Energy | Electricity | Article
Impact of the regulatory framework for transmission investments on the cost of renewable energy in the EU
10 October 2014
Energy Economics, 2014, Vol. 43, pp. 185-194
Under the current regulatory frame in the EU, transmission planning is done at the national level to maximize national welfare, rather than European welfare. In this paper, we develop a competitive equilibrium model that calculates the impact of this imperfect regulatory framework on the cost of renewable energy. We apply the model to a power system with two interconnected zones, and find that the impact is case specific, but significant. We also find that the negative impact of national transmission planning on the cost of renewable energy is more significant in a state of the world in which Member States trade renewable energy, but that this negative effect is much smaller than the positive effect of renewable energy trade between Member States. We conclude that the imperfect regulatory framework for transmission investment is a significant cost for renewable energy in the EU, but that it should not stop Member States from trading renewable energy.
logo cadmus Read it on Cadmus Download in open access

LATEST FSR PUBLICATIONS

Other
The COVID-19 pandemic has almost forced the aviation industry to a halt in 2020, at least when it comes to the provision of passenger services: the number of active routes, [...]
Working Paper
We think that the electricity markets that were developed over the last two decades did what they were supposed to do during this crisis: through higher prices, they convey the [...]
Book
Experience with electricity markets across the world is more than 30 years long. The time has come to assess the results of the profound overhaul of the industry and explore [...]
Book
Experience with electricity markets across the world is more than 30 years long. The time has come to assess the results of the profound overhaul of the industry and explore [...]
Other
Auction revenues from emissions trading systems (ETSs) have rapidly grown in recent years and are becoming an increasingly important consideration for policymakers. ETS revenues can play a key role in [...]
Book
Capacity remuneration mechanisms (or simply capacity mechanisms) have become a fact of life in member states' energy markets and are one of the hottest topics in the wider European regulatory [...]

Join our community

To meet, discuss and learn in the channel that suits you best.

scroll

top