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Electricity transmission: an overview of the current debate

Author

Listed:
  • Brunekreeft, G.
  • Neuhoff, K.
  • Newbery, D.

Abstract

Electricity transmission has emerged as critical for successfully liberalising power markets. This paper surveys the issues currently under discussion and provides a framework for the remaining papers in this issue. We conclude that signalling the efficient location of generation investment might require even a competitive LMP system to be complemented with deep connection charges. Although a Europe-wide LMP system is desirable, it appears politically problematic, so an integrated system of market coupling, possibly evolving by voluntary participation, should have high priority. Merchant investors may be able to increase interconnector capacity, although this is not unproblematic and raises new regulatory issues. A key issue that needs further research is how to better incentivize TSOs, especially with respect to cross-border issues.

Suggested Citation

  • Brunekreeft, G. & Neuhoff, K. & Newbery, D., 2004. "Electricity transmission: an overview of the current debate," Cambridge Working Papers in Economics 0463, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camdae:0463
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    File URL: http://www.econ.cam.ac.uk/electricity/publications/wp/ep60.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Electricity; Transmission; Regulation; Prices; Merchant Investment;

    JEL classification:

    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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