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Reliability in Multi-regional Power Systems: Capacity Adequacy and the Role of Interconnectors

Based upon probabilistic reliability metrics, we develop an optimization model to determine the efficient amount and location of firm generation capacity to achieve reliability targets in multi-regional electricity systems. A particular focus lies on the representation and contribution of transmission capacities as well as variable renewable resources. Calibrating our model with a comprehensive dataset for Europe, we find that there are substantial benefits from regional cooperation. The amount of firm generation capacity to meet a perfectly reliably system could be reduced by 36.2 GW (i.e., 6.4%) compared to an isolated regional approach, which translates to savings of 14.5 bn EUR. Interconnectors contribute in both directions, with capacity values up to their technical maximum of close to 200%, while wind power contributions are in the range of 3.8-29.5%. Furthermore, we find that specific reliability targets heavily impact the efficient amount and distribution of reliable capacity as well as the contribution of individual technologies.Keywords: Reliability of supply, Capacity adequacy, Multi-regional power system, Interconnector, Variable renewable energy

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Energy Specializations: Energy Modeling – Sectoral Energy Demand & Technology; Electricity – Distributed Generation

JEL Codes: Q42: Alternative Energy Sources, G31: Capital Budgeting; Fixed Investment and Inventory Studies; Capacity, D24: Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity, Q54: Climate; Natural Disasters and Their Management; Global Warming, Q47: Energy Forecasting, C51: Model Construction and Estimation

Keywords: Reliability of supply, Capacity adequacy, Multi-regional power system, Interconnector, Variable renewable energy

DOI: 10.5547/01956574.39.5.shag

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Published in Volume 39, Number 5 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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