Incentive Regulation of Electricity Distribution Networks: Lessons of Experience from Britain

This paper reviews the recent experience of the UK electricity distribution sector under incentive regulation. The UK has a significant and transparent history in implementing incentive regulation in the period since 1990. We demonstrate the successes of this period in reducing costs, prices and energy losses while maintaining quality of service. We also draw out the lessons for other countries in implementing distribution sector reform. We conclude by discussing the place of incentive regulation of networks within the wider reform context, the required legislative framework, the need for appropriate unbundling, the importance of quality of service incentives, the regulatory information requirements and the role of sector rationalisation.Electricity, liberalisation, regulation, benchmarking

Quality of Service, Efficiency, and Scale in Network Industries: An Analysis of European Electricity Distribution

Quality of service is of major economic significance in natural monopoly infrastructure industries and is increasingly addressed in regulatory schemes. However, this important aspect is generally not reflected in efficiency analysis of these industries. In this paper we present an efficiency analysis of electricity distribution networks using a sample of about 500 electricity distribution utilities from seven European countries. We apply the stochastic frontier analysis (SFA) method on multi-output translog input distance function models to estimate cost and scale efficiency with and without incorporating quality of service. We show that introducing the quality dimension into the analysis affects estimated efficiency significantly. In contrast to previous research, smaller utilities seem to indicate lower technical efficiency when incorporating quality. We also show that incorporating quality of service does not alter scale economy measures. Our results emphasise that quality of service should be an integrated part of efficiency analysis and incentive regulation regimes, as well as in the economic review of market concentration in regulated natural monopolies.efficiency, quality of service, scale economies, input distance function, stochastic frontier analysis

'Core Indicators for Determinants and Performance of Electricity Sector in Developing Countries’

Since the early 1990s, substantial resources and effort have been spent on implementing market-oriented electricity reform in developing countries. Important sectoral, economic, and social dimensions are involved in electricity reform, but empirical analysis and evaluation have been of limited use for testing the economic rationale of reform and policy advice. This may partly be attributed to a lack of generally accepted and measured indicators for monitoring progress, impact and performance, unlike areas such as health, education, environment, sustainable development. In this paper we propose a set of indicators as a first step towards filling this gap and developing a coherent framework for studying electricity reform in developing countries covering resource and institutional endowments, key reform steps, market structure, performance, and various impacts.Electricity, Reform, developing countries

Perceptions of Shared Power, Gender Conformity, and Marital Quality in Same- and Different-Sex Marriages

Marriage is a key institutional context for the study of gender and gender inequality. One way in which gender inequality is maintained in marriage is through gender norms, which are often upheld by hegemonic masculinity—the pattern of practices that legitimize men’s dominance over women. While studies have focused on how gender conformity (i.e., women embody femininity and men embody masculinity) affects different-sex unions, they have not considered how gender conformity might shape inequalities and marital quality within same-sex unions. Marriage is a key institutional context for the study of gender and gender inequality. This research brief, led by PRC postdoctoral fellow Amanda Pollitt, examines the relationships between gender conformity (i.e., women embody femininity and men embody masculinity), perceptions of shared power, and marital quality in same- and different-sex marriages.This research was supported, in part, by Grant R21AG044585 from the National Institute on Aging (PI, Debra Umberson); Grant P2CHD042849 awarded to the Population Research Center at The University of Texas at Austin by the Eunice Kennedy Shriver National Institute of Child Health and Human Development (NICHD); and Grant T32 HD007081, Training Program in Population Studies, awarded to the Population Research Center at The University of Texas at Austin by NICHD.Population Research Cente

Electricity reform in Chile: lessons for developing countries

Argentina was one of the first countries in the world to implement a comprehensivereform of its electricity sector in the recent period. Among developing countries onlyChile has had a comparably comprehensive and successful reform. This paper traces thehistory of the Argentine reform, which began in 1992, and assesses its progress and itslessons. We conclude that the reform was very successful prior to the collapse of theArgentine peso in early 2002. We suggest lessons for the generation, transmission anddistribution sectors, as well as the economic regulation of electricity and the generalinstitutional environment favourable to reform. We note that the achievements of thesector are now threatened by the delays in tackling the financial consequences of the peso devaluation

The role of policy in energy transitions: lessons from the energy liberalisation era

