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Title:
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The regulation of electricity transmission networks and its impact on governance
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Author(s):
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Vries, L.J. de; Joode, J. de; Hakvoort, R.
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Published by:
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Publication date:
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ECN
Policy Studies
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1-10-2009
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ECN report number:
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Document type:
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ECN-W--10-018
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Article (scientific)
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Number of pages:
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25
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Published in: European Review of Energy Markets (), , 2009, Vol.3, p.13-37.
Abstract:
The current institutional and regulatory arrangements with respect to
electricity transmission vary significantly across the EU. The EU only
requires legal unbundling, which makes joint ownership of electricity
transmission and generation assets by holding companies possible. The
Energy Sector Enquiry of DG Competition (EC, 2007) concluded that the
vertically integrated structure that currently exists in many countries is an obstacle to competition both in the short run (through discriminatory access to networks) and in the long run (insufficient incentives for infrastructure investment). Therefore, in its third legislative energy package for internal energy markets, the European Commission (EC) proposed full ownership unbundling of electricity transmission and generation, or, if this option would prove practically (read: politically) infeasible, at least the creation of independent system operators (ISO). In the heated debate that followed, alternative institutional designs were proposed such as the creation of regional transmission operators (RTOs) or continuing vertical integration, but with stronger regulatory and institutional controls.
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