IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v35y2010i10p4107-4115.html
   My bibliography  Save this article

Merchant electricity transmission expansion: A European case study

Author

Listed:
  • Kristiansen, T.
  • Rosellón, J.

Abstract

We apply a merchant transmission model to the trilateral market coupling (TLC) arrangement among the Netherlands, Belgium and France as an example, and note that it could further be applied to other market splitting or coupling of Europe’s different national power markets. In this merchant framework the system operator allocates financial transmission rights (FTRs) to investors in transmission expansion based upon their preferences, and revenue adequacy. The independent system operator (ISO) preserves some proxy FTRs to manage potential negative externalities that may result from expansion projects. This scheme could help European market coupling arrangements attract additional investment.

Suggested Citation

  • Kristiansen, T. & Rosellón, J., 2010. "Merchant electricity transmission expansion: A European case study," Energy, Elsevier, vol. 35(10), pages 4107-4115.
  • Handle: RePEc:eee:energy:v:35:y:2010:i:10:p:4107-4115
    DOI: 10.1016/j.energy.2010.06.025
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544210003488
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paul Joskow & Jean Tirole, 2005. "Merchant Transmission Investment," Journal of Industrial Economics, Wiley Blackwell, vol. 53(2), pages 233-264, June.
    2. Bushnell, James B. & Stoft, Steven E., 1997. "Improving private incentives for electric grid investment," Resource and Energy Economics, Elsevier, vol. 19(1-2), pages 85-108, March.
    3. Giorgia Oggioni and Yves Smeers, 2010. "Degree of coordination in market-coupling and counter-trading," RSCAS Working Papers 2010/24, European University Institute.
    4. OGGIONI, Giorgia & SMEERS, Yves, 2010. "Degree of coordination in market-coupling and counter-trading," CORE Discussion Papers 2010001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Wu, F.F & Zheng, F.L. & Wen, F.S., 2006. "Transmission investment and expansion planning in a restructured electricity market," Energy, Elsevier, vol. 31(6), pages 954-966.
    6. Hogan, William W, 1992. "Contract Networks for Electric Power Transmission," Journal of Regulatory Economics, Springer, vol. 4(3), pages 211-242, September.
    7. Gert Brunekreeft & David Newbery, 2006. "Should merchant transmission investment be subject to a must-offer provision?," Journal of Regulatory Economics, Springer, vol. 30(3), pages 233-260, November.
    8. Bushnell, James B & Stoft, Steven E, 1996. "Electric Grid Investment under a Contract Network Regime," Journal of Regulatory Economics, Springer, vol. 10(1), pages 61-79, July.
    9. Tarjei Kristiansen & Juan Rosellón, 2006. "A Merchant Mechanism for Electricity Transmission Expansion," Journal of Regulatory Economics, Springer, vol. 29(2), pages 167-193, March.
    10. Bresesti, Paola & Calisti, Roberto & Cazzol, Maria Vittoria & Gatti, Antonio & Provenzano, Dario & Vaiani, Andrea & Vailati, Riccardo, 2009. "The benefits of transmission expansions in the competitive electricity markets," Energy, Elsevier, vol. 34(3), pages 274-280.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hemmati, Reza & Hooshmand, Rahmat-Allah & Khodabakhshian, Amin, 2013. "State-of-the-art of transmission expansion planning: Comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 23(C), pages 312-319.
    2. Torriti, Jacopo, 2014. "Privatisation and cross-border electricity trade: From internal market to European Supergrid?," Energy, Elsevier, vol. 77(C), pages 635-640.
    3. Clemens Gerbaulet & Alexander Weber, 2014. "Is There Still a Case for Merchant Interconnectors?: Insights from an Analysis of Welfare and Distributional Aspects of Options for Network Expansion in the Baltic Sea Region," Discussion Papers of DIW Berlin 1404, DIW Berlin, German Institute for Economic Research.
    4. Chamorro, José M. & Abadie, Luis M. & de Neufville, Richard & Ilić, Marija, 2012. "Market-based valuation of transmission network expansion. A heuristic application in GB," Energy, Elsevier, vol. 44(1), pages 302-320.
    5. Juan Rosellón & Eric Zenón, 2010. "Expansión de las redes de transmisión eléctrica en Norteamérica: Teoría y aplicaciones," Working papers DTE 479, CIDE, División de Economía.
    6. Pollitt, M. J., 2011. "Lessons from the History of Independent System Operators in the Energy Sector, with applications to the Water Sector," Cambridge Working Papers in Economics 1153, Faculty of Economics, University of Cambridge.
    7. Pollitt, Michael G., 2012. "Lessons from the history of independent system operators in the energy sector," Energy Policy, Elsevier, vol. 47(C), pages 32-48.
    8. Li, Yanfei & Chang, Youngho, 2015. "Infrastructure investments for power trade and transmission in ASEAN+2: Costs, benefits, long-term contracts and prioritized developments," Energy Economics, Elsevier, vol. 51(C), pages 484-492.
    9. 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 the On
      ," MPRA Paper 26471, University Library of Munich, Germany.
    10. Zakeri, Behnam & Virasjoki, Vilma & Syri, Sanna & Connolly, David & Mathiesen, Brian V. & Welsch, Manuel, 2016. "Impact of Germany's energy transition on the Nordic power market – A market-based multi-region energy system model," Energy, Elsevier, vol. 115(P3), pages 1640-1662.
    11. Tom Brijs & Daniel Huppmann & Sauleh Siddiqui & Ronnie Belmans, 2016. "Auction-Based Allocation of Shared Electricity Storage Resources through Physical Storage Rights," Discussion Papers of DIW Berlin 1566, DIW Berlin, German Institute for Economic Research.
    12. Yanfei LI & Youngho CHANG, 2014. "Infrastructutre Investments for Power Trade and Transmission in ASEAN+2: Costs, Benefits, Long-Term Contracts, and Prioritised Development," Working Papers DP-2014-21, Economic Research Institute for ASEAN and East Asia (ERIA).
    13. Schill, Wolf-Peter & Egerer, Jonas & Rosellón, Juan, 2015. "Testing Regulatory Regimes for Power Transmission Expansion with Fluctuating Demand and Wind Generation," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 1-28.
    14. Hagspiel, S. & Jägemann, C. & Lindenberger, D. & Brown, T. & Cherevatskiy, S. & Tröster, E., 2014. "Cost-optimal power system extension under flow-based market coupling," Energy, Elsevier, vol. 66(C), pages 654-666.
    15. Ochoa, Camila & van Ackere, Ann, 2015. "Winners and losers of market coupling," Energy, Elsevier, vol. 80(C), pages 522-534.
    16. repec:eee:enepol:v:117:y:2018:i:c:p:228-246 is not listed on IDEAS

    More about this item

    Keywords

    Transmission expansion; Trilateral market coupling; Europe; Financial transmission rights; Congestion management;

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:35:y:2010:i:10:p:4107-4115. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.journals.elsevier.com/energy .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.