NVE warns: Rewarding technology could lead to overinvestment in the power grid
Published
The Norwegian Water Resources and Energy Directorate (NVE) believes it may be a problem to reward investments in new technology through the revenue cap for grid companies. The revenue cap is the amount a grid company is allowed to earn to operate and develop the power grid. NVE believes the scheme could lead to more being invested than necessary.
According to NVE, such a reward could lead to overinvestment. This means that grid companies build or buy more technology than the grid actually needs. When investments exceed the need, costs can become higher, and this may affect the prices of electricity and grid tariffs.
NVE also believes that customers in the grid may not benefit from these investments. Therefore, the authorities should carefully consider how grid companies should be rewarded. The goal is for the investments to provide value for everyone who pays for the power grid.
The case shows an important debate in the energy sector in Norway. The authorities must find a balance between encouraging new technology and ensuring that customers do not pay for unnecessary investments. How the rules are designed will be important for both grid companies and those who use the power grid.
Sources: Energiteknikk
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