IDEAS home Printed from https://ideas.repec.org/p/cam/camdae/2646.html

Minimising System Costs: Reforming Transmission Charges and Renewable Electricity Contracts

Author

Listed:
  • Newbery, D. M.

Abstract

European energy plans envisage a large increase in Variable Renewable Electricity (VRE), often located distant from demand and congesting existing transmission. Many countries recognise the importance of better locational signals for investment and operation, and possible changes to VRE support systems to reduce risk and cost. This article argues that an efficient low-carbon transition requires a suitable portfolio of reforms to transmission and market pricing and VRE support design, with different combinations suitable when some options (like spatial transmission charges or locational wholesale pricing) are ruled out. Forward-looking spatial transmission contracts offer the simplest decentralised solution for least-cost VRE expansion plans, failing which spatial planning may be needed to coordinate transmission delivery with VRE commissioning.

Suggested Citation

  • Newbery, D. M., 2026. "Minimising System Costs: Reforming Transmission Charges and Renewable Electricity Contracts," Cambridge Working Papers in Economics 2646, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2646
    as

    Download full text from publisher

    File URL: https://www.econ.cam.ac.uk/sites/default/files/publication-cwpe-pdfs/cwpe2646.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    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:cam:camdae:2646. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jake Dyer (email available below). General contact details of provider: https://www.econ.cam.ac.uk/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.