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The diversity of design of TSOs

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Author Info

  • Vincent Rious

    (SUPELEC-Campus Gif - SUPELEC)

  • Jean-Michel Glachant

    (ADIS - Analyse des Dynamiques Industrielles et Sociales - Université Paris Sud - Paris XI)

  • Yannick Perez

    (ADIS - Analyse des Dynamiques Industrielles et Sociales - Université Paris Sud - Paris XI)

  • Philippe Dessante

    (SUPELEC-Campus Gif - SUPELEC)

Abstract

It is puzzling today to explain diversity and imperfection of actual transmission monopoly designs in competitive electricity markets. We argue that transmission monopoly in competitive electricity markets has to be analysed within a Wilson (2002) modular framework. Applied to the management of electricity flows, at least three modules make the core of transmission design: 1° the short run management of network externalities; 2° the long run management of network investment; and 3° the coordination of neighboring Transmission System Operators for cross border trade. In order to tackle this diversity of designs of TSOs, we show that for each of these modules, three different basic ways of managing them are possible. Among the identified twenty seven options of organisation, we define an Ideal TSO. Second, we demonstrate that 1°monopoly design differs from this Ideal TSO and cannot handle these three modules irrespective of the “institutional” definition and allocation of property rights on transmission; while 2°definition and allocation of property rights on transmission cannot ignore the existing electrical industry and transmission network structure: they have to complement each other to be efficient. Some conclusions for regulatory issues of transmission systems operators are derived from this analysis of network monopoly organisation.

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Bibliographic Info

Paper provided by HAL in its series Post-Print with number hal-00318518.

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Date of creation: 10 Jul 2008
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Publication status: Published - Presented, Centre for Competition and Regulatory Policy summer workshop, 2008, London, United Kingdom
Handle: RePEc:hal:journl:hal-00318518

Note: View the original document on HAL open archive server: http://hal-supelec.archives-ouvertes.fr/hal-00318518/en/
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Keywords: design of TSOs; management of power flows; governance structure of transmission;

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References

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Citations

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Cited by:
  1. Cédric Clastres & Catherine Locatelli, 2012. "European Union energy security: the challenges of liberalisation in a risk-prone international environment Society," Post-Print halshs-00787123, HAL.
  2. Jean-Michel Glachant, 2009. "Regulating Networks in the New Economy," RSCAS Working Papers 2009/05, European University Institute.
  3. Mustafa Durakoglu, S., 2011. "Political institutions of electricity regulation: The case of Turkey," Energy Policy, Elsevier, vol. 39(9), pages 5578-5587, September.
  4. Tangerås, Thomas P., 2010. "Optimal Transmission Regulation in an Integrated Energy Market," Working Paper Series 838, Research Institute of Industrial Economics.
  5. J-M- Glachant & H. Khalfallah & Y. Perez & V. Rious & M. Saguan, 2013. "Implementing Incentive Regulation and Regulatory Alignment with Resource Bounded Regulators," Competition and Regulation in Network Industries, Intersentia, vol. 14(3), pages 265-291, September.
  6. Dubois, Ute, 2009. "Adaptability of competitive electricity reforms a modular analysis," Energy Policy, Elsevier, vol. 37(4), pages 1213-1221, April.
  7. Miguel Vazquez & Michelle Hallack, 2013. "Interaction between gas and electricity market-based trading in the short run," RSCAS Working Papers 2013/42, European University Institute.
  8. Jean-Michel Glachant & Haikel Khalfallah & Yannick Perez & Vincent Rious & Marcelo Saguan, 2013. "Implementing incentive regulation through an alignment with resource bounded regulators," Post-Print halshs-00767872, HAL.
  9. Hiroux, C. & Saguan, M., 2010. "Large-scale wind power in European electricity markets: Time for revisiting support schemes and market designs?," Energy Policy, Elsevier, vol. 38(7), pages 3135-3145, July.
  10. Keyaerts, Nico & Hallack, Michelle & Glachant, Jean-Michel & D'haeseleer, William, 2011. "Gas market distorting effects of imbalanced gas balancing rules: Inefficient regulation of pipeline flexibility," Energy Policy, Elsevier, vol. 39(2), pages 865-876, February.

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