The impact of national interests and European coordination on securing investment in trans-national electricity networks

Achieving the transition to a renewable energy supply in Europe requires further integration of national electricity systems. To support the large-scale integration of variable renewable energy sources, different regions in Europe will increasingly come to rely on each other to meet demand during different hours of the year. This requires an expansion of both cross-border and internal transmission grid capacity.For historical reasons, the European electricity system is institutionally fragmented and organized along national boundaries. National-strategic objectives have been argued to hamper cross-border network expansion in Europe. Transmission system operators, national regulatory authorities, and governments, may pursue their own interests as a result of which transmission corridors that are in the pan-European interest may not be realized.This thesis presents a quantitative, agent-based modeling approach to simulate network investment decisions by individual actors, which can be made subject to different investment identification and evaluation criteria. The model is used to determine the long-term differences in network development and the socio-economic welfare effects between the application of a national versus the application of a pan-European scope of investment identification and evaluation. On the basis of simulations performed under ten different scenarios, it concludes that although the application of a national cost-benefit perspective indeed leads to a reduction in transmission grid capacity in the long term, the reduction in socio-economic welfare remains limited, provided that only economic considerations play a role in network investment decisions