Carregant...
Fitxers
Tipus de document
Document de treballData de publicació
Llicència de publicació
Si us plau utilitzeu sempre aquest identificador per citar o enllaçar aquest document: https://hdl.handle.net/2445/115367
Strategic investment in merchant transmission: the impact of capacity utilization rules
Títol de la revista
Director/Tutor
ISSN de la revista
Títol del volum
Recurs relacionat
Resum
In this paper we look at the relative merits of two capacity utilization regimes in the merchant electricity transmission network: Must offer (Mo) where the entire capacity installed is made available for transmission and Non Must Offer (NMo) where some capacity could be withheld. We look at two specific cases: (i) Demand for transmission varies across time, and (ii) Vertical integration is allowed between investors in transmission network and electricity generators. In the case of time-varying demand under Mo, we find that a monopolist may underinvest in transmission when compared to NMo, although NMo may lead to more capacity withholding. In the case of vertical integration, we find that when the market power is with the generators of the exporting node, without vertical integration no welfare-enhancing merchant investment would occur. Further, if the generators in the importing node have market power, which of the two regimes is welfare enhancing depends on the parameter values. In case vertical integration is better, then Mo is better than NMo. Finally, we also argue that the incentive to collude among various transmission network investors is mitigated with Mo in place.
Matèries (anglès)
Citació
Citació
BOFFA, Federico, PINGALI, Viswanath, SALA, Francesca. Strategic investment in merchant transmission: the impact of capacity utilization rules. _IEB Working Paper 2015/12_. [consulta: 23 de gener de 2026]. [Disponible a: https://hdl.handle.net/2445/115367]