Impact of the regulatory framework for transmission investments on the cost of renewable energy in the EU.
|Under the current regulatory frame in the EU, transmission planning is done at the national level to maximize national welfare, rather than European welfare. In this paper, we develop a competitive equilibrium model that calculates the impact of this imperfect regulatory framework on the cost of renewable energy. We apply the model to a power system with two interconnected zones, and find that the impact is case specific, but significant. We also find that the negative impact of national transmission planning on the cost of renewable energy is more significant in a state of the world in which Member States trade renewable energy, but that this negative effect is much smaller than the positive effect of renewable energy trade between Member States. We conclude that the imperfect regulatory framework for transmission investment is a significant cost for renewable energy in the EU, but that it should not stop Member States from trading renewable energy.
|Impact of the regulatory framework for transmission investments on the cost of renewable energy in the EU.
|Microeconomix, 5 rue du Quatre Septembre, 75002 Paris, France
|Florence School of Regulation, Robert Schuman Centre for Advanced Studies, European University Institute, Via Boccaccio 151, Florence, Italy
|Special Industries : Energy
|Vlerick strategic journal article