Optimal transmission regulation of an integrated energy market
AbstractThe 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 InfoArticle provided by Elsevier in its journal Energy Economics.
Volume (Year): 34 (2012)
Issue (Month): 5 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/eneco
Centralization; Multi-contracting; Multi-national energy market; System operation; Transmission regulation;
Other versions of this item:
- Tangerås, Thomas P., 2010. "Optimal Transmission Regulation in an Integrated Energy Market," Working Paper Series 838, Research Institute of Industrial Economics.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
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