New study: There is room to improve the efficiency in the Danish electricity distribution

New study: There is room to improve the efficiency in the Danish electricity distribution

April 13, 2015

Copenhagen Economics has, together with Professor Peter Bogetoft, conducted a study on the efficiency potential and future regulatory challenges in the Danish electricity distribution sector for El-reguleringsudvalget.

 

The Danish electricity distribution sector consists of 78 natural monopolies. The sector is governed by economic regulation; however, challenges in obtaining sufficient cost efficiency and consolidation remain.

 

The main conclusions are 

  • In the short term (2-4 years), the efficiency potential amounts to 200-400 mill. DKK.
  • In the long term (10-14 years), the efficiency potential amounts to 400-600 mill. DKK.
  • The sector will gain from more consolidation. There exists a consolidation potential of 100-400 mill. DKK which is additional to the short and long term potential.
  • In future regulation, smart solutions to handle changed supply/demand patterns should be treated similar to physical solutions.

Download the full report from the Danish Energy Agency’s website

For further information, please contact Partner Sigurd Næss-Schmidt