Investment and efficiency in electricity networks
The distribution network is an important element of the power system that delivers electricity to the end-user. In the coming years a large amount of investment is envisioned in distribution system as these networks play a pivotal role in integration of renewable resources, demand side management and market competition, among other things. At the same time, network companies are regulated natural monopolies where their investment decisions are influenced by regulatory framework and intuitional constraints. There are various models of regulatory treatment of investment but the main objective of all is to ensure sufficiency and efficiency of investment. In this presentation with explore the relationship between investment and efficiency under incentive regulation with ex-post regulatory treatment of investment costs.