Lessons for the Appraisal of Interconnection Investments from the NorNed-Case
Article from: OGEL 1 (2007), in Electricity Interconnectors
The Dutch energy market regulator (DTe) has granted the Dutch TSO (TenneT) permission to invest in and operate a high voltage DC interconnector with Norway. TenneT will do so in cooperation with the Norwegian TSO. The line is called NorNed. This paper critically discusses some points in the analysis, eyeing future cases. Although the economic underpinning of the decision is not correct on important points, the decision to invest in NorNed seems justified. The expected revenues from trade will, at least in the short term, be realised, and will not disappear completely after the ...