Market-based Investment in Electricity Transmission Networks: Controllable Flow

Gert Brunekreeft

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

Abstract: This paper discusses unregulated market-based electricity transmission investment by third parties as opposed to regulated investment by designated transmission system operators. The analysis is set against a European and Australian institutional background and focuses on interconnection of different systems. The paper explores four areas: economies of scale, market power, detrimental investment and risks. The analysis argues for restricting market-based investment to controllable flow (DC or FACTS) only. This is in line with what seems to take place in practice in Europe and Australia, it strikes a balance between pros and cons of market-based investment and draws a sharp line between regulated and unregulated investments.

Keywords: electricity; transmission; merchant; investment (search for similar items in EconPapers)
JEL-codes: L1 L43 L94 (search for similar items in EconPapers)
Pages: 23
Date: 2003-09
New Economics Papers: this item is included in nep-com
Note: CMI, IO
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:0340

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