Title: Social welfare impact from enhanced Trans-Asian electricity trade
Citation: ENERGY vol. 215 p. 119106
Publication Year: 2021
JRC N°: JRC114387
ISSN: 0360-5442 (online)
URI: https://publications.jrc.ec.europa.eu/repository/handle/JRC114387
DOI: 10.1016/j.energy.2020.119106
Type: Articles in periodicals and books
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.
JRC Directorate:Energy, Transport and Climate

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