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On the Role of International Benchmarking of Electricity Transmission System Operators facing significant investment requirements

Author

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  • Gert Brunekreeft
Abstract
Electricity networks currently face massive investment requirements. This paper argues that, given the investment requirements, (international) benchmarking is not an adequate tool for the regulation of transmission system operators (TSO). Errors in the outcomes of benchmarking will likely distort network investment and therefore the costs of doing it wrong are high. The paper discusses options to reduce the weight of benchmarking in TSO regulation and options that do not rely on benchmarking at all. Overall, facing massive investment requirements, it seems desirable to switch to a regulatory system with ex-ante investment approval and away from ex-post benchmarking.

Suggested Citation

  • Gert Brunekreeft, 2012. "On the Role of International Benchmarking of Electricity Transmission System Operators facing significant investment requirements," Bremen Energy Working Papers 0012, Bremen Energy Research.
    • Handle: RePEc:bei:00bewp:0012
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    References listed on IDEAS

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    1. Aoife Brophy Haney & Michael G. Pollitt, 2012. "International Benchmarking of Electricity Transmission by Regulators: Theory and Practice," Working Papers EPRG 1226, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    2. Jörg Borrmann & Gert Brunekreeft, 2010. "The Effect of Monopoly Regulation on the Timing of Investment," Bremen Energy Working Papers 0001, Bremen Energy Research.
    3. Gert Brunekreeft & Roland Meyer, 2011. "Regulation and Regulatory Risk in the Face of Large Transmission Investment," Bremen Energy Working Papers 0005, Bremen Energy Research.
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    Cited by:

    1. P Codani & Marc Petit & Yannick Perez, 2018. "Innovation et règles inefficaces : le cas des véhicules électriques," Post-Print halshs-01980639, HAL.
    2. Borrmann, Jörg & Brunekreeft, Gert, 2020. "The timing of monopoly investment under cost-based and price-based regulation," Utilities Policy, Elsevier, vol. 66(C).

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    More about this item

    Keywords

    electricity; network; regulation; benchmarking; uncertainty;
    All these keywords.

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • G00 - Financial Economics - - General - - - General
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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