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Efficiency Analysis of Energy Networks : An International Survey of Regulators


  • Brophy Haney, A.
  • Pollitt, M.G.


Incentive regulation for networks has been an important part of the reform agenda in a number of countries. As part of this regulatory process, incentives are put in place to improve the cost efficiency of network companies by rewarding good performance relative to a predefined benchmark. The techniques used to establish benchmarks are central to the efficiency improvements that are ultimately achieved. Much experience has been gained internationally in the application of benchmarking techniques and we now have a solid understanding of the main indicators of best practice. These include the use of frontier-based methods; a large and high quality dataset; panel data; and bootstrapping techniques. What we are lacking is a more complete understanding of the factors that influence choice of methods by regulators, i.e. characteristics that may encourage or discourage regulators to adopt best practice methods.

Suggested Citation

  • Brophy Haney, A. & Pollitt, M.G., 2009. "Efficiency Analysis of Energy Networks : An International Survey of Regulators," Cambridge Working Papers in Economics 0926, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0926

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    References listed on IDEAS

    1. Pollitt, M.G. & Stern, J., 2009. "Human Resource Constraints for Electricity Regulation in Developing Countries: Has Anything Changed?," Cambridge Working Papers in Economics 0914, Faculty of Economics, University of Cambridge.
    2. Hawdon, David, 2003. "Efficiency, performance and regulation of the international gas industry--a bootstrap DEA approach," Energy Policy, Elsevier, vol. 31(11), pages 1167-1178, September.
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    4. Paul L. Joskow, 2014. "Incentive Regulation in Theory and Practice: Electricity Distribution and Transmission Networks," NBER Chapters,in: Economic Regulation and Its Reform: What Have We Learned?, pages 291-344 National Bureau of Economic Research, Inc.
    5. Yu, William & Jamasb, Tooraj & Pollitt, Michael, 2009. "Does weather explain cost and quality performance? An analysis of UK electricity distribution companies," Energy Policy, Elsevier, vol. 37(11), pages 4177-4188, November.
    6. Giannakis, Dimitrios & Jamasb, Tooraj & Pollitt, Michael, 2005. "Benchmarking and incentive regulation of quality of service: an application to the UK electricity distribution networks," Energy Policy, Elsevier, vol. 33(17), pages 2256-2271, November.
    7. Mehdi Farsi & Aurelio Fetz & Massimo Filippini, 2007. "Benchmarking and Regulation in the Electricity Distribution Sector," CEPE Working paper series 07-54, CEPE Center for Energy Policy and Economics, ETH Zurich.
    8. Jamasb, Tooraj & Pollitt, Michael, 2007. "Incentive regulation of electricity distribution networks: Lessons of experience from Britain," Energy Policy, Elsevier, vol. 35(12), pages 6163-6187, December.
    9. Cook, Wade D. & Seiford, Larry M., 2009. "Data envelopment analysis (DEA) - Thirty years on," European Journal of Operational Research, Elsevier, vol. 192(1), pages 1-17, January.
    10. Preetum Domah & Pollitt, M.G. & Jon Stern, 2002. "Modelling the Costs of Electricity Regulation: Evidence of Human Resource Constraints in Developing Countries," Cambridge Working Papers in Economics 0229, Faculty of Economics, University of Cambridge.
    11. Michael G. Pollitt, 2008. "The Future of Electricity (and Gas) Regulation in a Low-carbon Policy World," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 63-94.
    12. Dani Rodrik, 2008. "Second-Best Institutions," American Economic Review, American Economic Association, vol. 98(2), pages 100-104, May.
    13. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    14. Jamasb, T. & Pollitt, M., 2000. "Benchmarking and regulation: international electricity experience," Utilities Policy, Elsevier, vol. 9(3), pages 107-130, September.
    15. Jamasb, Tooraj & Pollitt, Michael, 2003. "International benchmarking and regulation: an application to European electricity distribution utilities," Energy Policy, Elsevier, vol. 31(15), pages 1609-1622, December.
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    Electricity; Gas; Benchmarking; Efficiency analysis; Incentive regulation; Energy networks;

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