Source - Ei PM2023-01 Incitament Effektivt Nätutnyttjande (2023)

Document: Övervägda ändringar av befintliga incitament för kvalitet och effektivt nätutnyttjande i intäktsramsregleringen för elnätsföretag — Inför tillsynsperioden 2024–2027, Ei PM2023:01, Energimarknadsinspektionen, 2023. Authors: Maria Dalheim, Albin Emanuelsson, Linn Sjöström, Marie Swenman, Carl Johan Wallnerström. 36 pages.

Supplemented by: Beräkning av justerad utnyttjningsgrad, Ei 1000 v-1.1 version 3, updated 2025-08-25 (the operational methodology document implementing §3.9 of this PM).

Source type: Ei consultation promemoria (pre-decision) for RP4 (2024–2027) incentive design

Purpose

PM2023:01 documents Ei’s proposed changes to the two incentive mechanisms embedded in intäktsramsregleringen: (1) the incentive for efficient network use (effektivt nätutnyttjande) and (2) the quality incentive (leveranssäkerhet). The PM was circulated for stakeholder comments before RP4 decisions were finalized (deadline: February 2023; RP4 decisions issued by 31 October 2023).

Background: incentive structure

Swedish revenue cap regulation contains three incentive components that can increase or decrease a DSO’s allowed revenue (intäktsram) beyond the cost-based baseline:

Kvalitetsincitament — rewards/penalizes based on supply interruption frequency and duration vs. a norm
Nätförlustincitament — rewards/penalizes based on network loss share vs. a norm
Belastningsincitament — rewards/penalizes based on how evenly the DSO loads its connection to the overlying grid

Each incentive is capped at one-third of the DSO’s regulated return (regulatorisk avkastning) individually; the total of all three is also capped at one-third of regulated return. PM2023:01 proposes to implement these per-incentive caps before summation, to prevent one incentive from dominating the others.

Key change: medellastfaktorn → utnyttjningsgraden

The central reform in PM2023:01 is replacing the medellastfaktorn (mean load factor, Lf) with the utnyttjningsgraden (network utilization rate, Ug) as the indicator for the belastningsincitament for regional and local network operators.

Why the change

The medellastfaktorn measures load profile flatness across all hours of all days equally. This creates weak, diffuse incentives — a DSO that flattens a load on a mild autumn day gets the same credit as one that shaves a winter peak. Energiföretagen Sverige’s industry working group had proposed utnyttjningsgraden as an alternative in the earlier RP3 review; Ei lacked data then and instead required reporting of Ug from 2020 onward (EIFS 2022:10) to build the data base.

The utnyttjningsgrad formula

Ug = Pmedel / Pmax,4

Where:

Pmedel = mean of all daily average load values during the calendar year, measured at the grid connection point(s) to the overlying network (not at consumer connection points)
Pmax,4 = mean of the four highest daily peak load values during the calendar year

The metric excludes boundary points where the DSO is responsible for metering (typically upstream-connection measurement points). It covers only the flow at the interface with the overlying grid.

Key property: Ug specifically rewards reducing the highest few peaks relative to the annual average. A DSO whose customers shift demand from cold January evenings to off-peak periods improves Ug substantially; the same absolute shift on a mild spring day has negligible effect. This creates a tighter, more economically rational incentive: peak loads are what drive upstream capacity requirements.

The medellastfaktorn measured daily profile flatness (all hours within a day), while Ug measures annual peak behavior (four highest days vs. annual mean). The two indicators can point in opposite directions for the same DSO in the same year — Ei’s internal calculations across 21 DSOs confirmed this.

Incentive monetization

The belastningsincitament is priced against the DSO’s kostnad för överliggande och angränsande nät (subscription and connection costs to overlying networks). If a DSO improves its Ug relative to its norm level, it earns an addition to its intäktsram proportional to:

Incentive = (Ug_actual − Ug_norm) × pricing factor based on upstream subscription costs

Ei’s sample calculations across 18 local and 3 regional networks for 2016–2019 data show:

Typical magnitude: ±1% of the DSO’s intäktsram (before other incentive adjustments)
Regional networks occasionally exceed ±1% — they have higher upstream subscription cost shares
In absolute per-customer terms: 40–174 SEK/customer/year per 1% intäktsram movement for local networks (median: ~75 SEK/customer/year)
For regional networks: 11,834–49,047 SEK/customer (customers are predominantly industry and other networks)

For a local DSO with 100,000 customers and a 1% intäktsram movement: approximately 7.5 MSEK/year. This quantifies the financial stake DSOs have in managing peak loads at their upstream connection.

