The diversity of design of TSOs

Vincent Rious, Jean-Michel Glachant (), Yannick Perez () and Philippe Dessante

Energy Policy, 2008, vol. 36, issue 9, 3323-3332

Abstract: It is puzzling today to explain diversity and imperfection of actual transmission monopoly designs in competitive electricity markets. We argue that transmission monopoly in competitive electricity markets has to be analyzed within a [Wilson, R, 2002. Architecture of the power markets. Econometrica 70(4), 1299-1344] modular framework. Applied to the management of electricity flows, at least three modules make the core of transmission design: (1) the short run management of network externalities; (2) the long run management of network investment; and (3) the coordination of neighboring transmission system operators (TSOs) for cross-border trade. In order to tackle this diversity of designs of TSOs, we show that for each of these modules, three different basic ways of managing them are possible. Among the identified 27 options of organization, we define an ideal TSO. Second, we demonstrate that (1) monopoly design differs from this ideal TSO and cannot handle these three modules irrespective of the "institutional" definition and allocation of property rights on transmission, while (2) definition and allocation of property rights on transmission cannot ignore the existing electrical industry and transmission network structure: they have to complement each other to be efficient. Some conclusions for regulatory issues of TSOs are derived from this analysis of network monopoly organization.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301-4215(08)00237-1
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The Diversity of Design of TSOs (2008)
Working Paper: The diversity of design of TSOs (2008)
Working Paper: The diversity of design of TSOs (2008)
Working Paper: The diversity of design of TSOs (2008)
Working Paper: The Diversity of Design of TSOs (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:36:y:2008:i:9:p:3323-3332

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().