Providing efficient network access to green power generators:

Petropoulos, Georgios and Willems, Bert (2017) Providing efficient network access to green power generators:: A long-term property rights perspective. TSE Working Paper, n. 17-770, Toulouse

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Official URL: http://tse-fr.eu/pub/31526

Abstract

Coordinating the timing of new production facilities is one of the challenges of liberalized power sectors. It is complicated by the presence of transmission bottlenecks, oligopolistic competition and the unknown prospects of low-carbon technologies. We build a model encompassing a late and early investment stage, an existing dirty (brown) and a future clean (green) technology and a single transmission bottleneck, and compare dynamic efficiency of several market designs. Allocating network access on a short-term competitive basis distorts investment decisions, as brown firms will preempt green competitors by investing early. Dynamic efficiency is restored with long-term transmission rights that can be traded on a secondary market. We show that dynamic efficiency does not require the existence of physical rights for accessing the transmission line, but financial rights on receiving the scarcity revenues generated by the transmission line suffice.

Item Type: Monograph (Working Paper)
Sub-title: A long-term property rights perspective.
Language: English
Date: February 2017
Place of Publication: Toulouse
Uncontrolled Keywords: network access, congestion management, renewable energy sources, power markets
JEL codes: C72 - Noncooperative Games
D43 - Oligopoly and Other Forms of Market Imperfection
L13 - Oligopoly and Other Imperfect Markets
L94 - Electric Utilities
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 17 Mar 2017 15:21
Last Modified: 21 Mar 2018 14:33
OAI ID: oai:tse-fr.eu:31526
URI: http://publications.ut-capitole.fr/id/eprint/23193

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