The latest report from Eurelectric has indicated that since the liberalisation of European electricity markets began, the distribution sector has been marked by restructuring. Distributors have broken away from their supplier functions in accordance with unbundling provisions and have found it difficult to meet their financing needs to maintain and develop their networks and have therefore turned to the market. The same reaction is observed in response to pressure on the part of regulators to reduce distribution costs. Distributors are therefore naturally driven to achieve optimal size. In short, Eurelectric is asking regulators to take all factors into account before setting rates and notably capital costs, i.e. the cost of the distribution system.
The Eurelectric report contains detailed information on the regulatory and operational conditions in 19 European countries in a bid to create a better understanding of the complexity of conditions and the different degrees of maturity of markets. The report also takes stock of changes in ownership and mergers that occurred in recent years and examines the methods used to calculate and revise distribution charges.
The report, ‘The Operating Environment for Distribution Companies’ can be downloaded free from www.eurelectric.org
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