The flexibility implication: flexibility that reduces peak loads on the four highest-load days of the year directly improves Ug → earns an intäktsram addition. The value of such flexibility at the margin equals the marginal improvement in the incentive, priced at the upstream subscription cost. This is a distinct and additional value channel from direct cost pass-through of procurement costs.

The justerad utnyttjningsgrad

The problem with new renewables

New renewable production connections (wind farms, solar parks) create a systematic distortion in Ug:

Wind and solar reduce Pmedel (production during normal hours reduces net load from the overlying grid)
But they do not reduce Pmax,4 (peak loads occur on cold, still, dark winter days when wind and solar produce little)
Result: new renewable connections mechanically worsen the DSO’s Ug score even if load management is otherwise excellent

PM2023:01 §3.7–3.9 introduces the justerad utnyttjningsgrad (Ugjusterad) to address this.

The solution

DSOs that have connected new production facilities (production-only points, commissioned from 1 January 2022 onward — i.e., after the normperiod 2018–2021) may submit a Ugjusterad that excludes those production connection points from the Ug calculation. The Ug and Ugjusterad are both calculated; the higher of the two is used in the incentive settlement.

Eligible production points: exclusively production facilities — solar parks, wind farms — where the connection point serves no load. Explicitly excluded from eligibility: residential solar, housing association solar, farmers with mixed-use connection points. The rationale: Ei wants DSOs to retain an incentive to manage production that has mixed load/generation characteristics, so only pure-production points are shielded.

Reporting: submitted to Ei via KENT separately from the årsrapport. Deadline: 31 March 2028 (covering all four years of RP4 simultaneously). If not submitted, Ei uses the standard Ug from the årsrapport.

The 2025-08-25 update (version 3 of the methodology document) clarifies the calculation procedure and provides a worked example confirming unchanged substance from the original design.

Transmission network changes

PM2023:01 also proposes two changes specific to Svenska kraftnät (the sole Swedish transmission network operator):

Shortening the normperiod for transmissionsnätsföretag from 10 years to 7 years (to give structural changes faster effect)
Raising the lower threshold for unannounced interruptions in the quality incentive from 100 ms to 500 ms (to align with Elsäkerhetsverket’s fault disconnection standard and reduce administrative burden)

These are less relevant to distribution flexibility.

Industry reception

The DSO industry representatives in Ei’s external reference group (Energiföretagen, Ellevio, E.ON, Göteborg Energi, Vattenfall, and others) were positive toward the switch to utnyttjningsgraden. They noted that it creates a more practical link to flexibility tools and demand management (e.g. effektavgifter, demand response). They also flagged the temperature-dependence of Ug — colder years produce more extreme peaks — but Ei’s assessment was that a four-year norm period averages this out sufficiently.

Relevance to wiki topics

Ei: PM2023:01 is the decision rationale for two of the three incentive mechanisms that constitute the belastningsincitament and nätförlustincitament in RP4; the utnyttjningsgrads section of the Ei page should cite this
DSO Flexibility Valuation — Methods and Swedish Evidence: Channel 2 (utnyttjandegrad) in the valuation synthesis should incorporate the monetization data (±1%, 40–174 SEK/customer/year); the belastningsincitament provides a separate incentive channel beyond cost pass-through
Natural Monopoly: The Averch-Johnson effect (documented via Termicum) and the CAPEX bias interact with how the belastningsincitament is designed — a DSO that over-invests in grid also faces a Ug penalty if the investment doesn’t improve load flatness
Flexibility Market: DSOs with poor Ug scores have an additional financial driver to procure flexibility beyond the investment deferral case

Data gaps

The exact normvärde calibration for the belastningsincitament in RP4 — the PM uses 2016–2019 data for illustration; actual RP4 norm calculations use 2018–2021 normperiod data which Ei has not published in this form
Whether any DSO has materially changed its flexibility procurement strategy in response to the utnyttjningsgrad incentive, versus treating it as a side effect of investment decisions