Document No 3:15 (2007–2008) The Office of the Auditor General’s investigation into the government administration’s use of policy instruments to ensure the safe and reliable transmission of electricity in the distribution grid was submitted to the Storting on 9 October 2008.
The investigation shows that roughly half the companies that have a licence to build and operate the distribution grid have installations that have faults or deficiencies that, from a technical point of view, should be remedied. There are most faults and deficiencies in overhead lines. There are large internal variations in terms of technical condition within some of the grid companies. Some grid stations in the distribution grid require total renewal.
Investments in the distribution grid are not sufficient to maintain the present technical standard. There is broad agreement in the Ministry of Petroleum and Energy and in the Norwegian Water Resources and Energy Directorate (NVE) that investments must be increased in the time ahead.
The investigation shows that there are several weaknesses in the government administration’s use of policy instruments in relation to the grid companies. The Office of the Auditor General is unsure whether the financial regulation of the grid companies contributes sufficiently increasing investments. Among other things, a third of the expert operations managers state that, only to a limited or very limited degree, does financial regulation stimulate adequate operation and development of the distribution grid.
There are also several weaknesses in the supervision and control of the grid companies. There is an unclear division of responsibility and understanding of roles between the Directorate for Civil Protection and Emergency Planning (DSB) and the Norwegian Water Resources and Energy Directorate (NVE). DSB has supervisory responsibility for ensuring that the installations do not represent a danger to life, health or material assets. NVE does not physically inspect the technical condition of the distribution grid itself, and it also makes little use of inspection reports from DSB. ‘Poor cooperation between the two directorates can result in a deterioration of the condition of the distribution grid without the energy authorities being aware of it,’ says Jørgen Kosmo.
The Ministry of Petroleum and Energy agrees that there are challenges relating to the division of responsibility and cooperation between DSB and NVE. The Ministry also agrees that there is uncertainty regarding how the individual grid companies adapt their operations to the financial instruments. However, the Ministry believes that there is little to indicate that the distribution grid is currently in poor condition. In the Ministry’s view, investments have been at an acceptable level so far.