IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v151y2021ics0301421521000392.html
   My bibliography  Save this article

The impact of interconnectors on the GB electricity sector and European carbon emissions

Author

Listed:
  • MacIver, Callum
  • Bukhsh, Waqquas
  • Bell, Keith R.W.

Abstract

A model of the European electricity system is used to analyse the impact of increasing interconnection levels between Great Britain and its European neighbours. Scenarios are assessed for 2020, 2025 and 2030. Several policy questions are highlighted around the assessment criteria for approving interconnector projects and the viability of existing investment and remuneration models. Results show that a GB specific carbon tax in 2020 contributes to a relatively high cost of energy and therefore high imports into GB. Increasing GB interconnection capacity in 2020 from 5 GW to 8.4 GW facilitates additional imports and brings down the annual cost of electricity for GB consumers by €639m. Analysis for 2025 and 2030 shows that additional interconnectors, the removal of the additional GB carbon tax and changes to the generation background lead to GB experiencing increased interconnector exports and reduced interconnector utilisation. This lessens or reverses the impact of new GB interconnection on GB consumer prices. It also leads to a significant reduction in revenue potential for future interconnectors. Carbon emission analysis indicates that inconsistencies in carbon pricing across different countries, like the extra GB price support, can lead to perverse outcomes with reduced GB emissions but increased total European emissions.

