The Danish Income-Cap Regulation in the Power Supply Sector

Bent Ole Gram Mortensen*

*Kontaktforfatter

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Abstract

The break-even principle (a cost-based regulation approach) has been a fundamental principle for the price regulation of the Danish utilities for several decades. Following the liberalization of parts of the energy sector, this regulation has been supplemented with new instruments to regulate monopoly areas. This form of regulation was introduced in connec- tion with a new electricity supply regulation from 1999. The detailed design of the income-cap regula- tion has been left to the Minister responsible for the energy sector and the supervisory authority (currently the Danish Utility Regulator (DUR)). Income-cap regulation of power grids has given rise to several challenges. Thus, the specific design of the revenue framework has been changed several times. At the same time, however, some experience has been gained with the administrative handling of this form of regulation. Several cases have, in the absence of administrative courts in Denmark, been dealt with by the Danish Energy Board of Appeals (EBA). Since the introduction of revenue frameworks, the power (electricity) sector has changed. Furthermore, the sector must now adapt to the green transition, which will require capacity expansion at both trans- mission and distribution levels, or other measures to be taken to prevent bottlenecks in the system. In this article the income-cap experience will be discussed.

OriginalsprogEngelsk
TidsskriftEuropean Energy and Environmental Law Review
Vol/bind31
Udgave nummer2
Sider (fra-til)105-115
ISSN1879-3886
DOI
StatusUdgivet - 2022

Bibliografisk note

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© 2022, Kluwer Law International. All rights reserved.

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