Cost recovery in congested electricity networks

G. Pepermans, Bert Willems

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Large scale investments in European electricity networks are foreseen in the next decade. Pricing the network at marginal cost will not be sufficient to pay for those investments as the network is a natural monopoly. This paper derives numerically the socially optimal transmission prices for cost recovery, taking into account that electricity networks are often congested, while allowing for market power in generation. The model is illustrated with a Stackelberg game for the Belgian electricity market.
Original languageEnglish
Pages (from-to)195-208
JournalZeitschrift für Energiewirtschaft
Volume34
Issue number3
Publication statusPublished - 2010

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Electricity
Recovery
Costs
Power markets

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title = "Cost recovery in congested electricity networks",
abstract = "Large scale investments in European electricity networks are foreseen in the next decade. Pricing the network at marginal cost will not be sufficient to pay for those investments as the network is a natural monopoly. This paper derives numerically the socially optimal transmission prices for cost recovery, taking into account that electricity networks are often congested, while allowing for market power in generation. The model is illustrated with a Stackelberg game for the Belgian electricity market.",
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Cost recovery in congested electricity networks. / Pepermans, G.; Willems, Bert.

In: Zeitschrift für Energiewirtschaft, Vol. 34, No. 3, 2010, p. 195-208.

Research output: Contribution to journalArticleScientificpeer-review

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AU - Pepermans, G.

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AB - Large scale investments in European electricity networks are foreseen in the next decade. Pricing the network at marginal cost will not be sufficient to pay for those investments as the network is a natural monopoly. This paper derives numerically the socially optimal transmission prices for cost recovery, taking into account that electricity networks are often congested, while allowing for market power in generation. The model is illustrated with a Stackelberg game for the Belgian electricity market.

M3 - Article

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JO - Zeitschrift für Energiewirtschaft

JF - Zeitschrift für Energiewirtschaft

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