Removing cross-border capacity bottlenecks in the European natural gas market : a proposed merchant-regulatory mechanism
Anne Neumann, Juan Rosellón and Hannes Weigt
We propose a merchant-regulatory framework to promote investment in the European natural gas network infrastructure based on a price cap over two-part tariffs. As suggested by Vogelsang (2001) and Hogan et al. (2010), a profit maximizing network operator facing this regulatory constraint will intertemporally rebalance the variable and fixed part of its two-part tariff so as to expand the congested pipelines, and converge to the Ramsey-Boiteaux equilibrium. We confirm this with actual data from the European natural gas market by comparing the bi-level price-cap model with a base case, a no-regulation case, and a welfare benchmark case, and by performing sensitivity analyses. In all cases, the incentive model is the best decentralized regulatory alternative that efficiently develops the European pipeline system. -- Regulation ; transportation network ; investment
Year of publication: |
2011
|
---|---|
Authors: | Neumann, Anne ; Rosellón, Juan ; Weigt, Hannes |
Publisher: |
Berlin : DIW |
Subject: | Erdgasmarkt | Natural gas market | Gasversorgung | Gas supply | Regulierung | Regulation | Anreiz | Incentives | Europa | Europe |
Saved in:
freely available
Extent: | Online-Ressource (PDF-Datei: 20 S., 451 KB) graph. Darst. |
---|---|
Series: | Discussion papers / Deutsches Institut für Wirtschaftsforschung. - Berlin : [Verlag nicht ermittelbar], ISSN 1619-4535, ZDB-ID 2125067-4. - Vol. 1145 |
Type of publication: | Book / Working Paper |
Type of publication (narrower categories): | Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature |
Language: | English |
Notes: | Systemvoraussetzungen: Acrobat Reader |
Other identifiers: | hdl:10419/57259 [Handle] |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10009515072