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Regulated and merchant interconnectors in Australia: SNI and Murraylink revisited

  • Littlechild, S.

This paper examines the history of the various actual and proposed interconnectors between New South Wales and Victoria into South Australia. It covers the period from the earliest proposal for a regulated interconnector to the recent Victoria Supreme Court review and the latest ministerial proposals. It finds, inter alia, that the Supreme Court decision is likely to have strengthened, in a beneficial way, the regulatory regime for dealing with merchant interconnectors and the obligations on incumbent transmission companies. It finds that none of the proposals for regulated interconnectors did or would have passed the regulatory tests as formulated in terms of aggregate benefits to all market participants. It finds that neither of the merchant interconnectors (into South Australia and Queensland) are likely to have been profitable. It sees a possible explanation for the construction of regulated interconnectors in terms of the benefits to customers, or in terms of bringing about a single competitive market. Above all, it illustrates the political context in which decisions on interconnectors have been made, and the need to take account of such motivations when comparing the likely effects of regulated interconnectors versus merchant interconnectors

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File URL: http://www.econ.cam.ac.uk/electricity/publications/wp/ep37.pdf
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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0410.

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Length: 52
Date of creation: Jan 2004
Date of revision:
Handle: RePEc:cam:camdae:0410
Note: CMI37, IO
Contact details of provider: Web page: http://www.econ.cam.ac.uk/index.htm

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  1. Paul Joskow & Jean Tirole, 2003. "Merchant Transmission Investment," NBER Working Papers 9534, National Bureau of Economic Research, Inc.
  2. Mountain, Bruce & Swier, Geoff, 2003. "Entrepreneurial Interconnectors and Transmission Planning in Australia," The Electricity Journal, Elsevier, vol. 16(2), pages 66-76, March.
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