Lost economies of scope and potential merger gains in the Norwegian electricity industry
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In 2016, the Norwegian Parliament amended the Energy Act, with changes taking effect from 2021. The amended legislation will introduce strict separation of all generation and distribution companies within the electricity industry in Norway. Economies of scope studies from Norway show evidence of large economies of scope. Further, the companies in the industry could utilize the economies of scale potential if they merged. In this paper, we perform merger analysis to investigate potential merger gains in the Norwegian electricity distribution industry. By providing a method of testing for optimal mergers, we can present the best merger combination to the Norwegian electricity industry.
KeywordsPotential merger gains Energy Policy Energy Act Lost economies of scope Optimized mergers
The work in this study is a part of the project Benchmarking for Regulation of Norwegian Electricity Networks (ElBench). Participants in the project are Norwegian Water Resources and Energy Directorate, Energy Norway and six electricity companies in Norway (BKK Nett, Eidsiva Nett, Hafslund Nett, Helgeland Kraft, Lyse Elnett and Skagerak Nett).
Compliance with ethical standards
Conflict of interest
The authors declare that they have no conflict of interest.
This article does not contain any studies with human participants or animals performed by any of the authors.
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