National-strategic investment in European power transmission capacity

Daniel Huppmann and Jonas Egerer

European Journal of Operational Research, 2015, vol. 247, issue 1, 191-203

Abstract: The transformation of the European electricity system requires substantial investment in transmission capacity to facilitate cross-border trade and to efficiently integrate renewable energy sources. However, network planning in the EU is still mainly a national prerogative. In contrast to other studies aiming to identify the pan-European (continental) welfare-optimal transmission expansion, we investigate the impact of zonal planners deciding on network investment strategically, with the aim of maximizing the sum of consumer surplus, generator profits and congestion rents in their jurisdiction. This reflects the inadequacy of current mechanisms to compensate for welfare re-allocations across national boundaries arising from network upgrades.

Keywords: Electricity transmission; Network expansion; Generalized Nash equilibrium (GNE); Mixed-integer equilibrium problem under equilibrium constraints (MI-EPEC) (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (42)

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Working Paper: National-Strategic Investment in European Power Transmission Capacity (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:247:y:2015:i:1:p:191-203

DOI: 10.1016/j.ejor.2015.05.056

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