Welfare and Competition Effects of Electricity Interconnection between Great Britain and Ireland

Laura Malaguzzi Valeri

No WP232, Papers from Economic and Social Research Institute (ESRI)

Abstract: This study analyzes the effects of additional interconnection on welfare and competition in the Irish electricity market. I simulate the wholesale electricity markets of Great Britain and the island of Ireland for 2005. I find that in order for the two markets to be integrated in 2005, additional interconnection would have to be large. However, the amount of interconnection decreases for high costs of carbon, since this causes the markets to become more similar. Irish consumers obtain most of the welfare gains of interconnection. As the amount of interconnection increases, there are also positive effects on competition in Ireland, the less competitive of the two markets. Finally, it is unlikely that private investors will pay for the construction of the interconnector since they are unable to extract all its welfare benefits.

Keywords: interconnection; electricity; Ireland (search for similar items in EconPapers)
JEL-codes: L94 Q40 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2008-03
New Economics Papers: this item is included in nep-com, nep-ene and nep-mic
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Citations: View citations in EconPapers (2)

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https://www.esri.ie/pubs/WP232.pdf First version, 2008 (application/pdf)

Related works:
Journal Article: Welfare and competition effects of electricity interconnection between Ireland and Great Britain (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:esr:wpaper:wp232

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