On the role of international benchmarking of electricity Transmission System Operators facing significant investment requirements
AbstractElectricity networks currently face massive investment requirements. This paper argues that, given the investment requirements, (international) benchmarking is not an adequate tool for the regulation of transmission system operators (TSO). Errors in the outcomes of benchmarking will likely distort network investment and therefore the costs of doing it wrong are high. The paper discusses options to reduce the weight of benchmarking in TSO regulation and options that do not rely on benchmarking at all. Overall, facing massive investment requirements, it seems desirable to switch to a regulatory system with ex-ante investment approval and away from ex-post benchmarking.
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Bibliographic InfoPaper provided by Bremer Energie Institut in its series Bremen Energy Working Papers with number 0012.
Length: 27 pages
Date of creation: Oct 2012
Date of revision:
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Web page: http://www.bremer-energie-institut.de/
electricity; network; regulation; benchmarking; uncertainty;
Find related papers by JEL classification:
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- G00 - Financial Economics - - General - - - General
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-24 (All new papers)
- NEP-ENE-2012-11-24 (Energy Economics)
- NEP-NET-2012-11-24 (Network Economics)
- NEP-REG-2012-11-24 (Regulation)
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