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Regulation and Regulatory Risk in the Face of Large Transmission Investment

Author

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  • Gert Brunekreeft
  • Roland Meyer

Abstract

Most transmission systems in Europe are currently in need of large network expansions, in particular to cope with increasing shares of load remote renewable energy sources. Given that the scope for further cost reductions is largely exhausted, we observe a paradigm shift into the direction of implementing more cost-pass-through elements into price-based regulation to strengthen the necessary investment incentives. Regulatory emphasis is shifting from cost-reductions to promoting investment. Obstacles to investments arise in particular from regulatory risk and efficiency risk. Addressing these topics, we recommend a move towards more cost-based approaches, with ex-ante investment approval and less reliance on ex-post benchmarking.

Suggested Citation

  • Gert Brunekreeft & Roland Meyer, 2011. "Regulation and Regulatory Risk in the Face of Large Transmission Investment," Bremen Energy Working Papers 0005, Bremen Energy Research.
    • Handle: RePEc:bei:00bewp:0005
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    Cited by:

    1. Gert Brunekreeft, 2012. "On the Role of International Benchmarking of Electricity Transmission System Operators facing significant investment requirements," Bremen Energy Working Papers 0012, Bremen Energy Research.

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    Keywords

    regulation; regulatory risk; network investments;
    All these keywords.

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