So congestion revenues are essentially arbitrage?

Is that something that really requires that much more regulation? If there's one thing markets tend to be good at solving it's arbitrage.

▲

m101 12 hours ago | parent | next [-]

It does require regulation if you, as the state, find it inconvenient where the proceeds of the arbitrage end up.

	▲	yorwba 11 hours ago \| parent [-]
		Sweden has already successfully regulated so that the state-owned grid operator is collecting the profits. But other countries have privatized grids and don't particularly enjoy it when an operator forgoes grid expansion in favor of collecting on the price difference. I guess this will result in a compromise where grid operators are required to invest a minimum amount of their bottleneck revenues into grid expansion, while Sweden can take out the rest in a way that's less enticing for private operators. After all, that Sweden is negotiating at all indicates they would like new electricity market regulations in principle, just not this particular aspect of the current proposal.

▲

adolph 10 hours ago | parent | prev [-]

> So congestion revenues are essentially arbitrage?

There are significant capital costs to moving power. As I understand it, an example within the US is the relationship between the regional transmission operator (RTO) SPP and MISO, who have overlapping territory. In order for move power between certain areas of SPP, it travels over MISO lines. This eats into MISO capacity. As a result the two RTOs are working on a joint project.

https://www.spglobal.com/energy/en/news-research/latest-news...