How does the cost efficiency of electricity distribution system operators in Belgium, the Netherlands, Portugal, Ireland and the United Kingdom compare over the period 2021-2025, and to what extent are differences in cost efficiency associated with differences in regulatory frameworks and energy-transition indicators?

Details

Supervisors

Agrell, Per Joakim

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

This thesiscompares the costefficiency of22 electricity distributionsystem operators(DSOs) in Belgium, the Netherlands, Portugal, Ireland, and the United Kingdom over the 2021–2025 period, and examines the extent to which differences in efficiency and two energy transition indicators- the smart meter penetration rate and decentralised generation capacity per connection point—are linked to differences in regulatory design. Cost efficiency is calculated using an input-oriented DEA model, with capital expenditures (CAPEX) and operating expenditures (OPEX) as inputs, and the number of connection points, network length, and energy supplied as outputs. To ensure the most realistic comparison possible, thedataareharmonised. Theresultingscoresaresubjectedtovariousanalysis: anoutlierdetection process to identify distribution system operators exerting excessive influence on the efficiency frontier, as well as the calculation of the Malmquist index, which distinguishes changes in efficiency from technological developments. The DEA test is followed by an econometric analysis testing the relationship between efficiency, transition indicators, and the intervention power index (IP). This second step is performed using a Tobit regression. It follows that the stringency of a regulatory model is not, on its own, a determinant of cost- efficiency and performancein terms of the energytransition. Other factors, notably national policy, must be taken into account. The relationship between cost-efficiency and the energy transition factor is negative. This is explained by the large investments made by DSOs to accommodate distributed generation.