Merchant Transmission Investment

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dc.contributor.authorJoskow, Paulen_GB
dc.contributor.authorTirole, Jeanen_GB
dc.date.accessioned2004-06-16T16:05:28Z
dc.date.available2004-06-16T16:05:28Z
dc.date.created2003-05en_GB
dc.date.issued2004-06-16T16:05:28Z
dc.description.abstractWe examine the performance attributes of a merchant transmission investment framework that relies on �market driven� transmission investment to provide the infrastructure to support competitive wholesale markets for electricity. Under a stringent set of assumptions, the merchant investment model appears to solve the natural monopoly problem and the associated need for regulating transmission companies traditionally associated with electric transmission networks. We expand the model to incorporate imperfection in wholesale electricity markets, lumpiness in transmission investment opportunities, stochastic attributes of transmission networks and associated property rights definition issues, the effects of the behaviour system operators and transmission owners on transmission capacity and reliability, co-ordination and bargaining considerations, forward contract, commitment and asset specificity issues. This significantly undermines the attractive properties of the merchant investment model. Relying primarily on a market driven investment framework to govern investment is likely to lead to inefficient investment decisions and undermine the performance of competitive markets.en_GB
dc.format.extent711602 bytes
dc.format.mimetypeapplication/pdfen_GB
dc.format.mimetypeapplication/pdf
dc.identifier.doi10.17863/CAM.4998
dc.identifier.urihttp://www.dspace.cam.ac.uk/handle/1810/356
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/356
dc.language.isoen_GB
dc.publisherFaculty of Economics
dc.relation.ispartofseriesCambridge Working Papers in Economics
dc.rightsAll Rights Reserveden
dc.rights.urihttps://www.rioxx.net/licenses/all-rights-reserved/en
dc.titleMerchant Transmission Investmenten_GB
dc.typeWorking Paperen
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