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Electricity transmission arrangements in Great Britain: Time for change?

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  • Strbac, Goran
  • Pollitt, Michael
  • Konstantinidis, Christos Vasilakos
  • Konstantelos, Ioannis
  • Moreno, Rodrigo
  • Newbery, David
  • Green, Richard

Abstract

In Great Britain (GB) and across Europe significant investment in electricity transmission is expected over the coming years as decarbonisation and market integration efforts are intensified. However, there is also significant uncertainty with the amount, location and timing of new generation connection, which in turn will drive the transmission investment needs. Given the absence of efficient market design, we identify three key areas of concern with the current transmission investment arrangements: (i) a mis-aligned incentives framework for transmission investment and operation; (ii) lack of coordination of investment and operation; and (iii) conflicts of interest. We then propose three options for future evolution of transmission regimes, which cover the full spectrum of institutional arrangements with respect to transmission planning and delivery, i.e. how and who plans, owns, builds and operates the transmission system. For each option we present: key characteristics; evolution of the current regimes; the ability of the option to address the concerns; and key strengths and weaknesses. Overall, we conclude in the case of GB (this conclusion could be extended to other European countries) that the most appropriate option would be that of an Independent System Operator (ISO) who would be responsible for planning and operating the transmission system.

Suggested Citation

  • Strbac, Goran & Pollitt, Michael & Konstantinidis, Christos Vasilakos & Konstantelos, Ioannis & Moreno, Rodrigo & Newbery, David & Green, Richard, 2014. "Electricity transmission arrangements in Great Britain: Time for change?," Energy Policy, Elsevier, vol. 73(C), pages 298-311.
    • Handle: RePEc:eee:enepol:v:73:y:2014:i:c:p:298-311
    DOI: 10.1016/j.enpol.2014.06.014
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    References listed on IDEAS

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    1. 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.
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    6. Newbery, David & Pollitt, Michael G. & Ritz, Robert A. & Strielkowski, Wadim, 2018. "Market design for a high-renewables European electricity system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 695-707.
    7. Mari Makkonen, Mats Nilsson and Satu Viljainen, 2015. "All quiet on the western front? Transmission capacity development in the Nordic electricity market," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
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    9. Gerbaulet, C. & Weber, A., 2018. "When regulators do not agree: Are merchant interconnectors an option? Insights from an analysis of options for network expansion in the Baltic Sea region," Energy Policy, Elsevier, vol. 117(C), pages 228-246.
    10. Konstantelos, Ioannis & Pudjianto, Danny & Strbac, Goran & De Decker, Jan & Joseph, Pieter & Flament, Aurore & Kreutzkamp, Paul & Genoese, Fabio & Rehfeldt, Leif & Wallasch, Anna-Kathrin & Gerdes, Ger, 2017. "Integrated North Sea grids: The costs, the benefits and their distribution between countries," Energy Policy, Elsevier, vol. 101(C), pages 28-41.
    11. Jonas Egerer & Jens Weibezahn & Hauke Hermann, 2015. "Two Price Zones for the German Electricity Market: Market Implications and Distributional Effects," Discussion Papers of DIW Berlin 1451, DIW Berlin, German Institute for Economic Research.
    12. Wadim Strielkowski & Dalia Streimikiene & Alena Fomina & Elena Semenova, 2019. "Internet of Energy (IoE) and High-Renewables Electricity System Market Design," Energies, MDPI, vol. 12(24), pages 1-17, December.
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    14. David Newbery & Michael Grubb, 2014. "The Final Hurdle?: Security of supply, the Capacity Mechanism and the role of interconnectors," Working Papers EPRG 1412, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
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