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Transmission expansion in Argentina 1: The origins of policy

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  • Littlechild, Stephen C.
  • Skerk, Carlos J.

Abstract

As part of its electricity reform, Argentina developed a distinctive policy on transmission expansion. Market participants, rather than the transmission company or the regulator, would determine expansions. Initially, this policy proved controversial and some economists have been critical. This paper explains why it was decided to adopt the policy. The aim was to avoid the inefficiencies and over-expansions of the state-owned era. The solution was to introduce competition wherever possible and to minimise the role for regulation. The existing transmission system already contained several separate but coordinated transmission networks. Users would have the incentive to propose and approve expansions without the need for regulation, and competition was viable for the construction and operation of transmission expansions. The method has been criticised for allocating costs and votes according to usage instead of benefits. However, the method was pragmatic, to take advantage of the existing program for system control, and designed to limit the scope for subjective and unpredictable regulatory judgements. It has merit even where such problems do not apply, as a means of securing outcomes better tailored to the needs of users.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 30 (2008)
Issue (Month): 4 (July)
Pages: 1367-1384

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Handle: RePEc:eee:eneeco:v:30:y:2008:i:4:p:1367-1384

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Web page: http://www.elsevier.com/locate/eneco

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References

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  1. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 4: A review of performance," Energy Economics, Elsevier, vol. 30(4), pages 1462-1490, July.
  2. Chisari, Omar O. & Dal-Bó, Pedro & Romero, Carlos A., 2000. "High-Tension Electricity Network Expansions in Argentina: Decision Mechanisms and Willigness-to-Pay Revelation," UADE Working Papers 9_2000, Instituto de Economía, Universidad Argentina de la Empresa.
  3. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 2: The Fourth Line revisited," Energy Economics, Elsevier, vol. 30(4), pages 1385-1419, July.
  4. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 3: The evolution of policy," Energy Economics, Elsevier, vol. 30(4), pages 1420-1461, July.
  5. Littlechild, Stephen C. & Ponzano, Eduardo A., 2008. "Transmission expansion in Argentina 5: The regional electricity forum of Buenos Aires province," Energy Economics, Elsevier, vol. 30(4), pages 1491-1526, July.
  6. Pollitt, Michael, 2008. "Electricity reform in Argentina: Lessons for developing countries," Energy Economics, Elsevier, vol. 30(4), pages 1536-1567, July.
  7. Galetovic, Alexander & Inostroza, Juan Ricardo, 2008. "A lesson from Argentina: Setting transmission tolls in a competitive auction is much better than regulating them," Energy Economics, Elsevier, vol. 30(4), pages 1334-1366, July.
  8. Abdala, Manuel A., 2008. "Transmission pricing in privately-owned electricity grids: An illustration from the Argentine electricity pool," Energy Economics, Elsevier, vol. 30(4), pages 1284-1305, July.
  9. Abdala, Manuel A., 2008. "Governance of competitive transmission investment in weak institutional systems," Energy Economics, Elsevier, vol. 30(4), pages 1306-1320, July.
  10. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 6: Distribution companies, regulation and the Public Contest method," Energy Economics, Elsevier, vol. 30(4), pages 1527-1535, July.
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Citations

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Cited by:
  1. Pollitt, M.G., 2004. "‘Electricity Reform in Argentina: Lessons for Developing Countries’," Cambridge Working Papers in Economics 0449, Faculty of Economics, University of Cambridge.
  2. Stephen Littlechild, 2012. "Merchant and regulated transmission: theory, evidence and policy," Journal of Regulatory Economics, Springer, vol. 42(3), pages 308-335, December.
  3. Erdogdu, Erkan, 2013. "Essays on Electricity Market Reforms: A Cross-Country Applied Approach," MPRA Paper 47139, University Library of Munich, Germany.
  4. Cédric Clastres, 2010. "Les réseaux intelligents : régulation, investissement et gestion de la demande électrique," Post-Print halshs-00539818, HAL.
  5. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 2: The Fourth Line revisited," Energy Economics, Elsevier, vol. 30(4), pages 1385-1419, July.
  6. Littlechild, S.C. & Ponzano, E.A., 2007. "Transmission expansion in Argentina 5: the Regional Electricity Forum of Buenos Aires Province," Cambridge Working Papers in Economics 0762, Faculty of Economics, University of Cambridge.
  7. Clastres, Cédric, 2011. "Smart grids: Another step towards competition, energy security and climate change objectives," Energy Policy, Elsevier, vol. 39(9), pages 5399-5408, September.
  8. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 4: A review of performance," Energy Economics, Elsevier, vol. 30(4), pages 1462-1490, July.
  9. Littlechild, Stephen C. & Skerk, Carlos J., 2008. "Transmission expansion in Argentina 3: The evolution of policy," Energy Economics, Elsevier, vol. 30(4), pages 1420-1461, July.

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