Reliability standards and generation adequacy assessments for interconnected electricity systems

Nicolas Astier and Marten Ovaere

Energy Policy, 2022, vol. 168, issue C

Abstract: This paper studies the consistency between two contradictory policies in the electricity industry. On the one hand, electricity systems are increasingly interconnected. On the other hand, reliability standards, whose value was typically set when countries were hardly interconnected, are still enforced at the national level. We show that enforcing autarky reliability standards may still reach the welfare optimum in the presence of interconnections, but only under two conditions. First, installed generation capacities should be determined jointly, while considering the whole power system. Second, reliability calculations should fully internalize external adequacy benefits occurring in neighboring systems. We run a numerical application for a set of European countries and find that existing interconnections may lead to generation adequacy benefits of around one billion euros per year, by enabling a 18.9 GW decrease in generation capacity. In our case study, regional coordination is found to be more important than fully internalizing external reliability benefits in adequacy simulations.

Keywords: Reliability standards; Generation adequacy; Security of supply; Electricity interconnection (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Working Paper: Reliability standards and generation adequacy assessments for interconnected electricity systems (2022)
Working Paper: Reliability standards and generation adequacy assessments for interconnected electricity systems (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:168:y:2022:i:c:s0301421522003561

DOI: 10.1016/j.enpol.2022.113131

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