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Optimal transmission regulation of an integrated energy market

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  • Tangerås, Thomas P.

Abstract

The capacity of the transmission network determines the extent of integration of a multi-national energy market. Cross-border externalities render coordination of network capacity valuable. Is it then optimal to collect regulatory powers in the hands of a single regulator? Should a common system operator manage the entire network? I show that optimal network governance depends on (i) whether the centralized regulatory agency is able to balance the interests of the different countries; (ii) asymmetries across countries in the gains from market integration; (iii) network characteristics (substitutability versus complementarity); and (iv) the social cost of operator rent.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 34 (2012)
Issue (Month): 5 ()
Pages: 1644-1655

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Handle: RePEc:eee:eneeco:v:34:y:2012:i:5:p:1644-1655

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

Related research

Keywords: Centralization; Multi-contracting; Multi-national energy market; System operation; Transmission regulation;

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