Our work on network regulation and tariffs builds in particular on our economic and business expertise but increasingly requires us to integrate our understanding of technological developments into the analysis.
Our analyses range from theoretical work to quantitative modelling. The majority of our work relates to the power sector, although we also have long experience with regulatory issues related to gas and district heating. Questions related to monopoly regulation and the pricing of network services are also important in the transport sector, both because transport operators are becoming major power customers and because the emerging market models linked to the electrification of transport contain a mixture of monopolistic and competitive activities.
Our clients include public authorities, industry organisations and energy companies in Norway and the rest of the Nordics. We also see growing international interest in sharing experience and, in recent years, we have carried out projects in the UK, Germany and on behalf of the EU Commission in which network regulation and tariffs have been central issues.
Our services in this area include the following:
- Designing models of income regulation and incentive mechanisms that promote cost efficiency while providing the right incentives for investment and maintaining the security of supply.
- Specific regulations for system operators covering system operating costs and congestion income.
- The implications of the restructuring of the energy system for network income regulation.
- Regulation that facilitates sector coupling.
- The development and use of benchmarking methods.
- The design of incentive mechanisms related to the quality of supply and estimating the costs of outages.
- Assessments of the required rate of return and the regulatory weighted average cost of capital for network operations.
- Designing network tariffs that support demand flexibility.
- Designing network tariffs and concessioning processes to support the selection of the right location and technology for new generation capacity.
- Principles and methods for recouping network income requirements in the least distortionary way possible.
- Designing tariffs for special customer groups like power-intensive industry.