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Potential gains of long-distance trade in electricity

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  • Javier L'opez Prol
  • Karl W. Steininger
  • Keith Williges
  • Wolf D. Grossmann
  • Iris Grossmann

Abstract

Electrification of all economic sectors and solar photovoltaics (PV) becoming the lowest-cost electricity generation technology in ever more regions give rise to new potential gains of trade. We develop a stylized analytical model to minimize unit energy cost in autarky, open it to different trade configurations, and evaluate it empirically. We identify large potential gains from interhemispheric and global electricity trade by combining complementary seasonal and diurnal cycles. The corresponding high willingness to pay for large-scale transmission suggests far-reaching political economy and regulatory implications.

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  • Javier L'opez Prol & Karl W. Steininger & Keith Williges & Wolf D. Grossmann & Iris Grossmann, 2022. "Potential gains of long-distance trade in electricity," Papers 2205.01436, arXiv.org.
    • Handle: RePEc:arx:papers:2205.01436
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    References listed on IDEAS

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    Cited by:

    1. López Prol, Javier & de Llano Paz, Fernando & Calvo-Silvosa, Anxo & Pfenninger, Stefan & Staffell, Iain, 2024. "Wind-solar technological, spatial and temporal complementarities in Europe: A portfolio approach," Energy, Elsevier, vol. 292(C).

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