Qual­i­ty reg­u­la­tion and the qual­i­ty el­e­ment

• Pillars of supply quality
• Third regulatory period (2019-2023)
• Second regulatory period (2014-2018)
• First regulatory period (2009-2013)
• Further information

Price, cost and revenue regulation, though necessary, must not compromise the security of energy supply. Rules designed to ensure the quality of supply are therefore a key element of the incentive-based regulatory regime. There is a fundamental risk that operators will achieve the required or potential cuts in revenue by not making the necessary investments. Or, in order to save costs, they will avoid what are actually necessary measures for maintaining or improving the quality of their supply. To counteract this, the EnWG and the ARegV include the introduction of quality regulation through a quality element.

Quality standards serve to secure long-term efficient and reliable operation of energy supply networks. (See section 18 ARegV.)
Under section 19(1) ARegV quality requirements can be made for network reliability and network performance. Network operators can receive additional allowance to their revenue caps if they exceed the requirements or have amounts deducted from their revenue caps if they fail to meet the requirements.

Quality requirements for network reliability have been in place since 2012, with individual amounts being added to or deducted from the revenue caps. All network operators throughout Germany are included in determining quality requirements in the standard procedure. The quality requirements are revised every two to three years.

You can find an overview of the proceedings for all quality elements since 2017 along with the corresponding file number (only for DSOs under the Bundesnetzagentur's responsibility that are participating in the standard procedure) here List of proceedings Quality element

Pillars of supply quality

Quality of supply can be divided into five properties:

Network reliability describes the capability of an energy supply network to transport energy from one network locality to another while complying with certain quality parameters.

Product quality is the technical quality of the electricity or gas product, ie the timescale of the voltage with electricity or the chemical composition of the gas while maintaining a certain pressure level.

Security of supply means technical security, ie the avoidance of damage to human beings or to facilities.

Service quality describes the relationship between the network operator and its customers. Service quality includes meeting deadlines and the quality of billing.

In Europe these four areas comprise the concept of supply quality.

In Germany, however, there is one additional pillar that is taken into account: network performance (in accordance with section 21 a(5) EnWG).
Network performance describes the ability of the energy supply network to satisfy demand for the transmission of energy.

Enhancing the quality element

The Bundesnetzagentur commissioned an expert report with the objective of fundamentally and scientifically examining the quality element already in place and developing options for its enhancement.

Suggestions and ideas for a possible Enhancement of quality regulation were prepared by the consulting consortium consisting of E-Bridge Consulting GmbH, the Centre for European Economic Research and FGH e.V. (Forschungsgemeinschaft für elektrische Anlagen und Stromwirtschaft) and presented in Bonn on 22 July 2019. It should be noted that the concept applied thus far for determining the quality elements can be confirmed and continued.

The result of the consulting consortium's study on enhancement is the January 2020 Expert report on designing a quality element

Third regulatory period (2019-2023)

Determinations

The quality elements with regard to network reliability for electricity for the years 2019-2020 are based on individual determinations that are published in the Decisions database.
The basis for data collection and the subsequent determination of the 2019-2020 quality elements is the general determination BK8-17/0011-A of 22 February 2018.

Determining quality standards

On the basis of the BK8-17/0011-A determination, the Bundesnetzagentur examined how to derive the indicator requirements (reference values) for the 2019-2020 quality element for network reliability.
The result of that study is the Report on determining the reference values for the 2019-2020 quality element that was published on 21 November 2018.

Second regulatory period (2014-2018)

Basis for the collection of data

The quality elements for electricity network reliability for the years 2014-2016 were established on the basis of the BK8-13/001 determination.
The basis for data collection and the subsequent determination of the 2017-2018 quality element for electricity network reliability is the BK8-15-001 determination.

Expert report

Consentec GmbH was commissioned by the Bundesnetzagentur to examine how to derive the indicator requirements (reference values) for the 2017-2018 quality element for electricity network reliability. The result of that study is the expert report on Determining the reference values for the 2017-2018 quality element  that was published on 22 February 2017.

First regulatory period (2009-2013)

Basis for the collection of data

Data collection used for determining the quality elements for electricity network reliability for the years 2012 and 2013 was conducted on the basis of the BK8-11/001 determination. The following Information on the Hinweise zur Zuordnung von Versorgungsunterbrechungen zum Störungsanlass „höhere Gewalt“ (pdf / 115 KB) was taken into account when data was collected.

The quality elements for electricity network reliability were calculated on the basis of the determination on the start of application, the design details and the BK8-11/002 procedure for determining the quality element.

Expert report

The ARegV included the introduction of quality regulation at the beginning or in the course of the first regulatory period. The Bundesnetzagentur commissioned the consulting consortium consisting of Consentec Consulting GmbH, FGH e.V. and Frontier Economics Limited to examine how to design quality regulation for electricity network reliability. The findings are the Expert report by "Consentec" on the design and integration of a quality element for electricity network reliability in the revenue cap  of 20 October 2010. (Here in the Abridged expert report by "Consentec" on the design and integration of a quality element for electricity network reliability in the revenue cap and with a Correction to Chapter 4 of the Expert report on the quality element .)

The Bundesnetzagentur subsequently drew up a concept for the implementation of quality regulation from the perspective of electricity network reliability as from 1 January 2012. It was presented to the economic sectors affected and is available here: Presentation from 15 December 2010 – "Consultation on designing the quality element"

The following document describes the key points of the quality element design for electricity network reliability as part of the incentive regulation.

Further information