Incentive regulation considered for operator earnings formula

An incentive-based regulation that would gradually replace a cost-based model is being seriously considered for a formula determining earnings provided to the country’s operators.

The energy ministry and RAE, the Regulatory Authority for Energy, are examining changes to the regulatory framework concerning investments in the energy transmission and distribution networks, officials representing the two bodies have highlighted at the ongoing Thessaloniki International Fair.

Operator earnings include regulated earnings determined by WACC figures for projects.

Regulatory authorities around Europe typically permit higher and lower WACC rates that consider the time required to complete a project, or its cost. This is not so in Greece.

Incentives driven by specific targets or the achievement of specific results need to be offered by the regulatory authority, deputy energy minister Gerassimos Thomas told a forum titled “Energy Developments in the Country amid Structural Changes to the New Energy Model”, staged within the framework of the Thessaloniki International Fair.