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Transmission Market Design

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  • Hogan, William W.

    (Harvard U)

Abstract

Coordinated electricity spot markets support open access to existing transmission grids. Associated financial transmission rights provide a key ingredient for long-term contracting and property rights for grid expansion. Design of a mixed system of merchant and regulated transmission investment presents a challenge for regulators and market participants. With the right choice, merchant transmission investment could play a significant but not exclusive role in efficient transmission expansion. With the wrong choice, the unintended consequences could undermine the whole foundation of electricity market restructuring.

Suggested Citation

  • Hogan, William W., 2003. "Transmission Market Design," Working Paper Series rwp03-040, Harvard University, John F. Kennedy School of Government.
  • Handle: RePEc:ecl:harjfk:rwp03-040
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    Cited by:

    1. Brunekreeft, Gert & Neuhoff, Karsten & Newbery, David, 2005. "Electricity transmission: An overview of the current debate," Utilities Policy, Elsevier, vol. 13(2), pages 73-93, June.
    2. Makoto Tanaka, 2007. "Extended Price Cap Mechanism for Efficient Transmission Expansion under Nodal Pricing," Networks and Spatial Economics, Springer, vol. 7(3), pages 257-275, September.
    3. Vajjhala, Shalini P. & Fischbeck, Paul S., 2007. "Quantifying siting difficulty: A case study of US transmission line siting," Energy Policy, Elsevier, vol. 35(1), pages 650-671, January.
    4. Sun, Junjie, 2005. "U.S. Financial Transmission Rights: Theory and Practice," Staff General Research Papers Archive 12266, Iowa State University, Department of Economics.
    5. Tarjei Kristiansen & Juan Rosellón, 2006. "A Merchant Mechanism for Electricity Transmission Expansion," Journal of Regulatory Economics, Springer, vol. 29(2), pages 167-193, March.
    6. Arellano, M. Soledad & Serra, Pablo, 2007. "Spatial peak-load pricing," Energy Economics, Elsevier, vol. 29(2), pages 228-239, March.
    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. Leuthold, Florian & Weigt, Hannes & von Hirschhausen, Christian, 2008. "Efficient pricing for European electricity networks - The theory of nodal pricing applied to feeding-in wind in Germany," Utilities Policy, Elsevier, vol. 16(4), pages 284-291, December.
    9. Kristiansen, Tarjei, 2008. "Allocation of long-term financial transmission rights for transmission expansion," European Journal of Operational Research, Elsevier, vol. 184(3), pages 1122-1139, February.
    10. Brunekreeft, G., 2003. "Market-based Investment in Electricity Transmission Networks: Controllable Flow," Cambridge Working Papers in Economics 0340, Faculty of Economics, University of Cambridge.
    11. Florian Leuthold & Hannes Weigt & Christian Hirschhausen, 2012. "A Large-Scale Spatial Optimization Model of the European Electricity Market," Networks and Spatial Economics, Springer, vol. 12(1), pages 75-107, March.
    12. Brunekreeft, G., 2004. "‘Regulatory Issues in Merchant Transmission Investment’," Cambridge Working Papers in Economics 0422, Faculty of Economics, University of Cambridge.
    13. Ojeda, Osvaldo A. & Olsina, Fernando & Garcés, Francisco, 2009. "Simulation of the long-term dynamic of a market-based transmission interconnection," Energy Policy, Elsevier, vol. 37(8), pages 2889-2899, August.
    14. Chatzivasileiadis, Spyros & Ernst, Damien & Andersson, Göran, 2013. "The Global Grid," Renewable Energy, Elsevier, vol. 57(C), pages 372-383.
    15. Sandsmark, Maria, 2009. "A regional energy paradox--the case of Central Norway," Energy Policy, Elsevier, vol. 37(11), pages 4549-4556, November.
    16. Pringles, Rolando & Olsina, Fernando & Garcés, Francisco, 2015. "Real option valuation of power transmission investments by stochastic simulation," Energy Economics, Elsevier, vol. 47(C), pages 215-226.
    17. Garcia, Reinaldo C. & Contreras, Javier & Correia, Pedro F. & Muñoz, José I., 2010. "Transmission assets investment timing using net present value curves," Energy Policy, Elsevier, vol. 38(1), pages 598-605, January.
    18. Leuthold, Florian & Weigt, Hannes & von Hirschhausen, Christian, 2008. "ELMOD - A Model of the European Electricity Market," MPRA Paper 65660, University Library of Munich, Germany.
    19. Brunekreeft, Gert, 2004. "Market-based investment in electricity transmission networks: controllable flow," Utilities Policy, Elsevier, vol. 12(4), pages 269-281, December.

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