Basis 1: Revenue ceiling set by the NVE
The revenue ceiling is set annually by the Norwegian Water Resources and Energy Directorate (NVE based on the rules set out in the Norwegian Control Regulations. The NVE’s calculations are based on our actual (posted) costs for operating the power grid. This includes operating and maintenance costs, system operations costs, and depreciation and earnings on network capital.
Additionally, the NVE sets a cost norm based on how cost-effective we are. This norm is updated every year. If the NVE assesses the cost effectiveness to be less than 100 per cent, it will result in a deduction in the revenue ceiling. In recent years, the NVE has rated our efficiency at 100 per cent.
Basis 2: Statnett’s tariff model
The tariff model is structured by Statnett and based on the rules set out in the Norwegian Control Regulations. The NVE verifies that the model is in line with the regulations. The model describes how we distribute the revenue ceiling between the customers in the central grid, within the given framework.
When we determine the tariff, we distinguish between production and consumption.
- Power producers are tariffed based on the amount of power they deliver to the grid. The tariff rate for production is therefore given in øre/kWh. The tariff basis is “the average annual production for last 10 years”. EU regulations have set a ceiling on the feed-in tariff of EUR 1.2/MWh. Therefore, the tariff rate for power producers will remain the same from year to year regardless of whether our revenue ceiling increases.
- The consumption tariff is priced based on how much power consumers use during the peak load hour. The tariff rate for consumption is therefore given in NOK/kW. The peak load hour is the hour of the year where consumption is highest. The tariff basis for consumption is the average consumption during peak load for the last 5 years.The consumption tariff will increase as our revenue ceiling increases.
Large individual consumers (“High consumption”) and consumption that can be disconnected from the network (“Flexible consumption”) receive a reduced tariff.
Statnett has entered into partnership agreements with Energy Norway, Distriktsenergi, the Federation of Norwegian Industries and Norwegian Oil and Gas. These organisations represent everyone who uses the central grid.
The structure of the tariff model and the calculation of annual tariff rates will be presented to and discussed with the customer organisations before they are adopted by Statnett’s Board of Directors. Accordingly, Statnett has regular meetings with customer organisations, where we discuss the structure of and changes to the tariff.