Optimal Transmission Regulation in an Integrated Energy Market

Thomas Tangerås ()

No 838, Working Paper Series from Research Institute of Industrial Economics

Abstract: 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.

Keywords: Multi-national Energy Market; Transmission; Supranational Regulation; System Operation; Multi-contracting (search for similar items in EconPapers)
JEL-codes: D62 D82 L51 L94 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2010-06-01
New Economics Papers: this item is included in nep-ene and nep-reg
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Related works:
Journal Article: Optimal transmission regulation of an integrated energy market (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0838

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