Incentive scheme for efficient grid utilization 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 efficient grid utilization and continuity of supply. Ei aims to continuously evaluate and improve the regulatory framework for DSOs and the TSO.​This paper describes the efficient grid utilization incentive scheme with extra focus on upcoming changes from next regulatory period 2020-2023. This incentive scheme is divided into two parts: 1) reducing network losses and 2) reducing load flow peaks in connections to other grids (load). The most significant change about the first part (losses) is the introduction of a benchmarking method when calculating norm values taking the DSO’s individual objective conditions into consideration. The second part (load) has got a completely new structure, from comparing costs (that indirect partly depends on the load) to more directly comparing real achievements of the load. The indicator (average load factor) used to measure the load will remain the same but will evaluated further within the long-term development work at Ei.