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Issues and options in the economic regulation of european network security

Jamasb, Tooraj and Nepal, Rabindra (2015). Issues and options in the economic regulation of european network security. Competition and Regulation in Network Industries,16(1):2-22.

Document type: Journal Article
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IRMA ID 81144320xPUB35
Title Issues and options in the economic regulation of european network security
Author Jamasb, Tooraj
Nepal, Rabindra
Journal Name Competition and Regulation in Network Industries
Publication Date 2015
Volume Number 16
Issue Number 1
ISSN 1783-5917   (check CDU catalogue open catalogue search in new window)
Scopus ID 2-s2.0-84926670138
Start Page 2
End Page 22
Total Pages 21
Place of Publication Belgium
Publisher Intersentia N.V.
HERDC Category C1 - Journal Article (DIISR)
Abstract Incentive regulation needs to adapt to the emerging changes in the operating environment of the electricity networks and take into account the security of these. This paper assesses the current issues and options in economic regulation of network security across the European electricity systems. An output-oriented incentive regulatory approach combines the efficiency promoting mechanisms in a revenue cap framework with output-based incentives such as better provision of network security. Thus, incentive regulation is destined to move from pursuing the optimal to being more practical. The RIIO regulatory framework in the UK and the service quality regulation in Italy provide good examples of application of output-based regulation. We also propose an output-based approach for regulation of network security, which accounts for the risks from natural, accidental and malicious threats. We conclude that regulation for network security may also require looking beyond economic network regulation and focus on the wider security policy and regulation interface considering the risks facing the electricity networks.
Keywords network security
exceptional events
incentive regulation
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Created: Tue, 26 Jul 2016, 12:35:25 CST