Working Paper No. 838

Optimal Transmission Regulation in an Integrated Energy Market

Published: June 1, 2010Pages: 38Keywords: Multi-national energy market; Transmission; Supranational regulation; System operation; Multi-contractingJEL-codes: D62; D82; L51; L94
Published version

Optimal Transmission Regulation in an Integrated Energy Market Thomas P. Tangerås


The capacity of the transmission network determines the extent of integration of a multinational energy market. Cross-border externalities render coordination of network maintenance and investments across countries valuable. Is it then optimal to collect powers in the hands of a single regulator? Should a common system operator manage the entire network? I show that optimal network structure depends on (i ) how the common regulator would balance the interests of the different member states; (ii ) how the gains from market integration vary across countries; (iii ) network characteristics (substitutability versus complementarity); and (iv ) the social cost of operator rent.
 

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Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

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