Environmental concerns remain a driving force for European energy policy, as exemplified by last years’ directive on energy efficiency. The directive sets the legislative framework to achieve energy efficiency targets. Since electricity network losses comprise a significant component of electricity demand, regulatory incentives to facilitate loss reduction in electricity networks should be in place. This paper evaluates the incentives for investments in low-loss equipment in differing regulatory settings and outlines pathways to assure the proper embedding of these incentives.
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