Potential gains of long-distance trade in electricity

Javier Lopez Prol, Karl W. Steininger, Keith Williges, Wolf D. Grossmann and Iris Grossmann

Energy Economics, 2023, vol. 124, issue C

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.

Keywords: Economic development; Electrification; Renewables; Gains of trade (search for similar items in EconPapers)
JEL-codes: F60 Q42 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:124:y:2023:i:c:s0140988323002372

DOI: 10.1016/j.eneco.2023.106739

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