What drives efficiency on the Portuguese gas distribution?

Abstract

The Portuguese natural gas sector is still growing, with a history of less than two decades. Consequently, the impact of regulatory reform is evidently recent. The aim of this paper is to assess the performance of the Portuguese gas distributors in order to define the efficiency targets for the regulatory period, 2010-2013. It also conducted further analysis in order to determine the best level of attainable operating costs by deriving the major costs driver of the Portuguese gas distributors. Therefore, the focus was on the deterministic frontier method, Data Envelopment Analysis (DEA) accounting for variable returns to scale (VRS). This technique allowed the computation of X-factors for each firm. The study suffered from data problems since the sector is very recent and the set of comparable companies is small. In order to avoid misspecifications or misinterpretations, firms were divided into three main groups with different scale factors and exogenous factors were also considered. The cross-section analysis was crossed with a dynamic one using panel data methodology.

Regulatory lag, efficiency, and performance. Lessons from a case study

“…Zoric et al (2011) performed an efficiency analysis for distributors in Slovenia, The Netherlands, and Great Britain in 2003, estimating OPEX (adjusted for PPP) from the number of customers, the volume of gas distributed, network length, and peak demand. Marques et al (2012), working for Portugal in the period 2008–2009, determined the OPEX efficiency from the number of consumers, the length of the network, and the volume of gas distributed.…”

A Nonparametric Economic Analysis of the US Natural Gas Transmission Infrastructure: Efficiency, Trade-Offs and Emerging Industry Configurations

“…The model is based on a robust optimization technique that may be an alternative to sensitivity analysis and stochastic programming. Marques et al [22] implemented DEA under the assumption of variable returns to scale to evaluate the efficiency of the Portuguese gas distributors to identify targets for the regulatory period, 2010-2013. To avoid sample misspecifications, distributors were divided into three groups with different scale factors and exogenous factors were also included in the study.…”