C I R E D 18 th International Conference on Electricity Distribution Turin, 6-9 June 2005 QUALITY OF SUPPLY REGULATION IN NORWAY GOING BEYOND EN 50160 Helge Seljeseth , Kjell Sand, Knut Samdal SINTEF Energy Research, helge.seljeseth@sintef.no , kjell.sand@sintef.no , knut.samdal@sintef.no INTRODUCTION Regulation of quality of supply in its present form in Norway, has been introduced through a step-wise evolution. The most recent step is the introduction of a new set of regulations relating to the quality of supply in the Norwegian power system. The new Power Quality Directive (PQD) was put into force January 1 st 2005. The paper gives an overview of the new directive, its intentions and its content. The PQD includes new requirements for Power Quality (PQ) documentation, PQ information and PQ service as well as limits for certain voltage quality phenomena. The phenomena dealt with are mainly the same as defined in EN 50160. In the paper a comparison with EN 50160 is given, as the PQD goes further than the EN 50160 on some phenomena. BACKGROUND Deregulation of the electricity sector and the introduction of Performance-Based-Regulation regimes pose a challenge to assure efficient provision of quality of supply. When undertaking such a change, it must be kept in mind that this business is vital in the sense that almost all other businesses and economic activity relies on its continuous output. Deregulation can weaken operations and the economic incentives for required investments and maintenance. Only a slight decrease in regularity or quality of power supply can reduce and even cancel the benefits of deregulation – hence quality of supply regulation, environmental standards and safety standards are important aspects in the regulation of DSOs. The DSO regulation in Norway has largely being based on utilities costs. Both the early rate of return regulation and the present revenue cap regulation utilized utility costs as the basis for the regulation when entering a new five year regulatory period. Within the regulatory period utility costs and utility revenue are decoupled. A utility cost reduction will not affect the utilities allowed revenue. Hence, it is possible to generate short term profits by reducing utility operating costs which in turn might affect power quality and health, safety and environmental issues (HSE). HSE are mainly dealt with through direct regulation. Absence of explicit regulatory framework for assuring quality of supply can create incentives to reduce quality of supply to obtain (short term) profit. To counteract a possible negative development of power quality, the authorities for years have focused on these matters and the network companies in Norway are being increasingly subjected to regulatory regimes that explicitly take into account the quality of supply to the consumers. The new PQD is the latest development in this process that started in 1991. REGULATION OF QUALITY OF SUPPLY IN NORWAY Regulation of quality of supply in its present form in Norway, has been introduced through step-wise evolution as shown below: 1991 • A new Energy Act was put into force with, giving the authorities (NVE) the mandate to regulate power quality. • Results from a large interruption cost survey drawing attention to cost issues relating to power quality. 1995 • FASIT – a standardized system for reporting of failures and interruptions was introduced. The system is used for mandatory reporting of interruptions to NVE. • NVE requires interruption costs to be included in power system planning 1997 • Mandatory reporting of faults and disturbances in the 33 - 420 k networks. • Revenue cap regulation introduced, but with no specific incentives for power quality management of network 2000 • Standardized method for estimation of Energy Not Supplied (ENS) introduced • Mandatory reporting of ENS per customer category 2001 • Quality adjusted revenue caps introduced. Based on CENS – Costs of Energy Not Supplied. • Giving incentives to balance utility costs and customer interruption costs. 2003 • New interruption cost survey giving new and increased ENS cost rates 2005 • New power quality directive on quality of supply introduced CIRED2005 Session No 2