Transmission constraints and strategic underinvestment in electric power generation

Léautier, Thomas-Olivier (2014) Transmission constraints and strategic underinvestment in electric power generation. TSE Working Paper, n. 13-459, Toulouse

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Official URL: http://tse-fr.eu/pub/27855

Abstract

This article is the first to examine electric power producers' investment decisions when com- petition is imperfect and the transmission grid congested. This analysis yields numerous original insights. First, congestion on the grid is transient, and may disappear when demand is highest. Second, transmission capacity increases have complex impacts on generation: they may increase, decrease, or have no impact on the marginal value of generation, and may have similar or opposite impacts on the marginal value of different technologies. Third, the true social value of transmission, including its impact on investment, may be significantly lower than is commonly assumed.

Item Type: Monograph (Working Paper)
Language: English
Date: 6 January 2014
Place of Publication: Toulouse
Uncontrolled Keywords: electric power markets, imperfect competition, investment, transmission constraints
JEL codes: D61 - Allocative Efficiency; Cost-Benefit Analysis
L11 - Production, Pricing, and Market Structure; Size Distribution of Firms
L94 - Electric Utilities
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse), TSM Research (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 09 Jul 2014 17:41
Last Modified: 20 Mar 2018 15:17
OAI ID: oai:tse-fr.eu:27855
URI: http://publications.ut-capitole.fr/id/eprint/15810

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