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Working Paper

Providing efficient network access to green power generators: A long-term property rights perspective

This paper analyses the dynamic efficiency of several types of access regulation of a bottleneck transmission line in electricity markets.

By: and Date: November 2, 2016 Topic: Energy & Climate

Coordinating the timing and location of new production facilities is one of the challenges of liberalized power sectors. It is complicated by the presence of transmission bottlenecks, oligopolistic competition, and the unknown prospects of low-carbon technologies.

The authors build a model encompassing a late and early investment stage, a clean (green) and dirty (brown) technologies, and a single transmission bottleneck and compare dynamic efficiency of several market designs.

Allocating network access on a short-term competitive basis distorts investment decisions as brown firms will pre-empt green competitors by investing early. Compensating early investors for future network congestion, as for instance in the E.U., only exacerbates this problem.

Dynamic efficiency is restored with long-term transmission rights that can be traded on a secondary market (iusvendendi). As early investment lowers the resale value of the transmission rights, brown firms will invest optimally.

The authors show that dynamic efficiency does not require the existence of physical rights for accessing the transmission line (ius utendi), but financial rights on receiving the scarcity revenues generated by the transmission line (ius fructendi) suffice.

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Podcast

Podcast

The European Green Deal rules

When it comes to global carbon emission is a tax the best form of defence? To make the European Green Deal work, the EU is considering a levy on carbon-intensive goods manufactured beyond its borders. But will a carbon border tax spawn a massive bureaucracy and lead to accusations of protectionism? To find out, Nicholas Barrett talked to Georg Zachmann and Ben McWilliams from Bruegel and Gabriel Felbermayr, President of the Kiel Institute for the World Economy.

By: The Sound of Economics Topic: Global Economics & Governance Date: March 9, 2020
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Policy Contribution

FDI another day: Russian reliance on European investment

Most foreign direct investment into Russia originates in the European Union: European investors own between 55 percent and 75 percent of Russian FDI stock. This points to a Russian dependence on European investment, making the EU paramount for Russian medium-term growth. Even if we consider ‘phantom’ FDI that transits through Europe, the EU remains the primary investor in Russia. Most phantom FDI into Russia is believed to originate from Russia itself and thus is by construction not foreign.

By: Marta Domínguez-Jiménez and Niclas Poitiers Topic: Global Economics & Governance Date: February 17, 2020
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Policy Contribution

The European Union-Russia-China energy triangle

Concern is growing in the European Union that a rapprochement between Russia and China could have negative implications for the EU.

By: Georg Zachmann Topic: Energy & Climate Date: December 9, 2019
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Past Event

Past Event

COP 21 RIPPLES: What are the key elements of an adequate global response?

The Dialogue focuses on technology, finance, industrial transformations and the political economy, which are identified by COP21 RIPPLES as key leverage points for triggering transformation.

Speakers: Michel Colombier, Marta Torres-Gunfaus, Henri Waisman and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: October 22, 2019
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Podcast

Podcast

Director's Cut: The Green New Deal

In this Director's Cut of 'The Sound of Economics', Guntram Wolff and Simone Tagliapietra discuss the division of tasks for the new EU commissioners, following Ursua Von der Leyen's announcement of roles on 10th September. They specifically zoom in on the role of the Green Deal, one of the flagship projects of this commission.

By: The Sound of Economics Topic: Energy & Climate Date: September 11, 2019
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External Publication

The impact of the global energy transition on MENA oil and gas producers

Endowed with half of the world's known oil and gas reserves, the Middle East and North Africa (MENA) region is cornerstone of the global energy architecture. This article argues that – together with the pressing need to create jobs opportunities for a large and youthful population – the possibility of the world moving more aggressively towards a low-carbon future should represent a key argument for the implementation of economic reform programmes.

By: Simone Tagliapietra Topic: Energy & Climate Date: August 5, 2019
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Podcast

Podcast

Deep Focus: Energy transition in the next EU institutional cycle

Bruegel fellow Simone Tagliapietra speaks to Sean Gibson in this instalment of 'The Sound of Economics', on the matter of the European energy transition and how the EU should proceed in the new institutional cycle.

By: The Sound of Economics Topic: Energy & Climate Date: July 10, 2019
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Opinion

Faut-il s’endetter pour le climat?

Jean Pisani-Ferry, soutient qu’il ne faut pas s’interdire de financer une partie du coût de la transition écologique par l’endettement.

By: Jean Pisani-Ferry Topic: Energy & Climate Date: July 2, 2019
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Past Event

Past Event

Brussels Policy Dialogue: Insights for EU and Member States’ Climate Agenda

The event is a policy dialogue organised under the project, 'COP21: Results and Implications for Pathways and Policies for Low Emissions European Societies'.

Speakers: Petya Icheva, David Morales, Artur Runge-Metzger, Oliver Sartor, Marta Torres-Gunfaus, Vincent Van Steenberghe and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 7, 2019
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Past Event

Past Event

How do national energy policies fit into EU decarbonisation plans?

Through considering several different national perspectives, we discuss how to reconcile the EU Climate Strategy targets with national energy and climate policies.

Speakers: Aleksandra Gawlikowska-Fyk, Christian von Hirschhausen, Carole Mathieu and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 15, 2019
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Working Paper

Estimating the cost of capital for wind energy investments in Turkey

Wind power represents a key component of Turkey’s national energy strategy. Based on data collected on 138 installations in the country, this paper provides an estimation of wind power’s cost of capital in Turkey. This analysis finds that the cost of capital for wind power in Turkey compares with the one of South-east European countries. On this basis, continued governmental commitment to current support schemes for wind power must be considered as crucial to further promote wind power deployment in the country, even if the recent devaluation of the Turkish lira raises the feed-in-tariffs cost for the government.

By: Gustav Fredriksson, Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Date: May 7, 2019
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Past Event

Past Event

A new climate strategy for the EU

At a pivotal point in time, three major EU sides come together to discuss the future climate strategy.

Speakers: Silke Karcher, Andrei Marcu, Raffaele Mauro Petriccione, Kathleen Van Brempt and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 19, 2019
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