspension or withdrawal of the license or fine. (2) More specifically: (a) Section 17(2)(a) of the Electricity Act stipulates that a transmission licensee shall be required to comply with the Grid Code. (b) Section 20(3) of the Electricity Act stipulates that the System Operator shall abide by the Grid Code. (c) Section 21(2) of the Electricity Act stipulates that a distribution licensee shall, subject to conditions of licence and rules issued by the Authority comply with the applicable requirements of the Grid Code. (3) In terms of Section 18(1) of the Electricity Act, the Authority may grant exemptions to the licence conditions and code requirements. (4) Transmission-Connected Customers are required to comply with certain provisions of the Grid Code in order to give full effect to its objectives. (5) The Grid Code is applicable to all Grid Code Participants registered in accordance with the Grid Code Governance Code. 4 Grid Code 4.1 Definition (1) The term Grid Code is widely used to refer to a document (or set of documents) that legally establishes technical and other requirements for the connection to and use of an electrical system by parties other than the owning electric utility in a manner that ensures reliable, efficient, and safe operation. (2) The Electricity Act defines the Grid Code as the technical and procedural rules and standards issued by the Authority on transmission and system operation. The Tanzanian Grid Code – Preamble (Version 2 – 1st March 2017) Page 5 of 18 4.2 Objectives (1) The fundamental function of a Grid Code is to establish the rules and procedures that allow independent parties to use the power system and to permit the power system to be planned and
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