Electricity transmission: an overview of the current debate

Gert Brunekreeft, Karsten Neuhoff and David M Newbery ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Electricity transmission has emerged as critical for successfully liberalising power markets. This paper surveys the issues currently under discussion and provides a framework for the remaining papers in this issue. We conclude that signalling the efficient location of generation investment might require even a competitive LMP system to be complemented with deep connection charges. Although a Europe-wide LMP system is desirable, it appears politically problematic, so an integrated system of market coupling, possibly evolving by voluntary participation, should have high priority. Merchant investors may be able to increase interconnector capacity, although this is not unproblematic and raises new regulatory issues. A key issue that needs further research is how to better incentivize TSOs, especially with respect to cross-border issues.

Keywords: Electricity; Transmission; Regulation; Prices; Merchant Investment (search for similar items in EconPapers)
JEL-codes: L4 L5 L94 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com
Date: 2004-11
Note: CMI, IO
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Journal Article: Electricity transmission: An overview of the current debate (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:cam:camdae:0463

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