Arbeitspapier

Regulated expansion of electricity transmission networks: The effects of fluctuating demand and wind generation

We study the performance of different regulatory approaches for the expansion of electricity transmission networks in the light of realistic demand patterns and fluctuating wind power. In particular, we are interested in the relative performance of a combined merchant-regulatory mechanism compared to a cost-based and a merchant-like approach. In contrast to earlier research, we explicitly include both an hourly time resolution and fluctuating wind power, which allows representing demand in a very realistic way. This substantially increases the real-world applicability of results compared to previous analyses, which were based on simplifying assumptions. We show that a combined merchant-regulatory regulation, which draws on a cap over the two-part tariff of the Transco, leads to welfare outcomes far superior to the modeled alternatives. This result proves to be robust over a range of different cases and sensitivity analyses. We also find that the intertemporal rebalancing of the two-part tariff carried out by the Transco so as to expand the network is such that the fixed tariff part turns out to be relatively large compared to extension costs.

Sprache
Englisch

Erschienen in
Series: DIW Discussion Papers ; No. 1109

Klassifikation
Wirtschaft
Energy: General
Economics of Regulation
Market Structure, Pricing, and Design: Monopoly
Thema
electricity
regulation
transmission expansion
wind power

Ereignis
Geistige Schöpfung
(wer)
Schill, Wolf-Peter
Rosellón, Juan
Egerer, Jonas
Ereignis
Veröffentlichung
(wer)
Deutsches Institut für Wirtschaftsforschung (DIW)
(wo)
Berlin
(wann)
2011

Handle
Letzte Aktualisierung
10.03.2025, 11:41 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Schill, Wolf-Peter
  • Rosellón, Juan
  • Egerer, Jonas
  • Deutsches Institut für Wirtschaftsforschung (DIW)

Entstanden

  • 2011

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