Decentralised Cross-Border Interconnection

Claude Crampes and Nils-Henrik von der Fehr

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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.

Keywords: Electrical grid; Interconnector; Externality; Regulation; Regional; Cooperation (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ene, nep-int and nep-reg
Note: View the original document on HAL open archive server: https://hal.science/hal-03942457v1
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Published in Energy Journal, 2023, 44 (4), pp.147-169. ⟨10.5547/01956574.44.4.ccra⟩

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Journal Article: Decentralised Cross-Border Interconnection (2023)
Working Paper: Decentralised Cross-Border Interconnection (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03942457

DOI: 10.5547/01956574.44.4.ccra

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