Long Term Financial Transportation Rights: An Experiment

  • Bastian Henze
  • Charles N. Noussair
  • Bert Willems
Chapter
Part of the Lecture Notes in Energy book series (LNEN, volume 7)

Abstract

One challenge facing operators of network infrastructure, such as gas pipelines and electricity grids, is that large new investments in capacity must be undertaken as overall demand increases. In the European Union alone, roughly 200 Billion Euro must be invested in the energy transport networks (gas and electricity) by 2020 (MEMO/10/582). However, there is a considerable risk that an operator’s estimates of future demand might prove too optimistic, irreversible investments would be undertaken, and some of the capacity would sit idle or underused. On the other hand, failing to expand capacity sufficiently would result in lost profits and lower welfare than under optimal capacity provision.

Keywords

Europe Transportation Income Stake Monopoly 

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Copyright information

© Springer-Verlag London 2013

Authors and Affiliations

  • Bastian Henze
    • 1
  • Charles N. Noussair
    • 2
  • Bert Willems
    • 1
  1. 1.Tilec & CentER, Department of EconomicsTilburg UniversityTilburgThe Netherlands
  2. 2.CentER, Department of EconomicsTilburg UniversityTilburgThe Netherlands

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