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Social welfare impact from enhanced Trans-Asian electricity trade

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  • Purvins, Arturs
  • Gerbelova, Hana
  • Sereno, Luigi
  • Minnebo, Philip

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.

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  • Purvins, Arturs & Gerbelova, Hana & Sereno, Luigi & Minnebo, Philip, 2021. "Social welfare impact from enhanced Trans-Asian electricity trade," Energy, Elsevier, vol. 215(PA).
    • Handle: RePEc:eee:energy:v:215:y:2021:i:pa:s0360544220322131
    DOI: 10.1016/j.energy.2020.119106
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    2. Hana Gerbelová & Amanda Spisto & Sergio Giaccaria, 2020. "Regional Energy Transition: An Analytical Approach Applied to the Slovakian Coal Region," Energies, MDPI, vol. 14(1), pages 1-24, December.
    3. Ardelean, Mircea & Minnebo, Philip, 2023. "The suitability of seas and shores for building submarine power interconnections," Renewable and Sustainable Energy Reviews, Elsevier, vol. 176(C).
    4. Jha, Amit Prakash & Mahajan, Aarushi & Singh, Sanjay Kumar & Kumar, Piyush, 2022. "Renewable energy proliferation for sustainable development: Role of cross-border electricity trade," Renewable Energy, Elsevier, vol. 201(P1), pages 1189-1199.
    5. Ruan, Hebin & Gao, Hongjun & Qiu, Haifeng & Gooi, Hoay Beng & Liu, Junyong, 2023. "Distributed operation optimization of active distribution network with P2P electricity trading in blockchain environment," Applied Energy, Elsevier, vol. 331(C).
    6. Yue Pu & Yunting Li & Yingzi Wang, 2021. "Structure Characteristics and Influencing Factors of Cross-Border Electricity Trade: A Complex Network Perspective," Sustainability, MDPI, vol. 13(11), pages 1-25, May.

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