The aim of this paper is to discuss the period of energy privatisation and liberalisation which began in the 1980s within its wider historical context. The key issues are: what has been learned from this recent period, and; how significant is it in the light of an energy transition to low carbon energy system by 2050? Energy liberalisation has led to positive and globally widespread but modest efficiency gains but a lack of clearly visible direct benefits to households in many countries. It has significantly improved the governance of monopoly utilities (via independent regulators), the prospects for competition and innovation, and the quality of policy instruments for environmental emissions control (through the emergence of trading mechanisms). We conclude that it is not liberalisation per se that will determine the movement towards a low carbon energy transition, but the willingness of societies to bear the cost, which will be significant no matter what the extent of liberalisation

Lessons from the History of Independent System Operators in the Energy Sector, with applications to the Water Sector

This paper examines the lessons from independent transmission system operators in energy in the context of the potential introduction of an independent system operator in the water sector. A key lesson from the energy sector is that there is a basic choice between having an independent system operator (ISO) and an independent transmission system operator (ITSO) covering two or more existing company areas. ISOs do not own any wires or pipes, ITSOs do own wires or pipes. We begin by examining the nature of system operation arrangements in different countries, focussing on different ways that non-discriminatory access to monopoly transmission assets can be facilitated. We go on to discuss the particular functions of the ISO, focussing on the US, with regard to controlling the system and operating the power markets. We also detail the costs of system operation. Next, we focus on incentive issues and the governance of ISOs around the world. We outline an ideal model for an electricity system operator and examine the extent to which systems in the US and UK conform to the ideal. We also explore the issue of pricing access to the system and how system operation costs are paid for. Then, we look at the evolving role of system operators and how they might be evaluated. Finally we apply the learning from system operation in energy across to the UK water sector and offer some interim conclusions

‘Electricity Sector Reform in Developing Countries: A Survey of Empirical Evidence on Determinants and Performance’

This paper reviews the empirical evidence on electricity reform in developing countries. We find that country institutions and sector governance play an important role in success and failure of reform; reforms appear to have increased operating efficiency and expanded access to urban customers; they have to a lesser degree passed on efficiency gains to customers, tackled distributional effects, or improved rural access. Moreover, some of the literature is not methodologically robust or on a par with general development economics literature and findings on some issues are limited and inconclusive while some important areas are yet to be addressed. Until we know more, implementation of reforms will be more based on ideology and economic theory rather than solid economic evidence.Electricity, reform, developing countries

Impact perforation testing of stab-resistant armour materials

This paper describes the development of a method for the investigation and comparison of materials for use in stab resistant body armour. A number of polymer composite panels of different thicknesses and construction have been tested. A dynamic test which simulated the real threat has been used and the results compared to a simpler quasi-static test that might be used in initial materials selection. The materials tested were glass-epoxy, and glass-nylon composite panels of several thicknesses between 1.8 and 5.8mm. Additional tests were also performed on similar composites containing tungsten wires. An accelerated instrumented drop-tower was used to drive a knife through composite panels and record the force resisting penetration by the knife. The final penetration of the knife through the armour into a soft backing was also measured. For comparison,a similar geometry quasi-static test was carried out on the same specimens. It was found that energy absorbtion took the form of an initial resistance to perforation and then by a resistance to further penetration. This is thought to stem from resistance to cutting ofthe panel material and gripping of the knife blade. The energy required to produce a given penetration in dynamic tests was found to be in good agreement with the penetration achieved at similar energies under quasi-static conditions. For the materials tested there was no significant difference between the penetration resistance of single or two layer systems. The penetration achieved through a panel of a given material was approximately proportional to the inverse square of the panel's thickness. The relative performance of different armour materials was assessed by plotting the energy required to penetrate a fixed distance against the areal density of the panel

A Global Carbon Market?

This paper explores the prospects for a global carbon market as the centrepiece of any serious attempt to reach the ambitious goal for greenhouse gas (GHG) reductions set by climate scientists. My aim is to clarify the extent to which we know what policy might best support global decarbonisation. I begin by discussing what we might mean by a global carbon market and its theoretical properties. I proceed to discuss the EU Emissions Trading System experience and the recent experience with the Australian carbon tax. Next, I assess the evolving carbon market initiatives in the US and in China. In the conclusion, I apply some principles of 'good' energy policy making to the prospects for a successful global carbon market