The implication of the European inter-TSO compensation mechanism for cross-border electricity transmission investments
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Publication type
Journal articlePublication Year
2015Journal
International Journal of Electrical Power & Energy SystemsPublication Volume
73Publication Issue
DecemberPublication Begin page
674Publication End page
683
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An efficient cross-border investment and well-designed markets and regulatory instruments are crucial prerequisites to the creation of a fully functional European internal electricity market. One of the prominent regulatory measures taken to speed up the creation of the internal market was to abolish tariff pancaking by replacing cross-border tariffs with an Inter-Transmission System Operators Compensation (ITC) mechanism through which transmission system operators (TSOs) can compensate each other. In this study, the implication of introducing such mechanism on the cross-border investment outcome is explored. The results indicate that the current ITC mechanism is loosely linked to the cross-border investment decisions of TSOs. In addition, the study concludes that factors such as the ITC fund size and the number of participating TSOs can influence the investment outcome.Knowledge Domain/Industry
Special Industries : EnergyEntrepreneurship
ae974a485f413a2113503eed53cd6c53
10.1016/j.ijepes.2015.05.041