Copenhagen Economics has undertaken a study for a number of leading Danish utility companies and the Danish TSO with the aim of developing some key recommendations for how to develop the regulation of the sector. The study in particular discusses and documents that traditional revenue cap models based on backward looking data and methods are ill suited to prepare the sector for the future challenges from the green transformation of the energy sector and climate adaptation.
While recognising the steps taken in recent years to improve the regulatory framework, the study suggest that further steps could be taken. We underline (1) the need to adopt a forward-looking perspective to investment planning (2) more focus on customer and societal needs and (3) much more leeway for companies to implement the most efficient technical solutions to the challenges of the future.
It invites stakeholders, in particular regulators and utilities, to develop a roadmap of regulatory improvements going forward and use pilot projects to develop new models of regulation notably more dialog or agreement based forms of regulation.
The study is commissioned by Energinet, Radius Elnet, HOFOR and BIOFOS
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