The study made by INFRAS and Polynomics, commissioned by the «Energy-efficient principles» programme of the Federal Office of Energy E, analyses the effects of the network price regulation on energy efficiency theoretically as well as with the help of a model analysis . The results show that an incentive regulation instead of the current cost regulation is compatible with the objective of energy efficiency, because positive effects on the return of the company and on investment incentives may occur, if the share of variable price elements is increasing. A further regulatory intervention into pricing structures though leads to ambigous cost-effectiveness: the energy in demand can be reduced, but network efficiency and investment incentives for the assurance of the security of supply are compromised. In order to improve energy efficiency, first best solution would be an incentive tax that can be endorsed with tools for transparency. Before network price regulation can be used for the pursuit of energy efficiency objectives in a second best mix of instruments, in-depth clarifications with regard to cost effects caused by negative effects on network efficiency are needed.

Effect and potential of the network price regulation in order to boost energy efficiency

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