Optimal Transmission Regulation in an Integrated Energy Market
39 Pages Posted: 17 Sep 2010 Last revised: 7 Nov 2014
Date Written: June 1, 2010
Abstract
The capacity of the transmission network determines the extent of integration of a multi-national energy market. Cross-border externalities render coordination of network capacity 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.
Keywords: Multi-national energy market, transmission, supranational regulation, system operation, multi-contracting
JEL Classification: D62, D82, L51, L94
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Footloose Monopolies: Regulating a 'National Champion'
By Giacomo Calzolari and Carlo Scarpa
-
Regulating a Multi-Utility Firm
By Giacomo Calzolari and Carlo Scarpa
-
Regulating a Multi-Utility Firm
By Giacomo Calzolari and Carlo Scarpa
-
On Regulation and Competition: Pros and Cons of a Diversified Monopolist
By Carlo Scarpa and Giacomo Calzolari
-
Privatization Experiences in France
By Michel Berne and Gerard Pogorel
-
Scope Economies: Fixed Costs, Complementarity, and Functional Form
-
Economic Integration and Investment Incentives in Regulated Industries
By Emmanuelle Auriol and Sara Biancini