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Training course Role and assessment of CAPEX in energy regulation

training course Role and assessment of Capital Expenditure in energy regulation

This training course explores the role and assessment of capital expenditure in energy regulation.

Capital expenditures in the energy infrastructure business is essential to ensure security of supply. Regulators and regulated companies apply investment appraisal techniques to assess investments to support their decision-making. The inclusion of capital costs in the allowed revenues recognizes the owner’s investment in the regulated company. Due to the capital-intensive nature of the energy infrastructure business, failure to allow a provision for adequate capital cost can pose a risk to discourage investment and may lead to reductions in quality levels and security of supply. On the other hand, including inefficient investment costs in the allowed revenue leads to high energy prices, distorted price signals and constrains the effective performance of the market. 

Course Content

This training course explains the regulatory approaches to include investments as part of the regulatory price control. Furthermore, appraisal techniques widely applied to assess the efficiency of investments to support decision-making will be a key part of this training course. It draws a special attention to the application of cost benefit analysis. Finally, it addresses the issues related to asset stranding from a regulatory point of view and it will guide participants step-by-step through the content:

  • Integration of captital expenditures in the price control
  • Methods for assessment of capital expenditure
  • Cost Benefit Analysis - role and application
  • Mathematical Techniques for Investment Decisions
  • Assets utilization, stranded assets and regulatory policy.

For each module, the conceptual concepts are firstly provided, followed by appropriate examples and practical exercises that guide the participants to understand the practical use of the methods for investment analysis and to support regulatory decision-making.

Your Benefits

Upon completion of the course, participants will:

  • understand the role and assessment of capital expenditure in energy regulation and the different techniques and methods that can be applied to support the assessment and decision-making process
  • become familiar with the investment appraisal techniques widely applied in the regulatory treatment of capital expenditure and the role of cost benefit analysis in this context
  • gain an understanding of drivers of low demand leading to declining asset utilization and possible asset stranding and potential regulatory policy to deal with asset stranding. 

The conceptual part of the training will be supported by comprehensive practical exercises throughout the course.

For Whom?

This training program is intended for everyone involved in regulated industry e.g. employees of regulated companies, investors, representatives of industry associations, staff of regulatory authorities, officials from policy making institutions.

Our Solution

This training is conducted by experienced and industry- wide well-known consultants of DNV GL with experience of conducting projects worldwide.

The objectives of the training program are to strengthen the existing and obtain new knowledge via the planned activities. The program applies adult style learning using interactive approach with group discussions and Q&A sessions. The training can be conducted both as classroom training and via online training facilities. The duration of the training is foreseen to be a 4-day classroom training or a 5-day online training but can be customized to meet your company and/or your employees’ needs.

Контакты:

Konstantin Petrov
Konstantin Petrov

Head of Section Policy & Regulation

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Duration:

4-day classroom or a 5-day online training (can be customized)

Course offer:

available on request

Capital expenditures in the energy infrastructure business is essential to ensure security of supply. Regulators and regulated companies apply investment appraisal techniques to assess investments to support their decision-making. The inclusion of capital costs in the allowed revenues recognizes the owner’s investment in the regulated company. Due to the capital-intensive nature of the energy infrastructure business, failure to allow a provision for adequate capital cost can pose a risk to discourage investment and may lead to reductions in quality levels and security of supply. On the other hand, including inefficient investment costs in the allowed revenue leads to high energy prices, distorted price signals and constrains the effective performance of the market. 

Course Content

This training course explains the regulatory approaches to include investments as part of the regulatory price control. Furthermore, appraisal techniques widely applied to assess the efficiency of investments to support decision-making will be a key part of this training course. It draws a special attention to the application of cost benefit analysis. Finally, it addresses the issues related to asset stranding from a regulatory point of view and it will guide participants step-by-step through the content:

  • Integration of captital expenditures in the price control
  • Methods for assessment of capital expenditure
  • Cost Benefit Analysis - role and application
  • Mathematical Techniques for Investment Decisions
  • Assets utilization, stranded assets and regulatory policy.

For each module, the conceptual concepts are firstly provided, followed by appropriate examples and practical exercises that guide the participants to understand the practical use of the methods for investment analysis and to support regulatory decision-making.

Your Benefits

Upon completion of the course, participants will:

  • understand the role and assessment of capital expenditure in energy regulation and the different techniques and methods that can be applied to support the assessment and decision-making process
  • become familiar with the investment appraisal techniques widely applied in the regulatory treatment of capital expenditure and the role of cost benefit analysis in this context
  • gain an understanding of drivers of low demand leading to declining asset utilization and possible asset stranding and potential regulatory policy to deal with asset stranding. 

The conceptual part of the training will be supported by comprehensive practical exercises throughout the course.

For Whom?

This training program is intended for everyone involved in regulated industry e.g. employees of regulated companies, investors, representatives of industry associations, staff of regulatory authorities, officials from policy making institutions.

Our Solution

This training is conducted by experienced and industry- wide well-known consultants of DNV GL with experience of conducting projects worldwide.

The objectives of the training program are to strengthen the existing and obtain new knowledge via the planned activities. The program applies adult style learning using interactive approach with group discussions and Q&A sessions. The training can be conducted both as classroom training and via online training facilities. The duration of the training is foreseen to be a 4-day classroom training or a 5-day online training but can be customized to meet your company and/or your employees’ needs.