Regulation of transmission expansion in Argentina Part I: State ownership, reform and the Fourth Line

Stephen Littlechild and Carlos J Skerk

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

Abstract: From 1992 to 2002, major expansions of the Argentine electricity transmission sector depended on users proposing, voting and paying for such expansions, which were then put out to competitive tender. Commentators hold this novel policy to have been unsuccessful, mainly on the ground that it substantially delayed investment in a much needed “Fourth Line” to Buenos Aire. This paper challenges this interpretation. The policy was chosen because the conventional regulatory framework could not be trusted to deliver more efficient transmission investment decisions. The delay to the Fourth Line was short. Most importantly, the Fourth Line was not economic. Hence the delay was beneficial both in deferring and in reducing costs. It indicated a need to reappraise transmission investment policy because the availability of gas had made it more economic to generate electricity near Buenos Aires than to transmit it a long distance.

Keywords: Argentina; electricity; transmission; regulation (search for similar items in EconPapers)
JEL-codes: L33 L51 L94 L98 (search for similar items in EconPapers)
Pages: 75
Date: 2004-11
New Economics Papers: this item is included in nep-com and nep-reg
Note: CMI, IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Working Paper: Regulation of transmission expansion in Argentina Part I: State ownership, reform and the Fourth Line (2004)
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