Development of regional electric power networks
London Economics
This report focuses essentially on the institutional and economic experiences accumulated within five regional networks. These are networks in the Nordic countries (NORDEL), Southern Africa (SADC), South East Asia, a regional interconnected system in India, and a tight US pool of the New England area (NEPOOL). The report examines the impact of institutional framework, pricing principles, monitoring of trade, agreement to and enforcement of technical standards, contract enforcement and power sector reform. Transport of electricity, sometimes through various borders, remains a major bottleneck. Three major conditions seem to be required to overcome this. First, transmission should only be a service with a specific tariff structure independent from energy prices. Second, electricity transmission should be regulated and international agreements should be discussed between different concerned countries so that part of the transmission regulatory regimes includes an international transit (i.e. wheeling) clause. Third, some sort of international coordination between the dispatching centers of the different transmission companies will have to be put into place to ensure the technical feasibility of such international transfers of electrical energy.
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