Be the first to like this
One of the key regulatory changes as consequence of the liberalisation of the electricity industry has been the unbundling regime. This organisation model aims to separate the potentially competitive core activities from the natural monopoly distribution and transmission activities and other coordination activities like system and market operation.
Since then, European Directives oblige Member States to adopt unbundling requirements in the electricity sector. In particular since the European Commission proposed the option of full ownership unbundling for Transmission System Operators (TSO), there is some uncertainty around Distribution System Operators (DSO) unbundling.
In light of all this changes, this Master Thesis reviews the regulatory and legislative context for unbundling in Distribution System Operators, in both Europe and Spain.
Besides, identifies the current performance of distribution companies, mainly in terms of distributed power, customers served, market influence and compliance of unbundling requirements. Moreover, analyses how some particular countries have experienced the implementation of unbundling regime. All this experiences reveal a still clear insufficient level of Distribution System Operators unbundling and as a consequence a seriously limit on network operation effectiveness and market well-functioning.
In addition, a regulatory methodology is proposed for allowing Regulatory Authorities to monitor the unbundling process. This approach analyses the performance of current unbundling regime in the distribution business and provides regulatory changes when needed. A set of Key Performance Indicators (KPIs) and a benchmarking technique (DataEnvelopment Analysis-DEA) are the tools identified to measure the companies’ behaviour
towards their organisation model. These tools provide regulators an acknowledgement of the performance of Distribution System Operators and rank the companies according to efficiency ratios.
To test the robustness of the methodology designed, a case study is carried out. In particular, this practical survey aims to contribute to the discussion on current model of
unbundling in Spanish electricity distributors in comparison with other European distributors with both similar and different unbundling regimes. In this study, 10 Distribution System Operators, from 6 European Member States, are benchmarked by using DEA model. The results or technical efficiency scores rank distribution companies
according to efficient frontier firms. The main two findings rated Legal Unbundling DSOs slightly more efficient in terms of costs, and Ownership Unbundling DSOs remarkable more efficient in terms of market orientation.