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Analysing the economic performance of Swiss electricity distribution utilities
Distribution grids connect the end consumers (residential and commercial) to the electricity grid. There are around 630 distribution network operators in Switzerland. These are divided into limited companies, municipal operations, cooperatives, and public sector institutions. The electricity price paid by the Swiss consumers changes based on which distribution company they are connected to. The price consists of energy charges, transmission charges, taxes, and additional charges. The operational performance of the distribution company is often reflected within the prices that consumers pay. Swiss Federal Electricity Commission regulates the tariff charged to the customers. Electricity distribution is a natural monopoly business. Since Swiss electricity market is not completely liberalized, consumers cannot choose their electricity supplier and have to connect to the supplier who has network in the specified area.
Keywords: Electricity distribution, Productive efficiency, Economies of scale and density, Benchmarking
Since a large number of electricity distribution utility companies operate in Switzerland, it is important to analyse their performance by identifying a benchmark. Distribution companies also have heterogeneity in company formation structure (cooperatives, limited companies, etc.). Distribution grids can be characterized based on total area served, amount of energy supplied per year, amount of peak power supplied, number of connected customers, line length, distribution assets such as feeders, transformers, substations, etc. This data is publicly available for some of the distribution companies. Based on the available data, distribution companies can be grouped based on the characteristics, and their economic performance can be compared to analyse efficient economic operation; based on capital, operational, and labour cost as well as the weather conditions under which they operate. Economic indicators such as economies of scale and economies of density can be used for comparing the performance of different distribution companies. The cost of operation can be estimated using frontier cost functions.
The tasks of the project are:
- Exploring and collecting available data about distribution utility companies and reviewing literature about their economic performance
- Developing a frontier cost model for distribution companies
- Using clustering methods, classifying different distribution companies in groups having similar characteristics using the collected data
- Analysing economic performance of the companies using developed model and benchmarking the performance for each group of companies
REQUIREMENTS
- Knowledge of German language (data is mostly available in German)
- Knowledge of micro-economics
- Familiarity with programming
Since a large number of electricity distribution utility companies operate in Switzerland, it is important to analyse their performance by identifying a benchmark. Distribution companies also have heterogeneity in company formation structure (cooperatives, limited companies, etc.). Distribution grids can be characterized based on total area served, amount of energy supplied per year, amount of peak power supplied, number of connected customers, line length, distribution assets such as feeders, transformers, substations, etc. This data is publicly available for some of the distribution companies. Based on the available data, distribution companies can be grouped based on the characteristics, and their economic performance can be compared to analyse efficient economic operation; based on capital, operational, and labour cost as well as the weather conditions under which they operate. Economic indicators such as economies of scale and economies of density can be used for comparing the performance of different distribution companies. The cost of operation can be estimated using frontier cost functions.
The tasks of the project are:
- Exploring and collecting available data about distribution utility companies and reviewing literature about their economic performance
- Developing a frontier cost model for distribution companies
- Using clustering methods, classifying different distribution companies in groups having similar characteristics using the collected data
- Analysing economic performance of the companies using developed model and benchmarking the performance for each group of companies
REQUIREMENTS
- Knowledge of German language (data is mostly available in German)
- Knowledge of micro-economics
- Familiarity with programming
Not specified
ETH Zurich
Professor Russell McKenna
Chair of Energy Systems Analysis
CLT B13
Clausiusstrasse 33
8006 Zurich, Switzerland
Phone +41 (0) 44 632 26 71
info@esa.ethz.ch
www.esa.ethz.ch
ETH Zurich Professor Russell McKenna Chair of Energy Systems Analysis CLT B13 Clausiusstrasse 33 8006 Zurich, Switzerland