What place for competition to develop the power transmission network?

Competition is an efficient alternative to regulation for the power transmission network only for peculiar investments in peculiar conditions. The competitive network investments are generally radial and/or create new commercial links in Direct Current between big markets with high and sustainable difference in zonal prices. In these conditions, the impact of the inefficiencies due to economies of scale, lumpiness and externalities of network investments is small enough for a quite efficient transmission market. To reach these conclusions about competition to develop the power transmission network, we will analyse the assumptions on which “pros” (Hogan (1992), Littlechild (2003, 2004)) and “cons” (Peréz-Arriaga et al. (1995), Joskow-Tirole (2005)) ground their theoretical analyses thanks to a survey of the network revenue and of the network cost structure. We also analyse the heterogeneity of the experiences of competitive power transmission network investment thanks to the same criteria, to confront eventually the theory and the practice of competition to develop the power transmission network.