Implementation of the Hogan, Rosellón, and Vogelsang (HRV) incentive mechanism into the InTraGas model

Bauer, Francisca and Bremberger, Christoph and Kunz, Friedrich (2011) Implementation of the Hogan, Rosellón, and Vogelsang (HRV) incentive mechanism into the InTraGas model. Working Papers / Research Institute for Regulatory Economics, 2011,2. Forschungsinstitut für Regulierungsökonomie, WU Vienna University of Economics and Business, Vienna.


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The European natural gas market is characterised by higher demand than available supply from own resources. Therefore Europe is a gas net-importing region. The costs of potential problems or disruptions establish the need for an environment which stimulates sufficient investments in transmission line capacities. We examine the effects of the introduction of the recently developed Hogan, Rosellón and Vogelsang (HRV) incentive mechanism into the European natural gas market. In the simulations with GAMS we can confirm all results expected from theory. The validity of these simulation results is confirmed in a structural analysis, which comprised the variation of different exogenous input parameters. Therefore we conclude that the HRV incentive mechanism as a regulatory regime for the European natural gas market would be an advisable alternative, which should be considered in future discussions. (author's abstract)

Item Type: Paper
Keywords: European gas market / regulation / HRV incentive mechanism / transmission expansion / EU / Erdgasmarkt / Regulierung / Erdgasversorgung / Stabilität / Anreizsystem
Classification Codes: RVK QR 534 ; JEL L51, L95, D43
Divisions: Forschungsinstitute > Regulierungsökonomie
Depositing User: Charlotte Lejeune
Date Deposited: 10 May 2011 10:31
Last Modified: 22 Oct 2019 00:41


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