Toward a Combined Merchant-Regulatory Mechanism for Electricity Transmission Expansion

Toward a Combined Merchant-regulatory Mechanism for Electricity Transmission Expansion

Electricity transmission pricing and transmission grid expansion have received increasing regulatory and analytical attention in recent years. Since electricity transmission is a very special service with unusual characteristics, such as loop flows, the approaches have been largely tailor-made and not simply taken from the general economic literature or from the more specific but still general ...

A Transmission Expansion Planning Model for Maximizing Merchant Investment

a transmission expansion planning model for maximizing merchant investment

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A Proposed Merchant-Regulatory Mechanism

We propose a merchant-regulatory framework to promote investment in the European natural gas network infrastructure based on a price cap over two-part tariffs. As suggested by Vogelsang (2001) and Hogan et al. (2010), a profit maximizing network operator facing this regulatory constraint will intertemporally rebalance the variable and fixed part of its two-part tariff so as to expand the conges...

Regulatory Issues in Merchant Transmission Investment

Driven by fear of underinvestment in network assets, merchant investment in electricity transmission networks (MTI) is now legally allowed. Given that MTI is a real possibility, regulators face a new set of questions. After classifying different types of MTI, the paper raises and analyses regulatory questions, concentrating on the effect on competition, ownership questions, third-party-access r...