Investigation of the Robustness of the Swedish Network Performance Assessment Model

Abstract

The Swedish energy agency (STEM) has developed a regulatory model to supervise the revenues of the distribution system operators (DSO). The model is referred to as the network performance assessment model (NPAM). The NPAM calculates customer values for a fictive electrical distribution system, with a total cost referred to as the network performance assessment (NPA). The debiting rate for a DSO is defined by the quotient of the revenue and the NPA. If the debiting rate is higher than a certain value, the DSO is placed under review and could be forced to pay back revenue to customers. A lawsuit is currently in progress on this use of the NPAM. This paper shows results from a comprehensive sensitiveness study of the NPAM investigating the robustness of the model. The investigation shows that the model is not robust, since small stochastic variations in input data could lead to larger differences in the results than those from the model. For example, it is shown that a five-meter difference in the coordinates of the nodes in the reference system could result in a difference of 5 million Euros, i.e., approximately US $6.5 million. The understanding of weaknesses in the NPAM presented in this paper provides an important means for future developments of regulatory models in the world.Index Terms-Customer value, electrical distribution system, network performance assessment model (NPAM), outage cost, performance-based regulation, probability, redundancy, reference networks, regulatory model, robustness and reliability.

Benefits of reliability centred asset management

“…The impact from regulation and from other laws (e.g. customer compensation) has been studied which show on a significant impact on investments preferred [8]. For example, a recently performed description and evaluation [9] of the new Swedish tariff regulation (since 2012) shows that the method of evaluating the capital base has a large impact on asset management decisions (more than e.g.…”

Learning from experiences of the prior Swedish electrical distribution system regulation — Reference material when developing the future regulatory incentives

“…However, when no model was suitable enough according to SETM's requirements of customer focus and cost efficiently incentives, it was decided to develop a new model. The proposed regulation model meant a change in perspective from a company to a consumer focus [4]. As a result of this new customer perspective, the legislation was changed [5].…”

“…7. If all alternatives identified in step 3 and step 4 have been reviewed, go to step 9; else go to step 5. 8.…”

A Reference Network Model for Large-Scale Distribution Planning With Automatic Street Map Generation

“…Jamasb and Pollitt have compared the use of the NPAM model with frontier-based benchmarking methods for incentive regulation [17]. In [18], the robustness of that model is analyzed. In [19] and [20], a greenfield Reference Network Model named PECO was described.…”