Assessing performance of a liberalized electricity sector based on regulation: The Zambian case

Since the 1990s, most countries around the world have liberalized their electricity sectors, as a way of improving efficiency in the electricity industry. In some cases, competition has been incorporated while in others the organization is fully dependent on regulation. Methods to assess efficiency of competitive electricity markets have been developed but there remains a need for liberalized electricity sectors based on regulation. In this paper, it is suggested that a method based on prices, with respect to an optimal solution obtained from an optimal power flow study, can be used for this purpose and to show how this can be done, Zambia is taken as a case study. Based on the study, it is concluded that despite liberalizing the Zambian electricity sector, the sector´s performance has not been good. It is therefore recommended that competition be incorporated instead of fully depending on regulation.