Electricity Transmission Pricing: How much does it cost to get it wrong?
AbstractEconomists know how to calculate optimal prices for electricity transmission. These are rarely applied in practice. This paper develops a thirteen node model of the transmission system in England and Wales, incorporating losses and transmission constraints. It is solved with optimal prices, and with uniform prices for demand and for generation, re-dispatching when needed to take account of transmission constraints. Moving from uniform prices to optimal nodal prices could raise welfare by 1.5% of the generators’ revenues, and would be less vulnerable to market power. It would also send better investment signals, but create politically sensitive regional gains and losses.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research in its series Working Papers with number 0420.
Date of creation: Sep 2004
Date of revision:
Contact details of provider:
Postal: 77 Massachusetts Ave. (Building E40-279), Cambridge, MA 02139-4307
Phone: (617) 253-3551
Fax: (617) 253-9845
Web page: http://tisiphone.mit.edu/RePEc
More information through EDIRC
Other versions of this item:
- Green, R., 2004. "Electricity Transmission Pricing: How much does it cost to get it wrong?," Cambridge Working Papers in Economics 0466, Faculty of Economics, University of Cambridge.
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Joskow, Paul L., 2008. "Capacity payments in imperfect electricity markets: Need and design," Utilities Policy, Elsevier, vol. 16(3), pages 159-170, September.
- Bernard, Jean-Thomas & Guertin, Chantal, 2000.
"Nodal Pricing and Transmissions Losses. An Application to a Hydroelectric Power System,"
Cahiers de recherche
- Bernard, Jean-Thomas & Guertin, Chantal, 2002. "Nodal Pricing and Transmission Losses: An Application to a Hydroelectric Power System," Discussion Papers dp-02-34, Resources For the Future.
- Richard Green, 2007. "Nodal pricing of electricity: how much does it cost to get it wrong?," Journal of Regulatory Economics, Springer, vol. 31(2), pages 125-149, April.
- Pepermans, Guido & Willems, Bert, 2010. "Cost Recovery in Congested Electricity Networks," Working Papers 2010/22, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
- Kattuman, P.A. & Green, R.J. & Bialek, J.W., 2001. "A Tracing Method for Pricing Inter-Area Electricity Trades," Cambridge Working Papers in Economics 0107, Faculty of Economics, University of Cambridge.
- Rosellon, Juan & Tregear, Juan & Zenon, Eric, 2010.
"El modelo HRV para expansión óptima de redes de transmisión: una aplicación a la red eléctrica de Ontario
[The HRV Model for the Optimal Expansion of Transmission Networks: an Application to t," MPRA Paper 26471, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sharmila Ganguly).
If references are entirely missing, you can add them using this form.