Incentive schemes

The AEEG has introduced specific bonus and penalty schemes aimed at incentivizing service improvement, in both technical and economic terms. Implicit in the incentive mechanisms is the assumption that if the objectives are achieved, the benefit for the users of the service will be a multiple of the incentive paid to Ternai. In particular, in 2010 incentived-based mechanisms were provided for:

The bonuses earned for achieving in 2010 the objectives established as part of the incentive schemes are included in Terna’s total regulated revenue. In the case of the incentive for reducing the volume of resources procured on the MDS, Terna further improved its performance during 2010, reducing the volume of energy procured by about 41% compared to the 2009 volume. This result led to the payment of a bonus of about 160 million euro (40 million euro in 2009). Considering the three-year duration of the incentive mechanism and its characteristics, Terna recorded 77 million euro in its 2010 Financial Statements as the related fair value, taking into account the regulatory risks and those connected with the performance of the Electricity Market.   

INCENTIVE MECHANISMS ACTIVATED IN 2010

Objective Year introduced
Period applicable

Penalty-bonus range

2010 result
Quality of transmission service 2007
(Resolution 341/07)
2008-2010   Bonus 4.4 million euro
Improved forecasts of wind production  
2007
(Resolution 351/07)
2008-2011 Penalty maximum
1.5 million euro

Bonus maximum
3 million euro
Bonus 3.0 million euro

Improved forecasts of requirements
2007
(Resolution 351/07)
2008-2011 Penalty maximum
5 million euro

Bonus maximum
5 million euro
Bonus 1.8 million euro
Reduced volume of resources procured on the MDS  2009
(Resolution 213/09)
2010-2012 -   Bonus 160 million euro (1)
Acceleration of investment to develop the NTG 


2010
(Resolution 87/10)
2010-2011
as a trial, from 2012 definitively

-   Bonus 16.8 million euro

(1) including 77 million euro recorded as 2010 revenue