Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240957 
Year of Publication: 
2020
Series/Report no.: 
EWI Working Paper No. 20/09
Publisher: 
Institute of Energy Economics at the University of Cologne (EWI), Cologne
Abstract: 
In this paper, we use a comprehensive and unique data set of financial, technical and structural characteristics of German distribution network operators from 2011 to 2017 to estimate both the transient and persistent cost efficiency of German distribution network operators. In addition, we analyze the effect of an increasing capacity of distributed generation from renewable energy sources on the total costs of distribution network operators. Our results indicate an average cost reduction potential of approximately 12 percent in the short term and approximately 18 percent in the long term for German electricity distribution network operators. Furthermore, we find that distributed generation from renewable energy sources is a significant cost driver in the production process of network operators. Our study thus contributes to the ongoing debate on incentive regulation and efficiency benchmarking in electricity distribution industries and provides valuable insights for policymakers and regulators.
Subjects: 
Electricity distribution
regulation
transient cost efficiency
persistent cost efficiency
distributed generation
stochastic frontier analysis
JEL: 
L23
D24
L51
L94
Document Type: 
Working Paper

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