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The economic impacts of a submarine HVDC interconnection between Norway and Great Britain

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  • Doorman, Gerard L.
  • Frøystad, Dag Martin

Abstract

In the present paper we analyze the profitability of different HVDC interconnection alternatives between Norway and Great Britain for present and future scenarios. The analysis is done from a merchant and a social welfare perspective. The analyses include interconnections between Norway and Scotland and Southern Great Britain, respectively, as well as an alternative link to a future offshore wind farm. From a social welfare perspective the northern interconnection alternative is profitable under all sets of assumptions. The southern alternative is profitable under present conditions, but less than the northern alternative. The alternative link to the offshore wind park is not profitable, but this result is highly dependent on market conditions. From a merchant perspective none of the alternatives is profitable, clearly illustrating that leaving investments to commercial parties does not realize all projects that increase social welfare.

Suggested Citation

  • Doorman, Gerard L. & Frøystad, Dag Martin, 2013. "The economic impacts of a submarine HVDC interconnection between Norway and Great Britain," Energy Policy, Elsevier, vol. 60(C), pages 334-344.
  • Handle: RePEc:eee:enepol:v:60:y:2013:i:c:p:334-344
    DOI: 10.1016/j.enpol.2013.05.041
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    References listed on IDEAS

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    1. D. Finon & E. Romano, 2009. "Electricity market integration: Redistribution effect versus resource reallocation," Post-Print hal-00716343, HAL.
    2. Scorah, Hugh & Sopinka, Amy & van Kooten, G. Cornelis, 2012. "The economics of storage, transmission and drought: integrating variable wind power into spatially separated electricity grids," Energy Economics, Elsevier, vol. 34(2), pages 536-541.
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    5. Wolfgang, Ove & Haugstad, Arne & Mo, Birger & Gjelsvik, Anders & Wangensteen, Ivar & Doorman, Gerard, 2009. "Hydro reservoir handling in Norway before and after deregulation," Energy, Elsevier, vol. 34(10), pages 1642-1651.
    6. Denny, E. & Tuohy, A. & Meibom, P. & Keane, A. & Flynn, D. & Mullane, A. & O'Malley, M., 2010. "The impact of increased interconnection on electricity systems with large penetrations of wind generation: A case study of Ireland and Great Britain," Energy Policy, Elsevier, vol. 38(11), pages 6946-6954, November.
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    Citations

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    Cited by:

    1. Clemens Gerbaulet & Alexander Weber, 2014. "Is There Still a Case for Merchant Interconnectors?: Insights from an Analysis of Welfare and Distributional Aspects of Options for Network Expansion in the Baltic Sea Region," Discussion Papers of DIW Berlin 1404, DIW Berlin, German Institute for Economic Research.
    2. Egerer, Jonas & Kunz, Friedrich & Hirschhausen, Christian von, 2013. "Development scenarios for the North and Baltic Seas Grid – A welfare economic analysis," Utilities Policy, Elsevier, vol. 27(C), pages 123-134.
    3. Jan Horst Keppler, Sebastien Phan, and Yannick Le Pen, 2016. "The Impacts of Variable Renewable Production and Market Coupling on the Convergence of French and German Electricity Prices," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    4. repec:dau:papers:123456789/14119 is not listed on IDEAS
    5. Pineau, P.-O. & Dupuis, D.J. & Cenesizoglu, T., 2015. "Assessing the value of power interconnections under climate and natural gas price risks," Energy, Elsevier, vol. 82(C), pages 128-137.
    6. Jan Horst Keppler & Sébastien Phan & Yannick Le Pen & Charlotte Boureau, 2017. "The Impact of Intermittent Renewable Production and Market Coupling on the Convergence of French and German Electricity Prices," Working Papers hal-01599700, HAL.
    7. repec:eee:enepol:v:106:y:2017:i:c:p:85-102 is not listed on IDEAS
    8. repec:eee:ecanpo:v:58:y:2018:i:c:p:121-130 is not listed on IDEAS
    9. repec:eee:enepol:v:117:y:2018:i:c:p:228-246 is not listed on IDEAS
    10. Zakeri, Behnam & Virasjoki, Vilma & Syri, Sanna & Connolly, David & Mathiesen, Brian V. & Welsch, Manuel, 2016. "Impact of Germany's energy transition on the Nordic power market – A market-based multi-region energy system model," Energy, Elsevier, vol. 115(P3), pages 1640-1662.
    11. repec:eee:energy:v:162:y:2018:i:c:p:1193-1204 is not listed on IDEAS

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