Recently, there is a perennial debate on the effects of renewable energy production and the adjacent rising uncertainty in the electricity supply on investment incentives in the generation as well as the transmission market. Moreover, the regulation of the transmission and distribution prices...

We analyze in a dynamic model how debt priority rules influence firms' initial capital structure choice, investment timing, and subsequent debt issues. We quantify deviations from first-best investment behavior that arise from different debt priority rules, and document surprisingly large...