IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v151y2021ics0301421521000392.html

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

    for a different version of it.

    References listed on IDEAS

    as
    1. 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).
    2. 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.
    3. 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.
    4. David Newbery, 2016. "A simple introduction to the economics of storage: shifting demand and supply over time and space," Working Papers EPRG 1626, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    5. Geske, Joachim & Green, Richard & Staffell, Iain, 2020. "Elecxit: The cost of bilaterally uncoupling British-EU electricity trade," Energy Economics, Elsevier, vol. 85(C).
    6. Turvey, Ralph, 2006. "Interconnector economics," Energy Policy, Elsevier, vol. 34(13), pages 1457-1472, September.
    7. 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.
    8. repec:aen:journl:ej39-1-hirth is not listed on IDEAS
    9. 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. Wang, Jingbo & Wen, Jianfeng & Long, Chao & Yang, Bo & Jiang, Lin, 2026. "Global electricity-carbon market nexus: A systematic review of synergistic efforts towards a net-zero power sector," Applied Energy, Elsevier, vol. 402(PB).
    2. Mezősi, András & Kácsor, Enikő & Diallo, Alfa, 2023. "Projects of common interest? Evaluation of European electricity interconnectors," Utilities Policy, Elsevier, vol. 84(C).
    3. Zanxin Wang & Yaqing Liu & Rui Wang & Yushang Hu, 2024. "Cost–Benefit Analysis of Cross-Regional Transmission of Renewable Electricity: A Chinese Case Study," Sustainability, MDPI, vol. 16(23), pages 1-21, December.
    4. Spilger, Maike & Schneider, Dennis & Weber, Christoph, 2025. "Uncertainty characterization for generation adequacy assessments – Including an application to the recent European energy crisis," Energy Economics, Elsevier, vol. 144(C).
    5. 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).
    6. Baayeh, Kenneth & Oyelakin, Idris Oyewale & Aubynn, Anthony & Azamelah, Emmanuel Yaovi & Enimil, Doris & Singh, Ajit Kumar, 2025. "Market Mechanisms and Electricity Export Pricing: A Comparative Study of Wholesale and Bilateral Trade Models," International Journal of Energy Economics and Policy, International Journal of Energy Economics and Policy, vol. 16(1), pages 1220-1226, December.
    7. 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.
    8. 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).
    9. Kallbekken, Steffen & Skjeflo, Sofie Waage & Westberg, Nina Bruvik, 2026. "Against the current: Interconnectors, public opposition and the energy trilemma," Energy Policy, Elsevier, vol. 210(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. 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).
    3. 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.
    4. 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.
    5. 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).
    6. 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).
    7. 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.
    8. 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).
    9. 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).
    10. Thomaßen, Georg & Redl, Christian & Bruckner, Thomas, 2022. "Will the energy-only market collapse? On market dynamics in low-carbon electricity systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 164(C).
    11. Williams, Olayinka & Green, Richard, 2022. "Electricity storage and market power," Energy Policy, Elsevier, vol. 164(C).
    12. Mendes, Carla & Staffell, Iain & Green, Richard, 2024. "EuroMod: Modelling European power markets with improved price granularity," Energy Economics, Elsevier, vol. 131(C).
    13. Purvins, Arturs & Gerbelova, Hana & Sereno, Luigi & Minnebo, Philip, 2021. "Social welfare impact from enhanced Trans-Asian electricity trade," Energy, Elsevier, vol. 215(PA).
    14. de Guibert, Paul & Shirizadeh, Behrang & Quirion, Philippe, 2020. "Variable time-step: A method for improving computational tractability for energy system models with long-term storage," Energy, Elsevier, vol. 213(C).
    15. Marko Hočevar & Lovrenc Novak & Primož Drešar & Gašper Rak, 2022. "The Status Quo and Future of Hydropower in Slovenia," Energies, MDPI, vol. 15(19), pages 1-13, September.
    16. Guo, Bowei & Newbery, David, 2021. "The cost of uncoupling GB interconnectors," Energy Policy, Elsevier, vol. 158(C).
    17. Lukas Kriechbaum & Philipp Gradl & Romeo Reichenhauser & Thomas Kienberger, 2020. "Modelling Grid Constraints in a Multi-Energy Municipal Energy System Using Cumulative Exergy Consumption Minimisation," Energies, MDPI, vol. 13(15), pages 1-23, July.
    18. Steinegger, Josef & Hammer, Andreas & Wallner, Stefan & Kienberger, Thomas, 2024. "Revolutionizing heat distribution: A method for harnessing industrial waste heat with supra-regional district heating networks," Applied Energy, Elsevier, vol. 372(C).
    19. Østergaard, P.A. & Lund, H. & Thellufsen, J.Z. & Sorknæs, P. & Mathiesen, B.V., 2022. "Review and validation of EnergyPLAN," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    20. Behrang Shirizadeh & Quentin Perrier & Philippe Quirion, 2022. "How Sensitive are Optimal Fully Renewable Power Systems to Technology Cost Uncertainty?," The Energy Journal, , vol. 43(1), pages 43-75, January.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    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.