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Common Carriage and the Pricing of Electricity Transmission

Chris Doyle and Maria Maher

Year: 1992
Volume: Volume 13
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol13-No3-4
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Abstract:
The electric supply industry in Europe is increasingly under pressure to become more competitive. Deregulation and privatisation in the United Kingdom demonstrate the feasibility of this. Draft directives have already been agreed upon by the European Commission to open access in energy markets. We examine the relationship between generators, transmission networks and consumers within a full information static, short-run framework. We show that open access is desirable if accompanied by common carriage and competition in generation. Common carriage is a necessary but not a sufficient condition for efficient outcomes to emerge. We also discuss the pricing of transmission services under conditions of open access and competition in generation.



Deregulation and Common Carriage in the Nordic Power System

Kjetil Bjorvatn and Sigve Tjotta

Year: 1993
Volume: Volume14
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol14-No4-4
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Abstract:
In this paper we analyze deregulation and integration of the Nordic markets for electric power. Nordic trade in electricity is controlled by national monopolies and is confined to occasional power. No transit is allowed. Due to its central location, Sweden plays a crucial role in the Nordic electricity market. For Sweden, common carriage without some form of compensation is not likely to be an acceptable form of integration. The Shapley values reveal that compensatory demands are likely to be quite large-a fact which might complicate negotiations on the introduction of common carriage. An alternative to common carriagewould be for Sweden to exert market power through monopolistic pricing of its transmission services. Government involvement may be necessary to secure a successful integration of international electricity markets.





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