Quality of supply regulation in Norway Frode Trengereid Norwegian water resources and energy directorate (NVE) Energy and regulation department
Outline NVE s responsibilities. Quality of supply regulation from 1991-2004. The CENS arrangement. The nation-wide customer survey in 2000-2002. Interruption statistics 1995-2002, some keyfigures. Additional regulations related to power quality. 2 May-03
NVE s main responsibilities NVE is a directorate under the Ministry of Petroleum end Energy and is responsible for the management of Norway s water and energy resources. One of NVE s main functions is to promote an efficient energy market and cost-effective energy system. the quality of supply in the transmission-/distribution networks is an important issue for NVE. 3 May-03
Electricity supply in Norway some key figures ~ 4,55 million inhabitants ~ 123 000 km (overhead and underground power cables <1-420kV>) ~ 115 TWh annual el. consumption (ex transmission losses ~ 10 TWh) ~ 20 GWh energy not supplied in 2002 (0,017 % with reference to delivered energy) ~ 150 network companies (mostly owned by municipalities). Third party access to the electricity marked since 1991. 4 May-03
Quality of supply regulation 1991: the energy act stated that socioeconomic optimization is the fundamental basis for network development and operation. 1997: a revenue cap regulation was introduced. Reduced costs => may in time result in a poor quality of supply. 5 May-03
Quality of supply regulation 2001: quality dependent revenue caps (the CENSarrangement) was introduced (an incentive based regulation of quality of supply) to counteract excessive cost reduction leading to poor quality 6 May-03
CENS - Cost of Energy Not Supplied. The main objective of the CENS-arrangement is to give the network owners incentives to plan, operate and maintain their networks in a socio-economic optimal way and thereby provide a socio-economic optimal level of reliability. The utilities internalizes the customers interruption costs. CENS includes interruptions > 3 minutes and ENS caused by capacity constraints in the transmission networks > 3 minutes. 7 May-03
Interruption costs and revenues Reduced revenues Increased revenues Expected interruption costs Actual interruption costs Actual interruption costs 8 May-03
Experiences after 2 years with CENS It has been some initial difficulties related to the mandatory reporting routines, communication between involved parties, understanding the set of rules and deciding who is responsible for the interruptions. The utilities are more attentive to the customers economic expenses as a result of energy not supplied, and they have changed their behaviour in relation to building, operating and maintaining their transmission- and distribution networks. The CENS-arrangement brings more attention to and clarifies the responsibilities in the grid. This is important to improve performance. 9 May-03
The nation-wide customer survey 2000-2002: Performed by: SINTEF Energy Research and Institute for Research in Economics and Business Administration (SNF) Main goal: To establish data for end-users costs associated with: Long interruptions > 3 min (notified/non notified). Short interruptions 3 min. Voltage disturbances (dips ++). Disconnection of loads/partial loads. General evaluation of the end-users perception of the current power quality level. 10 May-03
Specific interruption costs [ /kwh] CENS arrangement 2003-2007 Customer group Notified Non-notified 1.Industrial 2.Trade and service 3.Agricultural 4.Residential 5.Public service 6.Wood processing and energy-intensive industries 5,9 8,5 8,7 12,7 1,9 1,3 0,9 1,0 1,3 1,7 1,4 1,7 11 May-03
Comparison with other cost elements Costs of transmission losses Depreciation M &O cost CENS Short interruptions and dips Million in 2002 900 800 700 600 500 400 300 200 100 0 1994 1995 1996 1997 1998 1999 2000 2002 Annual costs of interruptions and dips are estimated 12 May-03
Interruption statistics The database in NVE consists of data from all of the 150 network companies, covering all Norwegian end-users. Collected data is related to: Long interruptions of voltage supply (> 3 minutes). Incident located in distribution and transmission networks with a voltage level > 1 kv. ENS caused by capacity constraints in the transmission networks. The data is crucial information to control that the utilities act in accordance with the energy legislation. The data recordings are referred medium or high-voltage end-user or distribution transformers (~118 000 delivery points) 13 May-03
0,050 % 0,045 % 0,040 % 0,035 % 0,030 % 0,025 % 0,020 % 0,015 % 0,010 % 0,005 % 0,000 % Energy not supplied referred to energy supplied 1995 1996 1997 1998 1999 2000 2001 2002 Due to notified interruptions Due to non notified interruptions Total 14 May-03
million 90 80 70 60 50 40 30 20 10 0 Cost of energy not supplied Business sector Residential/agricultural Total cost Customer group 2000 2001 2002 This figure is based on specific interruption costs from the survey in 1991 The CENS-arrangement was introduced in 2001 15 May-03
Additional regulation related to power quality Additional regulation solving problems not handled by CENS related to short interruptions, voltage quality issues, quality of service etc is necessary. this regulation will enter into force in 2004. Important issues: liability defining acceptable quality levels 16 May-03
Summing up The CENS arrangement has a positive effect on the network companies behaviour and attitude related to the customers interruption costs. There is a need for additional regulation dealing with other quality parameters than long interruptions. Future developments to extend the CENS arrangement is possible. 17 May-03