Comparing Regulatory Designs for the Transmission of Offshore Wind Energy
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In: Economics of Energy and Environmental Policy, Vol. 10, No. 1, 2020, p. 229-249.
Research output: Journal contributions › Journal articles › Research › peer-review
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TY - JOUR
T1 - Comparing Regulatory Designs for the Transmission of Offshore Wind Energy
AU - Girard, Yann
AU - Kemfert, Claudia
AU - Stoll, Julius
PY - 2020
Y1 - 2020
N2 - Offshore wind plays an ever-increasing role for the global transition to renewable energy. For offshore wind energy to be successful, cost-effective transport of the produced electricity to shore is necessary. The development and operation of the offshore transmission asset is costly and regulated differently across the globe. In most countries, the TSO is responsible for the transmission and develops and operates the asset separately from the offshore wind farm. Other countries have established a competitive tender with integrated development of the offshore wind farm and the transmission asset. However, there is so far no empirical analysis of the economic benefits of different regulatory designs regarding the offshore transmission assets. In this paper, we collect a unique data set on offshore transmission assets that compares empirical cost and quality of offshore transmission assets in two countries with different regulatory regimes for the first time. With project level data we can control for geographical as well as technical difference to assess which regulatory design might lead to lower economic costs for the offshore transmission asset. Comparing the cost in the two leading countries for offshore wind energy, we find that a competitive regime leads to lower transmission cost and similar transmission availability.
AB - Offshore wind plays an ever-increasing role for the global transition to renewable energy. For offshore wind energy to be successful, cost-effective transport of the produced electricity to shore is necessary. The development and operation of the offshore transmission asset is costly and regulated differently across the globe. In most countries, the TSO is responsible for the transmission and develops and operates the asset separately from the offshore wind farm. Other countries have established a competitive tender with integrated development of the offshore wind farm and the transmission asset. However, there is so far no empirical analysis of the economic benefits of different regulatory designs regarding the offshore transmission assets. In this paper, we collect a unique data set on offshore transmission assets that compares empirical cost and quality of offshore transmission assets in two countries with different regulatory regimes for the first time. With project level data we can control for geographical as well as technical difference to assess which regulatory design might lead to lower economic costs for the offshore transmission asset. Comparing the cost in the two leading countries for offshore wind energy, we find that a competitive regime leads to lower transmission cost and similar transmission availability.
KW - Economics
KW - offshore wind
KW - transmission
KW - regulation
KW - Cost efficiency
UR - http://www.scopus.com/inward/record.url?scp=85098190601&partnerID=8YFLogxK
U2 - 10.5547/2160-5890.10.1.ygir
DO - 10.5547/2160-5890.10.1.ygir
M3 - Journal articles
VL - 10
SP - 229
EP - 249
JO - Economics of Energy and Environmental Policy
JF - Economics of Energy and Environmental Policy
SN - 2160-5882
IS - 1
ER -