Decentralised Cross-Border Interconnection

Claude Crampes and Nils-Henrik von der Fehr

No 22-1315, TSE Working Papers from Toulouse School of Economics (TSE)

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)
JEL-codes: H77 K23 L51 L94 (search for similar items in EconPapers)
Date: 2022-03
New Economics Papers: this item is included in nep-int, nep-law and nep-reg
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Related works:
Journal Article: Decentralised Cross-Border Interconnection (2023)
Working Paper: Decentralised Cross-Border Interconnection (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:126719

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