| Abstract: | Within the context of the German incentive regulation, several investment incentives for Distribution System Operators are discussed. The concrete design seems to be quite complex and certain trade-offs are inevitable. The time delay problem within the existing regulation can be better covered by an improved design of the network enlargement factor. Alternatively, simplified cost recognition schemes can be considered, but the extent to which they might improve cost efficiency must be analysed in more detail. Incentives can also be created by rate-of-return adders. A crucial problem with these adders is that their economic adequacy is often not clearly derived. Additional instruments, e.g. sliding scales for specific costs, which are not covered by the (potentially improved) instruments already available are also discussed. |
