Qatar set to launch independent electricity regulator in 2014

by  — 14 January 2014

Qatar is laying the groundwork for the establishment of an independent electricity sector regulator, industry insiders have told The Edge, with the body set to begin work in 2014.

As demand for power in Doha and indeed all of Qatar is only set to increase in coming years, the need for an independent electricity regulator is imperative, says an industry researcher. (Image Corbis)

According to Glada Lahn, senior energy researcher at international think-tank Chatham House, plans to launch the independent regulator were presented to industry insiders – including Lahn – by senior Qatari officials earlier in 2013. 

Qatar government spokespeople did not confirm plans with The Edge at the time of going to press, but the establishment of an independent regulator would fit perfectly with Doha’s stated aim to develop its renewable energy potential.

The move is in line with plans first mapped out in Qatar’s most recent national development strategy, covering the period 2011 to 2016, which lists the establishment of an independent power sector regulator by 2014 as a key target.

“All countries will need private sector engagement in order to realise their renewable [energy] potential – the ideal being to create a competitive market and level playing field for providers,” Lahn said. “Establishing an independent electricity and cogeneration regulator is an absolute priority for creating the right investment environment.”

Vital integration

Independent regulators are viewed as vital by the private finance sector because they are intended to de-politicise any decision-making process that governs an industry. Even in a Gulf country with a system of governance such as Qatar, creation of an independent body would present the country as a safer destination for capital in the eyes of the international investment community.

The National Development Strategy (NDS) 2011 to 2016 suggests that any regulatory body covering electricity will also bear responsibility for the water industry, essentially bringing it in line with national electricity and water corporation Kahramaa.

“For conservation efforts in water and power to succeed, the government needs effective communications and stronger regulatory capacities,” the strategy states, “A key part of the robust demand management architecture will be the establishment of an independent regulator covering power and all aspects of water.”

The NDS makes provision for the fact that, under the existing system, which sees public works authority Ashghal also playing a role in water (see table), Qatar lacks the separation of the three functions of an infrastructure operator: policy-making, regulating and operating.

“Most of the risk for reduced service levels rises when one entity is providing a service, setting the required standards for its delivery and monitoring compliance with those standards,” it states. “The potential consequence of such an arrangement is reduced service quality for end-users and, possibly, lower service standards in some sectors.”

A separate section of the NDS continues, “By 2014 Qatar will have established an independent regulator to help accelerate reforms of the water sector. As desalinated water is coproduced with power, these new regulatory arrangements will be integrated with those for power.”

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