Electricity transmission pricing and transmission grid expansion have received increasing regulatory and analytical attention in recent years. Since electricity transmission is a very special service with unusual characteristics, such as loop flows, the approaches have been largely tailor-made...

This paper provides a new mechanism on how to overcome transmission expansion in the specific European context. We test the Hogan-Rosellón-Vogelsang (2007) (HRV) incentive mechanism for different network topologies. The HRV mechanism is based on redefining the output of transmission in terms of...