Change of Electricity Distribution Industry: Drivers and Opening Business Opportunities
Immonen, Mika; Tahvanainen, Kaisa; Viljainen, Satu; Vilko, Jyri; Laaksonen, Petteri; Partanen, Jarmo (2009)
Immonen, Mika
Tahvanainen, Kaisa
Viljainen, Satu
Vilko, Jyri
Laaksonen, Petteri
Partanen, Jarmo
2009
Lappeenranta University of Technology, Technology Business Research Center Lappeenranta
Julkaisun pysyvä osoite on
https://urn.fi/URN:ISBN:978-952-214-703-5
https://urn.fi/URN:ISBN:978-952-214-703-5
Tiivistelmä
As a result of the recent regulatory amendments and other development
trends in the electricity distribution business, the sector is currently
witnessing radical restructuring that will eventually impact the business
logics of the sector. This report represents upcoming changes in the
electricity distribution industry and concentrates on the factors that are
expected to be the most fundamental ones.
Electricity network companies nowadays struggle with legislative and
regulatory requirements that focus on both the operational efficiency and
the reliability of electricity distribution networks. The forces that have an
impact on the distribution network companies can be put into three main
categories that define the transformation at a general level. Those are: (1)
a requirement for a more functional marketplace for energy, (2)
environmental aspects (combating climate change etc.), and (3) a
strongly emphasized requirement for the security of energy supply. The
first point arises from the legislators’ attempt to increase competition in
electricity retail markets, the second one concerns both environmental
protection and human safety issues, and the third one indicates societies’
reduced willingness to accept interruptions in electricity supply.
In the future, regulation of electricity distribution business may lower the
threshold for building more weather-resistant networks, which in turn
means increased underground cabling. This development pattern is
reinforced by tightening safety and environmental regulations that
ultimately make the overhead lines expensive to build and maintain. The
changes will require new approaches particularly in network planning,
construction, and maintenance. The concept for planning, constructing,
and maintaining cable networks is necessary because the
interdependencies between network operations are strong, in other
words, the nature of the operation requires a linkage to other operations.
trends in the electricity distribution business, the sector is currently
witnessing radical restructuring that will eventually impact the business
logics of the sector. This report represents upcoming changes in the
electricity distribution industry and concentrates on the factors that are
expected to be the most fundamental ones.
Electricity network companies nowadays struggle with legislative and
regulatory requirements that focus on both the operational efficiency and
the reliability of electricity distribution networks. The forces that have an
impact on the distribution network companies can be put into three main
categories that define the transformation at a general level. Those are: (1)
a requirement for a more functional marketplace for energy, (2)
environmental aspects (combating climate change etc.), and (3) a
strongly emphasized requirement for the security of energy supply. The
first point arises from the legislators’ attempt to increase competition in
electricity retail markets, the second one concerns both environmental
protection and human safety issues, and the third one indicates societies’
reduced willingness to accept interruptions in electricity supply.
In the future, regulation of electricity distribution business may lower the
threshold for building more weather-resistant networks, which in turn
means increased underground cabling. This development pattern is
reinforced by tightening safety and environmental regulations that
ultimately make the overhead lines expensive to build and maintain. The
changes will require new approaches particularly in network planning,
construction, and maintenance. The concept for planning, constructing,
and maintaining cable networks is necessary because the
interdependencies between network operations are strong, in other
words, the nature of the operation requires a linkage to other operations.