Suggested Citation

  • MacIver, Callum & Bukhsh, Waqquas & Bell, Keith R.W., 2021. "The impact of interconnectors on the GB electricity sector and European carbon emissions," Energy Policy, Elsevier, vol. 151(C).
    • Handle: RePEc:eee:enepol:v:151:y:2021:i:c:s0301421521000392
    DOI: 10.1016/j.enpol.2021.112170
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421521000392
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2021.112170?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cludius, Johanna & Hermann, Hauke & Matthes, Felix Chr. & Graichen, Verena, 2014. "The merit order effect of wind and photovoltaic electricity generation in Germany 2008–2016: Estimation and distributional implications," Energy Economics, Elsevier, vol. 44(C), pages 302-313.
    2. Newbery, David & Gissey, Giorgio Castagneto & Guo, Bowei & Dodds, Paul E., 2019. "The private and social value of British electrical interconnectors," Energy Policy, Elsevier, vol. 133(C).
    3. Turvey, Ralph, 2006. "Interconnector economics," Energy Policy, Elsevier, vol. 34(13), pages 1457-1472, September.
    4. Ward, K.R. & Green, R. & Staffell, I., 2019. "Getting prices right in structural electricity market models," Energy Policy, Elsevier, vol. 129(C), pages 1190-1206.
    5. Lion Hirth, 2018. "What caused the drop in European electricity prices? A factor decomposition analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    6. Deane, J.P. & Driscoll, Á. & Gallachóir, B.P Ó, 2015. "Quantifying the impacts of national renewable electricity ambitions using a North–West European electricity market model," Renewable Energy, Elsevier, vol. 80(C), pages 604-609.
    7. Geske, Joachim & Green, Richard & Staffell, Iain, 2020. "Elecxit: The cost of bilaterally uncoupling British-EU electricity trade," Energy Economics, Elsevier, vol. 85(C).
    8. Staffell, Iain & Pfenninger, Stefan, 2016. "Using bias-corrected reanalysis to simulate current and future wind power output," Energy, Elsevier, vol. 114(C), pages 1224-1239.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cui, Lixin & Dong, Ruxue & Mu, Yunguo & Shen, Zhiyang & Xu, Jiatong, 2022. "How policy preferences affect the carbon shadow price in the OECD," Applied Energy, Elsevier, vol. 311(C).
    2. Mezősi, András & Kácsor, Enikő & Diallo, Alfa, 2023. "Projects of common interest? Evaluation of European electricity interconnectors," Utilities Policy, Elsevier, vol. 84(C).
    3. Macedo, Daniela Pereira & Marques, António Cardoso & Damette, Olivier, 2022. "The role of electricity flows and renewable electricity production in the behaviour of electricity prices in Spain," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 885-900.
    4. Blyth, Will & Gross, Robert & Rickman, Jamie & MacIver, Callum & Bell, Keith, 2023. "Transition risk: Investment signals in a decarbonising electricity system," Applied Energy, Elsevier, vol. 352(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meus, Jelle & De Vits, Sarah & S'heeren, Nele & Delarue, Erik & Proost, Stef, 2021. "Renewable electricity support in perfect markets: Economic incentives under diverse subsidy instruments," Energy Economics, Elsevier, vol. 94(C).
    2. Newbery, David & Gissey, Giorgio Castagneto & Guo, Bowei & Dodds, Paul E., 2019. "The private and social value of British electrical interconnectors," Energy Policy, Elsevier, vol. 133(C).
    3. Mwampashi, Muthe Mathias & Nikitopoulos, Christina Sklibosios & Konstandatos, Otto & Rai, Alan, 2021. "Wind generation and the dynamics of electricity prices in Australia," Energy Economics, Elsevier, vol. 103(C).
    4. Samarth Kumar & David Schönheit & Matthew Schmidt & Dominik Möst, 2019. "Parsing the Effects of Wind and Solar Generation on the German Electricity Trade Surplus," Energies, MDPI, vol. 12(18), pages 1-17, September.
    5. Bell, William Paul & Wild, Phillip & Foster, John & Hewson, Michael, 2017. "Revitalising the wind power induced merit order effect to reduce wholesale and retail electricity prices in Australia," Energy Economics, Elsevier, vol. 67(C), pages 224-241.
    6. Chyong, Chi Kong & Newbery, David, 2022. "A unit commitment and economic dispatch model of the GB electricity market – Formulation and application to hydro pumped storage," Energy Policy, Elsevier, vol. 170(C).
    7. Gyanwali, Khem & Komiyama, Ryoichi & Fujii, Yasumasa, 2020. "Representing hydropower in the dynamic power sector model and assessing clean energy deployment in the power generation mix of Nepal," Energy, Elsevier, vol. 202(C).
    8. Percebois, Jacques & Pommeret, Stanislas, 2019. "Storage cost induced by a large substitution of nuclear by intermittent renewable energies: The French case," Energy Policy, Elsevier, vol. 135(C).
    9. Vijay, Avinash & Fouquet, Nicolas & Staffell, Iain & Hawkes, Adam, 2017. "The value of electricity and reserve services in low carbon electricity systems," Applied Energy, Elsevier, vol. 201(C), pages 111-123.
    10. Newbery, D., 2021. "Designing an incentive-compatible efficient Renewable Electricity Support Scheme," Cambridge Working Papers in Economics 2128, Faculty of Economics, University of Cambridge.
    11. Spodniak, Petr & Bertsch, Valentin, 2020. "Is flexible and dispatchable generation capacity rewarded in electricity futures markets? A multinational impact analysis," Energy, Elsevier, vol. 196(C).
    12. Mahler, Valentin & Girard, Robin & Kariniotakis, Georges, 2022. "Data-driven structural modeling of electricity price dynamics," Energy Economics, Elsevier, vol. 107(C).
    13. Nibedita, Barsha & Irfan, Mohd, 2022. "Analyzing the asymmetric impacts of renewables on wholesale electricity price: Empirical evidence from the Indian electricity market," Renewable Energy, Elsevier, vol. 194(C), pages 538-551.
    14. George E. Halkos & Apostolos S. Tsirivis, 2023. "Electricity Prices in the European Union Region: The Role of Renewable Energy Sources, Key Economic Factors and Market Liberalization," Energies, MDPI, vol. 16(6), pages 1-20, March.
    15. Eising, Manuel & Hobbie, Hannes & Möst, Dominik, 2020. "Future wind and solar power market values in Germany — Evidence of spatial and technological dependencies?," Energy Economics, Elsevier, vol. 86(C).
    16. Montoya, L.G. & Guo, B. & Newbery, D. & Dodds, P.E. & Lipman, G. & Castagneto Gissey, G., 2020. "Measuring inefficiency in international electricity trading," Energy Policy, Elsevier, vol. 143(C).
    17. Spodniak, Petr & Ollikka, Kimmo & Honkapuro, Samuli, 2019. "The Relevance of Wholesale Electricity Market Places: The Nordic Case," Working Papers 126, VATT Institute for Economic Research.
    18. Böttger, Diana & Härtel, Philipp, 2022. "On wholesale electricity prices and market values in a carbon-neutral energy system," Energy Economics, Elsevier, vol. 106(C).
    19. Zappa, William & Junginger, Martin & van den Broek, Machteld, 2021. "Can liberalised electricity markets support decarbonised portfolios in line with the Paris Agreement? A case study of Central Western Europe," Energy Policy, Elsevier, vol. 149(C).
    20. Spodniak, Petr & Ollikka, Kimmo & Honkapuro, Samuli, 2021. "The impact of wind power and electricity demand on the relevance of different short-term electricity markets: The Nordic case," Applied Energy, Elsevier, vol. 283(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:151:y:2021:i:c:s0301421521000392. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.