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Incentives for Efficiency in Grid Operations

In: Electricity Market Reform in Norway

Author

Listed:
  • Eivind Magnus

Abstract

In a country like Norway, grid activities from the high-voltage transmission grid down to the low-voltage distribution nets account for nearly 50 per cent of total capital investments, and represent a major share of operating costs. As these are natural monopolies, the challenge is how to avoid the abuse of monopoly power. Internationally, there are two main traditions for regulating natural monopolies such as electricity transportation. One is self-regulation based on public ownership; the other is income regulation of private companies implemented and organised by a central or regional regulator. The Norwegian model as it has been developed during the 1990s seeks to combine these two traditions — what we could term income regulation of public companies.

Suggested Citation

  • Eivind Magnus, 2000. "Incentives for Efficiency in Grid Operations," Palgrave Macmillan Books, in: Eivind Magnus & Atle Midttun (ed.), Electricity Market Reform in Norway, chapter 6, pages 121-138, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-333-98274-7_6
    DOI: 10.1057/9780333982747_6
    as

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