German energy regulator issues recommendations on incentive regulation
The German energy regulator, Bundesnetzagentur, has published its recommendations for the implementation of incentive regulation for electricity and gas networks. The regulator proposes that the industry should go through two regulatory review periods during which revenue caps are applied before a transition to yardstick competition.
Frontier - in collaboration with Consentec - advised the Bundesnetzagentur on the possible use of analytical cost modelling to further inform the regulatory process. The regulator also took into account a separate report - commissioned by RWE Energy - in which Frontier explored alternative specifications of regulatory benchmarking models and the extent to which they could unfairly bias the regulatory settlement in favour of companies that operate at sub-optimal scale.
Druckansicht