Independent System and Market Operator (ISMO) Expert Cities and Infrastructure for Growth Zambia (CIGZambia)

Cities and Infrastructure for Growth Zambia

Job Description:
CIGZambia – Technical Lead:
Support to Ministry of Energy and ZESCO in the formation of an Independent System and Market Operator

Cities and Infrastructure for Growth Zambia (CIGZambia):

CIGZambia is a technical assistance programme established in 2019 to support the objectives of the Government of the Republic of Zambia (‘GRZ’) in developing prosperous and resilient cities and infrastructure, addressing the challenges of climate change and enabling greater participation of women and youth as employees, consumers and entrepreneurs.

CIGZambia’s focus areas are demand driven based on consultations with relevant Ministries and Agencies of GRZ, and Terms of Reference are agreed to define the key activities, deliverables and outcomes of projects. The core team is based in Zambia’s capital Lusaka, and international and local experts are employed to meet client requirements with respect to specialist expertise and knowledge.

CIGZambia’s main focus has been the energy sector, which is undergoing significant transformation at the current time. Significant projects undertaken to date include:

Technical support to Ministry of Energy for the preparation of Zambia’s first Integrated Resources Plan (‘IRP’), a Cabinet approved plan that outlines the anticipated investments in the electricity sector through to 2050;
Technical support to ZESCO and ERB to facilitate Scaled Renewable Energy on the Zambian Grid through updating of Grid Codes and Grid Connection standards, and capacity building in undertaking dynamic studies on the stability of the Zambian Grid using power system modelling software;
Technical Support to ZESCO in developing and implementing its 10 Year Rolling Strategy and taking measures to restore financial sustainability.
CIGZambia continues to support the Ministry of Energy, ZESCO, ERB and the Rural Electrification Authority in various aspects of implementation of the IRP, including the establishment and curation of various systems and data sources that support energy planning in order to be the first port of call for GRZ when evidence-based analysis of energy sector issues is required to support Government decision making.

Context:

The electricity market in Zambia is undergoing a process of transformation to enable greater private sector participation at the level of both power producer and power off-taker. Zambia’s Integrated Resources Plan, approved by Cabinet in November 2023, has identified that 6,300 MW of new generation capacity should be connected to the Zambian Grid by the year 2030 in order to meet existing and new customers demand from the growth of Cities, and rapidly expanding mining, agriculture, transport and industrial sectors. A significant portion of this new generation capacity will come from variable renewable sources including solar and wind, with the balance from hydro, thermal, geothermal and bio-energy sources.

Zambia is undergoing a process of debt stabilisation having entered into a 38-month Extended Credit Facility Arrangement with the IMF in August 2022. This has restricted the extent to which the Zambian Government and its agencies, including ZESCO, are able to borrow to fund infrastructure projects, including projects in the Energy Sector. This has increased the urgency of securing private sources of financing to provide the require investments in the energy sector, with limited reliance on Government funding or guarantees.

The Electricity Act of 2019 established a framework of open access for the Zambian Grid, through which trading between large users and Independent Power Producers (IPPs) is encouraged, with ZESCO and other network providers providing access to their grids in exchange for payment through Use of System and System Services Agreements.

A Market Design project initiated by the Ministry of Energy and ERB has provided guidance as to how the market rules, regulations and trading arrangements should work going forward.

An essential element of the overall energy transition strategy in Zambia is the formation of an Independent System and Market Operator (‘ISMO’). The ISMO is currently embedded within ZESCO, albeit under a distinct licence separate from ZESCO’s other activities, and a direction has been given that the ISMO should be fully operational as a separate licensed and ring-fenced entity by December 2025. The successful completion of this process is intended to enhance the confidence of investors in the impartial operation of Zambia’s power system to provide un-biased access to the transmission network and transparency in relation to the operations of the Grid.

CIGZambia has agreed a Terms of Reference with the Ministry of Energy and ZESCO to provide technical support through the transition of the ISMO from being embedded within ZESCO to being a ringfenced independent Government owned entity. The scope of work will cover technical, financial, regulatory and legal aspects of the transition, as well as support in change management and the migration of systems. A significant emphasis will be placed on stakeholder engagement and communications to ensure that all relevant stakeholders are made aware of the proposed process and provide input where appropriate.

Contract Duration:

Duration: 1st September 2024 to 31st December 2025
Number of Days: 3 Days per week (average)
Key Activities:

The project will be undertaken in conjunction with the technical leadership team of CIGZambia. Key activities are envisaged as follows:

Assist in planning and convening a scoping workshop with relevant personnel at ZESCO and Ministry of Energy in September 2024
Provide guidance as to how ISMOs operate in developing and international markets in the areas of:
o Technical operations
o Systems (operational including dispatch, management information, financial settlement)
o Organisational structure and governance
o Risk management
o Regulatory oversight
o Ring fencing
o Duty of care
o Economic dispatch procedures
o Loss allocation
o System services (balancing energy, energy storage)
o Role in electricity sector planning
o Role in advising Government, Sector Players, Regulators, Other Stakeholders
o Role in interfacing with regional markets
o Role in addressing challenges of climate change
Prepare project plan for establishment of the ISMO in Zambia to become fully operational by December 2025
Plan and deliver various workshops and capacity building programmes addressing different workstreams of the implementation plan
Undertake assessment of existing technical systems and propose system enhancements and/or new systems that will be required for the ISMO to become fully functional
Provide guidance on the governance and organisational structure of the ISMO
Provide guidance as to the commercial services and mode of charging for the ISMO
Provide guidance as to the reports that the ISMO should make to Regulators, Government and Sector Players
Provide guidance as to the role of the ISMO with respect to national energy planning and energy security
Provide guidance as to the role of the ISMO in interfacing with SAPP and EAPP (when the interconnection with East Africa is constructed)
Develop a risk management framework for the ISMO
Key Experience – Local/ International Expert – ISO Implementation:

Post Graduate qualification in Power Systems Engineering (or equivalent discipline)
Experience of working with a power system operator in a managerial, technical or consulting capacity
Experience of power system regulation, and the regulatory aspects of the key segments of the electricity industry (generation, transmission, distribution, supply, power trading, system operations)
Knowledge of the income sources, costs, assets, management systems, policies, and risk management procedures of an electricity System Operator and/or Market Operator
Experience in written and verbal communication with technical experts and managerial staff in the power sector through consulting, project management, change management or similar activities
Proven project management and leadership skills
Knowledge of power systems in emerging markets an advantage
The position is open to both local and international experts. Location is flexible but if applicants are not based in Zambia, they will be required to travel to Zambia periodically for workshops and meetings.