Oslo Economics proposes model to even out network tariffs
Oslo Economics has on behalf of Energi Norge written a memo to NVE where we propose a model to even out network tariffs in Norway. The project was carried out in relation to the Norwegian government’s decision to examine how to even out network tariffs.
Oslo Economics recommend that a future model should use the former model used by NVE as a base (Utjevningsordningen). The former model is compatible with the current regulation of grid operators and is considered precise by NVE. The negative economic consequences will be limited if the model is targeted towards the areas with highest network tariffs.
In the memo we show that most of the variation in network tariffs is explained by a small number of grid operators with large costs. There are currently just two grid operators with a network cost per kWh above 50 øre. These two companies deliver about 0,07 percent of the total amount of delivered electricity in Norway. Thus, it should be possible to reduce the largest differences in network tariffs with a modest use of funds.