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National-strategic investment in European power transmission capacity

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  • Huppmann, Daniel
  • Egerer, Jonas

Abstract

The transformation of the European electricity system requires substantial investment in transmission capacity to facilitate cross-border trade and to efficiently integrate renewable energy sources. However, network planning in the EU is still mainly a national prerogative. In contrast to other studies aiming to identify the pan-European (continental) welfare-optimal transmission expansion, we investigate the impact of zonal planners deciding on network investment strategically, with the aim of maximizing the sum of consumer surplus, generator profits and congestion rents in their jurisdiction. This reflects the inadequacy of current mechanisms to compensate for welfare re-allocations across national boundaries arising from network upgrades.

Suggested Citation

  • Huppmann, Daniel & Egerer, Jonas, 2015. "National-strategic investment in European power transmission capacity," European Journal of Operational Research, Elsevier, vol. 247(1), pages 191-203.
  • Handle: RePEc:eee:ejores:v:247:y:2015:i:1:p:191-203
    DOI: 10.1016/j.ejor.2015.05.056
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    Citations

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    Cited by:

    1. Karel Janda & Jan Malek & Lukas Recka, 2017. "Influence of Renewable Energy Sources on Electricity Transmission Networks in Central Europe," Working Papers IES 2017/05, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Feb 2017.
    2. repec:eee:ejores:v:266:y:2018:i:2:p:622-638 is not listed on IDEAS
    3. repec:eee:energy:v:149:y:2018:i:c:p:762-778 is not listed on IDEAS
    4. Grimm, Veronika & Martin, Alexander & Schmidt, Martin & Weibelzahl, Martin & Zöttl, Gregor, 2016. "Transmission and generation investment in electricity markets: The effects of market splitting and network fee regimes," European Journal of Operational Research, Elsevier, vol. 254(2), pages 493-509.
    5. Zerrahn, Alexander & Huppmann, Daniel, 2014. "Network Expansion to Mitigate Market Power: How Increased Integration Fosters Welfare," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100459, Verein für Socialpolitik / German Economic Association.
    6. repec:eee:enepol:v:108:y:2017:i:c:p:524-537 is not listed on IDEAS
    7. Jonas Egerer, 2016. "Open Source Electricity Model for Germany (ELMOD-DE)," Data Documentation 83, DIW Berlin, German Institute for Economic Research.
    8. Joachim Bertsch & Simeon Hagspiel & Lisa Just, 2016. "Congestion management in power systems," Journal of Regulatory Economics, Springer, vol. 50(3), pages 290-327, December.
    9. repec:kap:netspa:v:17:y:2017:i:2:d:10.1007_s11067-017-9338-1 is not listed on IDEAS
    10. repec:eee:ejores:v:261:y:2017:i:2:p:755-771 is not listed on IDEAS
    11. repec:eee:ejores:v:261:y:2017:i:3:p:971-983 is not listed on IDEAS
    12. repec:eee:ejores:v:264:y:2018:i:2:p:717-731 is not listed on IDEAS
    13. repec:eee:appene:v:201:y:2017:i:c:p:174-187 is not listed on IDEAS
    14. Janda, Karel & Málek, Jan & Rečka, Lukáš, 2017. "Influence of renewable energy sources on transmission networks in Central Europe," Energy Policy, Elsevier, vol. 108(C), pages 524-537.
    15. repec:eee:enepol:v:107:y:2017:i:c:p:371-380 is not listed on IDEAS
    16. Bertsch, Joachim & Hagspiel, Simeon & Just, Lisa, 2016. "Congestion management in power systems - Long-term modeling framework and large-scale application," EWI Working Papers 2015-3, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).

    More about this item

    Keywords

    Electricity transmission; Network expansion; Generalized Nash equilibrium (GNE); Mixed-integer equilibrium problem under equilibrium constraints (MI-EPEC);

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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