Norwegian electricity distribution industry

electricity
The main objective of Ørjan Mydland ´s thesis is to improve the understanding of efficiency measures and methods, and to increase the knowledge of the market structure in the Norwegian electricity distribution industry. Photo: pxhere.com

26 November 2018 13:15

Norwegian electricity distribution industry

On Monday 10 December, Ørjan Mydland will hold a trial lecture on a prescribed topic and defend his thesis for the PhD degree at NHH.

ørjan mydland
Ørjan Mydland, PhD Candidate at the Department of Business and Management Science, NHH.

Prescribed topic for the trial lecture:

An Appropriate Regulatory Regime for Decentralized Energy Generation and Geographically Noncontiguous Networks

Trial lecture:

10:15 in Karl Borch Aud., NHH

Title of the thesis:

Essays on efficiency and economies of scope and scale in electricity networks

Summary:

The electricity market in Norway has undergone substantial changes in recent decades, which prompts the need for research on how the industry should be organized. In an indivisible electricity industry that, on the one side, consists of market-oriented competitive entities in production and power trading, and, on the other side, natural monopolies within transmission and distribution, it is of interest to perform cost analysis within the productivity and efficiency framework. The electricity industry is complex, owing to the fact that production and consumption must happen simultaneously. After the Energy Act of Norway came into force on January 1, 1991, only transmission and distribution remained regulated. The regulation of transmission and distribution serves to avoid the typical disadvantages arising from natural monopolies. Many countries have gone through the same or similar changes in their respective industries.

The main objective of this thesis is to improve the understanding of efficiency measures and methods, and to increase the knowledge of the market structure in the Norwegian electricity distribution industry.

In essay 1, "Economies of scale in Norwegian electricity distribution: A quantile regression approach", the researchers investigate scale economies to see if the structure of the industry affects the costs.

In essay 2, "Economies of Scope and Scale in the Norwegian Electricity Industry", they study scale and scope economies. Economies of scope measures the synergies of producing more than one output. In his third essay, "Lost economies of scope and potential merger gains in the Norwegian electricity industry", Mydland investigates the potential gains from merging the distribution companies in Norway. Both Essay 1 and Essay 2 state that there are economies of scale in the industry, meaning that the industry would benefit from increasing the size of the companies in terms of increased output.

The last essay, "Disentangling Costs of Persistent and Transient Technical Inefficiency and Input Misallocation: The Case of Norwegian Electricity Distribution Firms", focus on the fact that many efficiency studies neglect allocative efficiency, and only concentrate on technical efficiency. In addition, they also disentangle costs of persistent and transient inefficiency, and include determinants for both persistent and transient inefficiency.

Defense:

12:15 in Karl Borch Aud, NHH

Members of the evaluation committee:

Professor Jan Ubøe (leader of the committee), Department of Business and Management Science, NHH

Professor Anne Neumann, DIW Berlin/University of Potsdam

Professor David Saal, School of Business and Economics, Loughborough University

Supervisors:

Professor Mette Bjørndal (main supervisor), Department of Business and Management Science, NHH

Associate Professor Endre Bjørndal, Department of Business and Management Science, NHH

Professor Gudbrand Lien, Inland Norway University of Applied Sciences

The trial lecture and thesis defence will be open to the public. Copies of the thesis will be available from presse@nhh.no.