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Title:Merchant electricity transmission expansion: A European case study PDF Logo
Authors:Kristiansen, Tarjei
Rosellón, Juan
Issue Date:2010
Series/Report no.:Discussion papers // German Institute for Economic Research 1028
Abstract:We apply a merchant transmission model to the trilateral market coupling (TLC) arrangement among the Netherlands, Belgium and France as a generic example, and note that it can be applied to any general market splitting or coupling of Europe's different national power markets. In this merchant framework; the system operator allocates financial transmission rights (FTRs) to investors in transmission expansion based upon their preferences, and revenue adequacy. The independent system operator (ISO) preserves some proxy FTRs to deal with potential negative externalities due to an expansion project. This scheme proves to be capable in providing incentives for investment in transmission expansion projects within TLC areas.
Subjects:Transmission expansion
trilateral market coupling
Europe
financial transmission rights
congestion management
JEL:L51
L91
L94
Q40
Document Type:Working Paper
Appears in Collections:DIW-Diskussionspapiere
Publikationen von Forscherinnen und Forschern des DIW

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