In this paper we try to assess the effects of a cross-border merger of electricity transmissionsystem operators (TSOs) with respect to international cooperation and coordination ofTSOs, in the context of the European electricity market. More in particular, we look at therecent merger of the Dutch TSO TenneT with the German TSO Transpower. First we look ateconomic theories surrounding ‘coordination’. Then we describe the merger of TenneT andTranspower and the relevant EU and national legal framework. Subsequently, we analyze theeffects of the merger on the performance of three technical functions for which coordination isimportant and for which most benefits of the merger are expected: flow management, themaintenance of the energy balance and the long-term development of the network. From thisanalysis we conclude that in the current context a cross-border TSO merger has limited directeffects on international cooperation concerning network operation, nor for European electricitymarket integration. It may, however, put more pressure on national regulators to cooperateacross the border and to further harmonize their market designs.
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