Do TPA Exemptions Solve the Hold-Up Problem on European Gas Markets

Zeitschrift für Energiewirtschaft, Vol. 32, No.1, pp. 46-51, 2008

Posted: 26 Jul 2009  

Aldo Spanjer

Leiden Law School

Date Written: March 1, 2008

Abstract

Stimulating investments whilst introducing competition is a major policy issue in European gas markets. The current Article 22 exemptions regime, which is an application to the gas market of the access holiday theory, is designed to address this issue. Though useful, the access holiday theory provides an incomplete picture. In order to adequately analyze the exemptions regime, this paper incorporates the real options theory of investments into the analysis. Combining both theories provides the properties of an exemptions regime that better stimulates investments in gas. The current exemptions regime has some shortcomings, in particular regarding its risk criterion. A better exemptions regime would grant less exemptions, but if it does, allows higher profits during the exemption.

Keywords: European gas markets, investments, access holidays, real options

JEL Classification: L51, Q48

Suggested Citation

Spanjer, Aldo, Do TPA Exemptions Solve the Hold-Up Problem on European Gas Markets (March 1, 2008). Zeitschrift für Energiewirtschaft, Vol. 32, No.1, pp. 46-51, 2008. Available at SSRN: https://ssrn.com/abstract=1438625

Aldo Spanjer (Contact Author)

Leiden Law School ( email )

P.O. Box 9520
Leiden, NL-2300RA
Netherlands

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