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Decentralised Cross-Border Interconnection

Author

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  • Claude Crampes

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Nils-Henrik M. von Der Fehr

    (UiO - University of Oslo)

Abstract

Reaping the full benefits from cross-border interconnection typically requires reinforcement of national networks. When the relevant parts of the networks are complements, a lack of coordination between national transmission system operators typically results in investment below optimal levels in both interconnectors and national infrastructure. A subsidy to financially sustain interconnector building is not sufficient to restore optimality; indeed, even when possible, such subsidisation may have to be restrained so as not to encourage cross-border capacities that will not be fully utilised due to lack of investment in national systems.

Suggested Citation

  • Claude Crampes & Nils-Henrik M. von Der Fehr, 2023. "Decentralised Cross-Border Interconnection," Post-Print hal-03942457, HAL.
    • Handle: RePEc:hal:journl:hal-03942457
    DOI: 10.5547/01956574.44.4.ccra
    Note: View the original document on HAL open archive server: https://hal.science/hal-03942457
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    References listed on IDEAS

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    More about this item

    Keywords

    Electrical grid; Interconnector; Externality; Regulation; Regional; Cooperation;
    All these keywords.

    JEL classification:

    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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