Training Module on Electricity Market Regulation - SESSION 6

Session 6: Efficiency Assessments

Regulators use efficiency assessment to set the efficiency targets of the regulated service providers. This session explains the role of the efficiency assessment, the methods to measure efficiency and the incorporation of efficiency results in the price control.

• Why measure efficiency?
• Methods for efficiency assessments : Uni-dimensional ratio analysis / Statistical and econometric methods / Linear programming methods / Virtual network models
• Application of efficiency results o TOTEX versus OPEX benchmarking : Building block approach /  Cost controllability (short- and long-term) / Efficiency convergence speed / Capping efficiency scores / Using efficiency bands