Incorporating short interruptions and time dependency of interruption costs in continuity of supply regulation

This paper describes the extended incentive based regulation on continuity of supply adopted in Norway as of 2009. The new interruption cost assessment methodology is described incorporating short interruptions and time dependency of interruption costs. Previous studies have shown that annual costs of short interruptions are in the same order as costs of long interruptions, and that the costs are highly time dependent on a weekly and daily basis. Technical and economic consequences of the extended regulation for the network companies are also described.