Various electricity systems around the world are currently facing a major challenge on the way to sustainable energy systems: the integration of large amounts of renewable energy sources (RES) into the electricity network. In particular, the European Union (EU) is currently undergoing a transformation of its energy system towards a sustainable and highly renewable-based system. Together with an improvement of energy efficiency, a promising strategy for decarbonizing the electricity sector is the large-scale expansion of RES electricity systems (such as wind, solar, hydro, geothermal, biomass). A range of different regulatory mechanisms have been proposed and applied so far in order to reach this goal. The proposed project is thus aimed to enhance the understanding on how to optimally regulate and expand transmission networks in the light of large-scale RES integration. The researcher will analyze how the unique variability and unpredictability characteristics of RES have an effect on transmission expansion decisions within an analytical framework, and will also derive policy implications to help decision makers identify appropriate policies. More specifically, this project will propose a combined merchant-regulatory incentive mechanism and compare it with traditional cost-plus regulation, a pure merchant approach and a welfare optimizing benchmark so as to promote the expansion of transmission grids under optimal dispatch of intermittent renewable energy sources (characterized by variable demand and supply dynamic functions). Moreover, these different approaches will be quantitatively simulated for different international systems, such as the European large-scale RES scenario of the Mediterranean Solar Ring (“Transgreen” or “Desertec”), the North-Sea Supergrid, as well as various regions in the American continent.