Highlights
Abstract
Keywords
1. Introduction
2. Policy context
3. Electricity system modelling assumptions
4. Scenarios
5. Modelling results
6. Cost-benefit estimations
7. Conclusion and policy implications
Credit author statement
Declaration of competing interest
References
Abstract
Long distance power transmission is commonly considered as an option for reducing carbon footprint in future electricity systems. Accordingly, this article presents economic insights in a transcontinental power interconnection linking four Asian countries with Europe. Enhanced electricity trade through the interconnected countries is assessed via techno-economic modelling. For this purpose two electricity system scenarios are developed for the year 2040: (i) a Reference Scenario, where electricity system development follows the plans of the involved system operators and (ii) a so-called Trans-Asia Scenario, where additional power transmission capacities are added to strengthen the electricity trading route crossing the interconnected countries: Turkey, Georgia, Azerbaijan and Kazakhstan. Economic benefits arising from the proposed Trans-Asia Scenario are estimated as a change in social welfare in the electricity system. Modelling results show a 140 M€ increase in annual social welfare for the Trans-Asia Scenario. The subsequent cost-benefit analysis results in a net present value in the range of −221 M€ to 534 M€, at a discount rate of 4%. This implies that over a life-cycle period of 40 years, the evaluated economic benefit may compensate investments between 1598 M€ and 3251 M€ needed for the additional power transmission capacities.
1. Introduction
Long distance power transmission is regularly presented as an enabler for high deployment of centralized renewable energy sources (RES) [1]. Several projects have been implemented providing flexibility in transcontinental power balance between electricity demand and generation [2]. Wu and Zhang [3] presented a feasibility study of an intercontinental electricity trade between Europe and China with 100% RES generation in 2050. This interconnection significantly decreases annual electricity system running costs. However, electricity systems of countries along the Europe-China connection route are not considered. In this regard, Assembayeva et al. [4] developed an electricity market model of Kazakhstan, with possible further expanding modelling capacity in the Central Asian region. Assembayeva et al. [4] indicates power flow congestions in the electricity grid of Kazakhstan during high electricity demand in winter. According to Gea-Bermúdez et al. [5]; grid congestions can be reduced along with electricity production costs through a sound long-term electricity system planning. In the light of the above considerations, this study presents an elaborated techno-economic modelling approach giving insights in investments in additional electricity trade capacity along a route connecting Europe with a selection of Asian countries in 2040.
Transmission grid reinforcements are proposed on top of the planned transmission infrastructure development plans to allow a cross-border electricity trade capacity of 2000 MW in a selected route from Turkey to Kazakhstan, passing through Georgia, Azerbaijan and the Caspian Sea. This route derives from a study by Ardelean and Minnebo [6] and interlinks with the European transmission grid as shown in Fig. 1. The proposed increase in cross-border trade capacity between the Asian countries to 2000 MW is close to the envisaged electricity trade capacity between Bulgaria-Turkey and Greece-Turkey in the ENTSO-E 2040 scenarios [7].