Incentive scheme for continuity of supply in the Swedish revenue cap regulation from 2020

Abstract

The national regulatory authority (NRA) for energy in Sweden, the Swedish Energy Markets Inspectorate (Ei), determines a revenue cap for each distribution system operator (DSO) and for the transmission system operator (TSO) for a regulatory period of four years at a time. The revenue cap is adjusted based on e.g. the performance regarding continuity of supply (CoS). Ei aims to continuously evaluate and improve the regulatory framework for DSOs and the TSO.This paper describes the CoS incentive scheme with extra focus on upcoming changes from next regulatory period 2020-2023. There are two more significant changes, new interruption cost parameters based on a recently published study and changed CoS indicators to consider the specific size of each customer (power weighted indicators). Furthermore, the legislation regarding interruptions ≥12 hours has been changed. The impact of all changes combined will be stronger incentives (higher rewards and penalties, while he average outcome still will be close to zero) and that the estimation of energy and power not supplied will be less approximative.Finally, the way of calculating the max reward or penalty allowed from this incentive scheme together with the incentive scheme for efficient utilization (described in a parallel CIRED paper) will also be changed.